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Singapore-Based DBS Bank To Expand Its Crypto Services

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DBS bank is looking to expand its cryptocurrency services. Despite the bear market in cryptocurrencies, Singapore’s largest bank says it still intends to boost its digital exchange and provide services to more of its 300,000 high-net-worth customers in Asia.

The decline of the cryptocurrency market, according to Piyush Gupta, chief executive of DBS since 2009, demonstrated the need for established, regulated financial institutions, not just start-ups, to provide products like digital asset trading for retail investors.

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Singapore-Based DBS Bank To Expand Its Crypto Services 2

DBS bank received a crypto license last year

The Monetary Authority of Singapore granted the bank’s brokerage division a cryptocurrency license last year, granting its wealthy and institutional clients invitation-only access to its DBS Digital Exchange.

Gupta claimed the bank has fewer than 1,000 members on the exchange but will soon make the service available to 300,000 of its affluent clients throughout Asia through its DBS mobile banking app.

According to him, the app would enable DBS to serve more clients while also streamlining and speeding up the process for customers. As of December 2021, DBS’s total assets were S$686 billion (US$488 billion).

The former Citibank executive, who has held senior banking positions throughout Asia, claimed that DBS was required to support Singapore’s push toward cutting-edge financial technology. In an interview with FT, he said, “People look to us to be a pioneer in the space and to continue to push boundaries.”

Gupta discussed the difficulties that face the nation’s regulators. On the one hand, we aim to become a major cryptocurrency hub. However, we’re also very concerned about our own citizens losing money due to this speculative asset class, he added.

According to Gupta, the losses incurred by small-scale investors in the crypto crash highlighted the significance of more reputable financial institutions providing services related to digital assets.

Between April and the end of June, the total number of trades on the bank’s Digital Exchange more than doubled, while the amount of bitcoin purchased on the exchange increased by almost four times. Ether, another well-liked token, has also grown in demand over the same time period by 65%.

Following the Fall of LUNA, Singapore Watchdog To Lay Down Stablecoin Regulation

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Following the fall of Terra, LUNA, and the entire Do Kwon ecosystem, countries are pushing regulations on crypto and stablecoins.

The main financial watchdog for a city-state, the Monetary Authority of Singapore (MAS), evaluates the benefits of a regulatory framework for stablecoins.

The KYC concerns that are the focus of current regulations do not take into account the unique dangers that stablecoins are subject to.

Regulatory head of Singapore illustrated the high risks that followed LUNA’s fall

On Monday, the MAS official homepage posted a written statement from Tharman Shanmugaratnam, the regulator’s chief, in response to a query from a Singaporean lawmaker.

The inquiry asked whether there was information on how exposed Singaporeans were to the recent decline in the value of the TerraUSD Classic (USTC) stablecoin and the Luna Classic (LUNC) token and if the MAS was actively thinking about ways to address future crises of this nature.

Shanmugaratnam recognized that the Terra collapse serves as an example of the severe dangers associated with investing in cryptocurrencies, but he emphasized that the unrest has not adversely impacted the economy or the mainline financial system.

The majority of the official response described MAS’s existing plans for stablecoins.

The current framework, in which stablecoins, along with other cryptocurrencies, are being deemed digital payment tokens (DPTs), doesn’t address the unique hazards, according to him, thus MAS is actively examining its approach to the regulation of stablecoins.

As a result, MAS “is evaluating the advantages of a regulatory system” particular to the features of stablecoins.

It will concentrate on issues including controlling reserve requirements and peg stability. As stated in the answer, MAS plans to consult the public in the following months regarding the guidelines.

The ties between LUNA’s TerraForm Labs, Three Arrows Capital (a cryptocurrency hedge fund currently facing bankruptcy procedures), and Singaporean crypto regulation were officially denied on July 19 by Ravi Menon, the managing director of MAS.

Menon also stressed the need for the regulatory attention to be shifted away from KYC/AML and onto the more complex threats presented by cryptocurrencies in his address.

