Digital currency is taking over the world, especially during this global pandemic. The transference of cash can pose many health risks, and keeping track of money online has become the new norm for many people. Crypto startups in Singapore are leading the pack when it comes to the adoption of fintech platforms that use cryptocurrency and blockchain. The tech startups in Southeast Asia adopting the new wave of digital currency are driving the region ahead in the international crypto game.

There are currently 234 blockchain entities in Singapore with big companies, including Mastercard, Visa, Ant Financial, WeBank, and Libra, setting up shop in the region. Tech startups have begun making a name for themselves when it comes to the digital currency, and the Algorand Asia Accelerator announced funding of $15,000 USD each for ten new startups to get things moving in the Finance 3.0 sector. LongHash Ventures lead the accelerator program.

Governmental support

The Monetary Authority of Singapore (MAS) devised a new version of the Payment Services Act (PS Act) in January of 2020 to help consumers gain confidence in ePayments and offer more protection against issues that could arise within the digital money space. MAS aims to create a digital payments ecosystem that can continue to innovate while mitigating risks associated with the industry.

There are six different types of specific payment services that fall under the new legislation of the PS Act, namely, domestic money transfer, inward cross-border money transfer, merchant acquisition, e-money issuance, and digital payment tokens. The use of cryptocurrency falls under the digital payment token service category. The new act couldn’t have come at a better time, as due to the onset of the pandemic, MAS recommends the utilisation of digital and ePayments whenever possible to avoid the spread of the virus.

Licensing exemptions

MAS allowed cryptocurrency companies to operate without the proper licenses for up to six months if they were in operation before the PS Act came into effect towards the end of January 2020. The exemption period ended in July of 2020, and the Association of Cryptocurrency and Enterprises and Startups (ACCESs) launched a guidance program in August this year for those wishing to seek licenses following the exemption period.

It devised the regulations to keep Singapore at the top of the fintech pyramid and to drive the innovation and building of the digital economy in the region. Companies given the exemption and then licensed under the new regulations include Wirex, a borderless payment platform, and Binance, a crypto trading platform. The digital currency exchange platform Coinbase was also granted an exemption and continues to operate in Singapore despite the lack of information regarding their Singapore licensing.

A soaring sector

Out of the 200-plus blockchain entities in Singapore, some are standing out more than others. The crypto wallet platform Math Wallet recently announced that in a bid to support more than 50 public blockchains, it raised $7.8 million USD in a Series A+ round of financing. Other blockchain startups to watch in the region include KuCoin, Silot, and Clear. 

It was also recently announced that BlockShow, a blockchain event, will be hosted by MAS to drive the discussion on the technology and cryptocurrency startups in the fintech space. The five-day event will be held both off and online, giving those in attendance access to every conference 24 hours a day online. The hope is that the event will help to showcase the innovations of the industry in Singapore to the global fintech sector.

This is just the beginning

The demand for digital currency is growing at a steady pace for many reasons. It is easier for people to keep track of their money, invest in different forms of cryptocurrency, and due to the COVID-19 pandemic, digital currency is another way to maintain distance and shop online as much as possible. Even traditional financial institutions are paying more attention to blockchain technology as it will open up many new doors when it comes to how businesses can operate and what they can offer consumers.

With the new regulations and protocols in place and the assistance on licensing offered to these companies, the transition from an unlicensed idea into a cryptocurrency player has become more seamless than ever. The industry’s growth spurt began in 2017 with employment in the sector growing by 50%, but now, this surge has accelerated.

Crypto startups in Singapore have the perfect ecosystem for growth thanks in part to MAS and ACCESS. Tech startups in Southeast Asia are sitting in a climate that is driving growth with sensible regulations as opposed to limitations snuffing it out due to potential risks. Cryptocurrency isn’t likely to disappear in the coming years, especially in Singapore where the blockchain sector is booming.