I would have thought Singapore has adopted a cautious and conservative attitude towards cryptocurrencies, given that the Monetary Authority of Singapore issues warnings to Singaporeans that expound on the risks of the crypto world like scams and other illegal activities ever so often.

However, as I went down the rabbit hole of this digital world, I realized that many crypto firms are either actually headquartered or have offices in Singapore. Examples include the Litecoin Foundation, Gemini Exchange and KuCoin Exchange. These are internationally renowned firms that command a sizeable market share of the crypto industry.

Not only that, it seems that there is a Singaporean start-up for every kind of crypto company. If you are looking to deposit funds with a cryptolending platform, there's Hodlnaut. If you wish to support a local exchange, there's Tokenize. Cake DeFi is a DeFi firm that empowers you to engage in liquidity pooling and staking. Zilliqa was invented by the National University of Singapore. I truly love that Singaporean millennials are not afraid to set up companies that go head to head against their more established counterparts.

This year, Independent Reserve (an Australian-based crypto exchange) and Zipmex (a Thai crypto exchange) have also marketed themselves aggressively to Singaporean users. I know this for a fact because Facebook feeds their advertisements to my media feed every other day, thus surfacing me as a targeted customer.

On one hand, the MAS provides a conducive environment for the flourishing and thriving of crypto firms. On the other hand, Singapore is not letting go of traditional banks' dominance in the finance industry. One of our local banks, DBS, was given the go-ahead to operate a DBS Digital Exchange that enables trading services between four fiat currencies and four cryptocurrencies.

Not only that, the MAS displayed some assertiveness by shortlisting 15 "Global CBDC Challenge" participants to help build an in-house retail central bank digital currency (CBDC). A look at this video reveals that 15 finalists hark from all over the world: 6 Singaporean companies, 4 American firms, and one each from Australia, Barbados, Germany, France and Switzerland. It seems that the MAS is committed to this initiative as it is mentoring these 15 finalists and allowing them to pitch their solutions at the upcoming Singapore FinTech Festival which is slated to be held in November 2021. 3 winners will then be invited to deploy a retail CBDC in Singapore.

In a nutshell, it appears that Singapore is determined to have its cake and eat it too. It embraces crypto (with some boundaries. Binance was effectively banned in Singapore whereas Binance SG still carries out its operations). It does not relinquish its stronghold on fiat. 

My Thoughts As A Singaporean

As a teacher, I don't really get to have a feel of what it is like to have Singapore as a financial hub, one that roars mightily in Southeast Asia. But thanks to crypto, I have a clearer understanding of the astute financial moves Singapore is making in a bid to generate more foreign investment and encourage ground-up start-ups. I think that being shrewd and pragmatic enough to leverage the current esteemed status of cryptocurrencies can only bode well for our future, especially when I consider the fact that one of the world's fastest growing economies, Vietnam also has one of the world's largest crypto adoption rates. Making it an attractive environment for crypto firms will help us step ahead of the game and retain our competitive advantage.

I'm just wondering how the war of crypto versus CBDC will play out when Singapore rolls out its retail CBDC. Will Singaporeans take to our own CBDC? To what extent will the MAS encourage the adoption of the CBDC and discourage cryptocurrencies? I don't have a crystal ball but perhaps a tarot reading will reveal some answers for me?

Watch this space.