Ripple Partners With FOMO Pay To Bolster XRP-Powered ODL In Singapore

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Ripple has forged a collaboration with Singapore-based major payments institution FOMO Pay, to boost cross-border treasury flows using XRP powered On-Demand Liquidity [ODL] initiative and achieve affordable and instant settlement in EUR and USD globally.

The partnership will enable FOMO Pay to get 24/7 access to liquidity for EUR and USD, and makes it easy for the payment service provider to ramp up internal business cash flows, thus allowing them to reduce business costs and improve operations.

Liquidity on demand, or ODL, is essentially the process of buying and selling XRP cryptocurrency in originating and destination countries to create a liquid supply of liquidity.

RippleNet’s On-Demand Liquidity [ODL] service, leverages XRP as the digital asset to link two currencies, and facilitate cross-border payments at a low cost.

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Ripple Partners With FOMO Pay To Bolster XRP-Powered ODL In Singapore 4

The blockchain firm also claimed that XRP-driven ODL eliminates the need for costly pre-funded destination accounts.

Besides Ripple Labs’ products for payment settlement, asset exchange, and remittance systems, it also provides services for international money transfers and security transfers through a network of banks and financial institutions.

Ripple’s ODL Is Touted To Solve Payment Bottlenecks

Speaking on the new launch, Brooks Entwistle, SVP and Managing Director at Ripple stated,

With the Asia Pacific region teeming with opportunities to solve existing silos and inefficiencies with payments, we’re seeing many forward-looking financial institutions clamoring for the next evolution of payment infrastructures – and notably based on crypto and blockchain technologies. This is why we are so excited to launch this crypto-enabled treasury management use case for ODL with innovative customers like FOMO Pay.

With the latest addition, FOMO Pay has joined other PSPs like Azimo, Novatti, FlashFX, iRemit, Tranglo, SBI Remit, and Pyyplin in integrating ODL services for their business and customers. The string of partnerships does not end here.

Just a day back, Ripple joined hands with the largest financial institution in the Middle East and Africa-Qatar National Bank [QNB] along with China Bank to deploy remittance services, TronWeekly reported.

Through RippleNet, the service will let users immediately transmit payments up to PHP 50,000 to any bank in the Philippines. It primarily serves Filipinos living in Qatar.

Singapore’s Financial Authority To Bring In Tighter Crypto Restrictions

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According to a senior minister in the government, the Monetary Authority of Singapore, or MAS, has been “seriously reviewing” additional rules that would influence how ordinary investors deal with cryptocurrency.

Tharman Shanmugaratnam, a senior minister in Singapore and the head of the MAS, reportedly stated that the financial watchdog may explore “putting limitations on retail involvement” for cryptocurrency investors as well as implementing regulations on the use of leverage for cryptocurrency transactions.

In addition, Shanmugaratnam urged financial authorities worldwide to clarify their regulations “given the international character of cryptocurrency markets.”

Monetary Authority of Singapore banned crypto ads in public spaces

The MAS banned cryptocurrency service providers from marketing or advertising in public places in January, and it was behind laws to shut down crypto ATMs.

These actions appear to demonstrate “cryptocurrency trading being depicted in a manner that trivializes its hazards.”

The Payment Services Act of the nation, according to the MAS, gives the regulator the authority to place further limitations on cryptocurrency service providers “to provide greater consumer protection, to preserve financial stability, and to defend the efficacy of monetary policy.”

The financial watchdog said that “recent events” have exposed the hazards of investing in cryptocurrencies, most likely alluding to the extraordinary volatility in the pricing of popular cryptocurrencies like Bitcoin (BTC).

For allegedly “providing misleading info and exceeding assets under management criterion,” the MAS censured Three Arrows Capital on June 30.

The MAS is still debating whether to approve businesses handling digital assets in Singapore, notwithstanding the market collapse. The financial watchdog gave Crypto.com in-principle permission in June, allowing the cryptocurrency exchange to offer specific payment services in the nation.

While Binance announced plans to end operations in Singapore in February, other cryptocurrency firms including Bitstamp Limited, Coinbase Singapore, and Gemini Trust have been given exemptions for holding a license in Singapore.

