- Coinbase received in-principle approval from MAS for digital payment token services
- Coinbase expansion plans include countries within the Asia-Pacific region
- Singapore’s strict regulations only handed out 17 in-principle approvals out of the 180 applied
Of late, regulators have been stepping up vigilance after high-profile blowups of crypto firms like Celsius and Three Arrows Capital. However, this did not deter cryptocurrency exchange Coinbase from receiving a digital-assets license in Singapore.
Coinbase, the largest crypto exchange in the United States, said that it has received approval from Singapore’s central bank to offer payment services in the city-state on Tuesday (11 October).
The in-principle approval, which the Monetary Authority of Singapore started giving out to crypto firms in 2021, means individuals and institutions can use digital payment token services and that the firms are regulated by the central bank under its Payment Services Act.
About 15 firms have received such permits since Singapore launched the licensing regime in 2019, including rival Crypto.com.
Expansion beyond United States
Hassan Ahmed, Coinbase’s regional director for Southeast Asia mentioned that Singapore will be a “beachhead” for Coinbase’s planned expansion in the Asia-Pacific region.
Countries like Indonesia and Vietnam are also very attractive for the firm’s expansion. Coinbase this month unveiled a revamp of its operations in Australia in an effort to bolster growth overseas.
“We see Singapore as a strategic market and a global hub for Web3 innovation,” Ahmed said in an interview. He also pointed to Australia and Japan as “very key markets within the broader APAC sort of region that we’re going to continue to double down on.”
Coinbase has also been building up its presence in Singapore and currently has nearly 100 employees in the little red dot. Product engineers form the largest bulk of hires in this city-state. The firm has been selective about hiring in recent months but is “starting to get a little bit of appetite back,” Ahmed said.
Coinbase CEO Brian Armstrong has been prioritising international growth after cutting almost a fifth of the company’s workforce. This came after news reporting missed estimates for second-quarter revenue and trading volume. Its shares are down 73% year to date, underperforming the MVIS Crypto Compare Digital Assets 100 Index’s 60% decline.
Strict regulations in Singapore
About 180 crypto companies applied for a crypto payments license to the Monetary Authority of Singapore in 2020 under a new regime.
Singapore has only handed out a mere 17 in-principle approvals and licenses thus far due to an elaborate due diligence process. Coinbase, Crypto.com and DBS Vickers are among those that have received licenses.
Singapore’s welcoming approach has helped the financial hub attract digital asset services-related firms from China, India and elsewhere in the last few years, making it a major centre in Asia.
Singapore has been emerging as a key crypto hub in Asia, with a regulatory regime that’s seen as more comprehensive than that of rival financial centre Hong Kong. But the pace of issuing licenses has been slow, with a string of industry upheavals causing the MAS to take a cautious approach to welcome new players.
Three Arrows Capital, a Singapore-based crypto hedge fund is in the process of being liquidated after aggressive bets on digital assets that blew up as token prices decimated. The hedge fund had taken a hit from the collapse of cryptocurrencies $LUNC and $USTC.
Hodlnaut, a crypto lender which holds a license in Singapore, was granted protection from creditors by the local High Court in August after the market rout prompted it to halt withdrawals. At around the same time, MAS said that it is considering restricting retail investors’ use of leverage and credit facilities to trade digital assets.
[Editor’s Note: This article does not represent financial advice. Please do your own research before investing.]
Featured Image Credit: Chain Debrief