Singapore Regulator Says It Will Not Tolerate Bad Crypto Behaviour

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According to the Monetary Authority of Singapore’s (MAS) top fintech officer, Sopnendu Mohanty, the sector would not accept bad behavior in the crypto ecosystem.

Mohanty’s remarks come amid turmoil in the cryptocurrency market brought on by the failure of two tokens from Singapore-based Terraform Labs, namely terraUSD (UST) and terra (luna), which destroyed $40 billion in investor capital.

“We have no tolerance for any market bad behavior.” “If somebody has done a bad thing, we are brutal and unrelentingly hard.”

Mohanty told The FT in an interview

Another Singapore-based cryptocurrency company, hedge fund Three Arrows Capital, has had difficulties as a result of Terra’s collapse. The fund’s investment in luna experienced huge losses, and the ensuing market crisis required forced liquidations.

Several lenders, notably BlockFi and Voyager, are having financial issues as a result of Three Arrows Capital’s inability to service its loans. Recently, both acquired credit lines from Alameda Research.

Singapore’s regulator won’t grant licenses easily, says Mohanty

He continued by saying that the MAS would be cautious to provide licenses to cryptocurrency companies. In order to license cryptocurrency enterprises, the government has implemented a “painfully long” and “very rigorous due diligence process,” according to him.

So far, the MAS has only approved 14 companies to offer crypto services. The regulator handed Crypto.com, Genesis, and the cryptocurrency trading platform Sparrow in-principle clearance earlier this week.

Overall, Singapore’s opinion of the cryptocurrency industry has changed significantly. Prior to recently, the nation actively courted the industry, but as a result of its stricter stance, crypto companies have relocated to other nations, notably Dubai.

Crypto.com Receives In-principal Approval From MAS for Its Crypto License

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Crypto.com received approval from the Monetary Authority of Singapore to function and provide its services. Three further in-principle approvals have been given by Singapore for its highly sought-after digital payment token (DPT) license, which enables businesses to provide digital assets services.

The Monetary Authority of Singapore (MAS) did not identify the applicants, but the well-known cryptocurrency exchange Crypto.com later revealed that it was one of the recipients in a press release. The license will allow the exchange to establish its services in Singapore.

Deputy Prime Minister Heng Swee Keat made the announcement on Wednesday (Jun 22) in a speech in which he reaffirmed Singapore’s intention to collaborate with blockchain and digital asset players.

The news comes amidst Crypto.com laying off 5% of employees

As of the end of May, MAS had received 196 applications. There are now 108 applications being reviewed; 3 have been declined, and 74 have been withdrawn. Coinhako, DBS Vickers, a trading firm, and Triple-A, a supplier of cryptocurrency payments, are among the licensees.

Heng said that by supporting the benefits of Web3 while minimizing its drawbacks, authorities and the fintech sector would work together to build the ecosystem responsibly.

“We are committed to partner innovative and responsible players to grow the Web 3.0 ecosystem and community in Singapore.”

Heng Swee Keat

Heng’s remarks follow a digital asset market collapse that has caused some firms to go into financial trouble. Policymakers throughout the world have indicated an interest in making their nations into crypto hubs as interest in Web3 technology is at an all-time high.

The role of Singapore as a global hub for Web3 has come under scrutiny in recent months as complaints about how simple it is to get a license have grown. Some people in the sector have suggested Dubai as a more cryptocurrency-friendly option because of its aspirations to become a Web3 hub.

This Singaporean Exchange Accepts Crypto To Attract High-Net-Worth Clients

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Singapore-based trading platform ADDX has become the first financial firm in the city-state to accept cryptocurrencies as proof of accredited investor status or in other words high-net-worth clients. The recognized assets are Bitcoin [BTC], Ethereum [ETH], and Tether [USDC].

ADDX in a statement on Wednesday stated that it would recognize only those cryptocurrencies that have a higher market cap and would apply discount rates when valuing these assets.

Doubling down on the digital assets market, ADDX CEO Oi-Yee Choo said,

“Cryptocurrencies are here to stay. They no longer exist only on the fringes of wealth and investment conversations”.

“With a large minority of investors owning crypto, it is reasonable for these digital assets to be recognized as a part of one’s portfolio – not unlike any other assets that can be valued in the marketplace, such as real estate or equity,” Choo added.

Under Singapore’s law, individuals need to have at least $217,991 of income from the past 12 months, $1 million in net financial assets, or $2 million in net personal assets to qualify as accredited investors.

ADDX also divulged that it will accept crypto assets only in the category of net personal assets and will apply a 50% discount rate for bitcoin or ether when calculating the value of these holdings and a 10% discount for USDC stable coin.

On the contrary, Singapore’s Deputy Prime Minister Heng Swee Keat has advised retail Investors to stay clear of cryptocurrencies citing that they are “highly risky.” He stressed, “We cannot express this enough.”

Singapore’s Deputy PM Urged Investors To Refrain From Crypto Trading

Speaking along the sidelines of the recently held Asia Tech x Singapore [ATxSG] summit, the minister took a critical note of the fallout of cryptocurrency terra [LUNA] and algorithmic stablecoin terrausd [UST], where many investors reportedly lost millions and used it as an example to support his point.

Singapore has maintained a cautious approach toward crypto, with the country’s central bank, the Monetary Authority of Singapore [MAS], as the main regulator of the crypto sector. 

For the last two years, the MAS has only granted licenses and in-principle approvals to 11 digital payment token service providers. As per reports nearly 100 entities have failed to meet regulator requirements.

Crypto Is Now Accepted at a Singapore Luxury Car Company

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EuroSports Global, a Singaporean luxury automobile dealer, has begun taking crypto payments for Lamborghini and Alfa Romeo vehicles.

EuroSports has collaborated with Fomo Pay, a digital payments startup, to take payments in BTC, ETH, USDT, and USDC for its cars. The startup sees a need to meet “the rising need for flexible and easy-to-use crypto payments” while also lowering transaction fees and simplifying international transactions utilizing crypto.

According to Fomo Pay CEO Louis Liu, the MAS granted the company a digital token payment license in September 2021. 2Tone Antique, a merchant, specializing in vintage high-end timepieces, and Luxehouze, a renowned marketplace for luxury commodities in Asia, use the firm’s intermediary services.

2Tone Vintage intends to attract new customers using Fomo Pay, while Luxehouze wants to prevent currency swings.

Despite the Monetary Authority of Singapore’s warnings that bitcoin trading is dangerous, several establishments in the region are already taking cryptocurrencies as payment.

“Singapore is one of Luno’s main markets, given its position as a worldwide financial center with a progressive business climate,” Sherry Goh, country manager for Singapore at London-based crypto exchange Luno, said.

“Between March 2021 and February 2022, our client base increased by more than 40% year over year,” he added.

Porsche Towson now accepts crypto

Porsche now accepts digital assets payments in the form of Bitcoin, Ethereum, Shiba Inu, and other cryptocurrencies.

On Twitter, Bitpay announced cooperation with Porsche Towson. Users may pay for a Porsche automobile using digital assets, thanks to Bitpay’s integration.

Porsche Towson is a Porsche dealership located in Twoson, Maryland. The store sells both new and used Porsche vehicles. BitPay was founded in 2011 with the goal of making bitcoin payments easier for companies. BitPay now has over 10,000 businesses that utilize it to make bitcoin transactions easier.

Companies like BitPay, which allow retailers and even real estate brokers to accept payments in numerous digital assets, are poised to pull business away from traditional banks.

According to Deloitte, firms may handle crypto payments without keeping bitcoin on their balance sheet by using an intermediary that converts back and forth between cryptocurrencies and fiat.

This helps to attract new clients in the near term, with the third party considering most of the risk and regulatory requirements.

Overseas Crypto Firms Require Singapore’s Stamp Of Approval

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Singapore’s ambition to be the global hub of crypto received a major boost when the nation’s parliament gave its consent to a law that aimed to bring foreign digital asset firms operating in the city-state under its ambit. According to sources, the new legislation will require overseas virtual asset service providers [VASPs] in the region to be licensed.

At present, such firms fall outside the purview of anti-money laundering and terror financing. The new law passed in the legislature on Tuesday is part of a broader effort to combat money laundering and other criminal activities. However, the move sends mixed signals.

This is because it comes at a time when Singapore’s financial regulator has recently prohibited firms in the cryptocurrency space from advertising their services to the public, which points to its cautious approach.

Apart from that, Singapore’s leading bank DBS Bank has made a complete reversal of its plan to extend crypto trading services to retail customers, a few days back. Many believed the decision was taken under regulatory pressure.

The rumors turned true when in an interview, Chief Executive Officer, Piyush Gupta said the local watchdogs were“rightfully concerned” about allowing digital asset services in the retail sector. Besides that, Singapore’s strict regulatory standards became a source of disillusionment for many in the industry.

Is Singapore’s crypto framework a “tall regulatory wall”?

Patrick Chiu, the founder of Hong Kong’s AP Capital, a fund with an expanding digital asset portfolio license said that the city-state has terms and stipulations that “aren’t typical for global exchanges.” “Everyone was welcome to apply”, said Chiu. “But there’s a tall regulatory wall”.

Even Binance who is the biggest player reportedly felt let down by the moves, as it had withdrawn its application for setting up its local affiliate.

Earlier this year, Singaporean regulators banned direct-to-consumer marketing for exchanges and directed crypto ATM operators to turn off their machines. It also placed DeFiance Capital, one of the larger crypto funds in the city-state, on an investor alert list because it was “wrongly perceived as being licensed or regulated by the Monetary Authority of Singapore.”

That said, the city-state has fared relatively well among its regional peers in welcoming the technologies of cryptocurrency and has launched a framework for legalizing the industry. In contrast to that, other Asian nations such as China have opted for a blanket ban.

Singapore Finance Minister Reveals That NFT Gains Are Taxable

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Income from NFT trading, according to Singapore’s Finance Minister Lawrence Wong, will be subject to existing income tax restrictions.

According to the Business Times, the minister revealed the information during a Friday statement in parliament.

According to the finance minister, the tax laws will apply to persons who make income from NFT transactions, not to those who generate capital gains from NFT trading. Singapore, in particular, does not have a capital gains tax framework; hence capital gains will not be taxed.

Individuals who participate in NFT trading as full-time employment, on the other hand, will be taxed as if they were earning money.

The Singapore Inland Revenue Authority would consider various factors to assess whether or not an individual is profiting from NFT transactions, including the asset’s type, holding time, purchase purpose, transaction volume, and grounds for sell-off.

Reasonable tax important for crypto investors

Cryptocurrency regulation is becoming increasingly important to regulators. Cryptocurrency and NFT transactions are already subject to taxes in the United States and Australia.

Traders in Australia, for example, are obligated to pay taxes on profits from lucrative NFT trades. When an asset is sold, the government imposes a capital gains tax.

Meanwhile, the Internal Revenue Service in the United States considers digital assets to be property for taxes purposes. When converting a cryptocurrency to money, you must account for any capital gains or losses.

Singapore has among the lowest income tax rates in Asia. Individuals with a high income pay the lion’s share of 22 percent.

At the top end, Indonesia charges 45 percent, while the Philippines charges 35 percent. The lack of capital gains taxes in the country’s tax system has made it appealing to wealthy individuals.

Singapore’s Monetary Authority has stringent laws in place to safeguard bitcoin investors. Paxos, a stable coin issuer, received a preliminary Major Payments Institution license from the government, making it the first blockchain business to get regulatory control.

Startups with a maximum of 20 shareholders are eligible for a three-year tax exemption of up to $125,000 on the first $200,000 in earnings.

Singapore boasts arguably of the world’s most lenient cryptocurrency legislation. Although cryptocurrency is not legal cash, it may be utilized in various highly regulated trade situations.