New bill in Singapore could broaden MAS regulatory oversight of crypto

Ripple Expands in Asia-Pacific with Full License to Operate in SingaporeEnterprise blockchain firm Ripple announced on Wednesday (UTC) that it has secured a full license to operate in Singapore, where it has established its Asia-Pacific headquarters since 2017.Photo by Sergio Sala on UnsplashFrom outline to full approval in 4 monthsThis development marks another step in Ripple’s strategic expansion within the Asia-Pacific region, known for its rapidly growing cryptocurrency market. Ripple’s journey to obtaining this full license began less than four months ago when the Monetary Authority of Singapore (MAS) granted it an initial in-principle approval in June. With the newly acquired full license, Ripple is now authorized to offer regulated cryptocurrency payment services in Singapore, a key financial hub in the region.Brad Garlinghouse, the CEO of Ripple, expressed his enthusiasm for the company’s continued growth in Singapore, stating:“We have hired exceptional talent and local leadership, doubling headcount over the past year and plan to continue growing our presence in a progressive jurisdiction like Singapore.”Global expansion strategyThe company also highlighted the fact that over 90% of Ripple’s business occurs outside the United States, making the Asia-Pacific region, and Singapore in particular, a vital part of its global expansion strategy.Monica Long, President of Ripple, explained in a recent interview with CNBC that the Singapore office has seen substantial growth in the past year due to the booming business opportunities in the Asia-Pacific region. This expansion aligns with Singapore’s leadership in crypto regulation in the region. The introduction of the Payment Services Act, which has been in effect since January 2020, has played a large part in that, regulating payment services and crypto services to the public.Singapore’s regulatory framework also includes requirements for crypto service providers to safeguard customer assets in statutory trusts by the end of 2023 and restrictions on facilitating lending or staking of retail customers’ assets. These measures ensure consumer protection and responsible growth in the crypto industry.Praising SingaporeGarlinghouse commended Singapore’s regulatory approach, stating, “Under MAS’ leadership, Singapore has developed into one of the leading fintech and digital asset hubs, striking the balance between innovation, consumer protection and responsible growth.” Ripple’s experience in Singapore differs entirely from the ongoing legal battle it has found itself in in the United States with the Securities and Exchange Commission (SEC).Both Ripple and Coinbase have found themselves embroiled in lawsuits with the regulator in the US. In Ripple’s case, the firm and its founders have been accused of unlawfully selling their native cryptocurrency XRP without registering it with the SEC. However, a landmark ruling in July determined that XRP, as a token, may not necessarily be classified as a security.Long spoke to the contrasting experiences the firm has encountered between the United States and Singapore. Long stated:”Being in Singapore a couple weeks ago felt like night and day compared to the US in terms of open dialogue with regulators, and thus being able to build innovative *and* compliant products.”Ripple, along with Coinbase and several other crypto firms, has criticized the lack of regulatory clarity in the US and has even considered relocating operations due to the SEC’s stringent regulatory stance. Notably, Coinbase also recently announced its successful acquisition of a major payment institution license in Singapore, following its in-principle approval obtained about a year ago.

Bitcoin mining company Bitdeer Technologies Group is finally set to go public on the Nasdaq this Friday after a series of delays. The Singapore-based firm, which offers cloud mining services, has been in a special purpose acquisition company (SPAC) merger process with Blue Safari Group. Drawn-out merger processBlue Safari Group filed for three extensions within six months last year, the last extension being a year long. The deal was originally expected to close in November 2021. The stopping block for the latest extension was insufficient time to get shareholder approval. However, Bitdeer Technologies Group revealed in a statement that shareholder approval has now been filed with the SEC.The merger was finally approved at an extraordinary general meeting of Blue Safari’s shareholders on April 11. The results of the vote will be included in a current report on Form 8-K to be filed by Blue Safari with the SEC. The deal is expected to close on April 13, 2023. Upon closing, Bitdeer Technologies Group will remain as the combined company, and its shares will begin trading on the Nasdaq under the ticker symbol “BTDR” on April 14.Bitdeer CEO Linghui Kong said, “Today marks a significant milestone for Bitdeer, leaving us poised to list on the Nasdaq and equipped to seize the growth opportunities ahead of us. I am incredibly proud of what we have achieved so far and look forward to embarking on the next chapter of our journey.” The firm operates six mining data centers globally, with an aggregate electricity capacity of 775MW at the end of 2022. Surviving crypto winterBitdeer Technologies Group, backed by Bitmain founder Jihan Wu, offers cloud mining services, and is participating in a market that has been impacted by market volatility. However, miners that have survived are doubling down on expansion efforts. Yesterday, for example, the U.S. mining firm CleanSpark announced the purchase of 45,000 new mining machines for $144.9 million.Bitdeer will be part of a growing list of Bitcoin mining firms listed on Nasdaq, joining the likes of Riot Blockchain, Marathon Digital, and Canaan. Green miningRecently, the cryptocurrency mining industry has witnessed significant growth in green mining efforts. Terawulf, a US-based company, recently announced that its nuclear-powered mining facility, Nautilus, will come online soon. When fully operational, Nautilus is expected to have a hash rate of 1.6 exahashes per second (EH/s). The facility will run on nuclear power, which will significantly reduce the carbon footprint of the mining operations.The energy-use of crypto mining has been coming under scrutiny relative to its carbon footprint and the demands it places on the power grid. In what many in the crypto space have called a “hit piece” targeting mining, the New York Times took aim at the industry on Monday. Bitdeer took to Twitter to call out false claims made by the publication relative to its use of energy during a 2021 winter storm.Bitdeer’s journey to becoming a publicly-traded company has been fraught with delays, but with shareholder approval in place, the company is ready to enter the public markets.

Cebu Meeting of FSB Highlights Crypto RisksThe Regional Consultative Group for Asia of the Financial Stability Board (FSB) has highlighted the risks implicated by crypto assets in a series of meetings held on Thursday and Friday in Cebu, the Philippines.The FSB is an international body with a mandate to monitor the global financial system, as well as make recommendations in respect of that system. The agency was established by the G20 group of countries in April 2009, replacing its forerunner, the Financial Stability Forum.Photo by John Alvin Merin on UnsplashA regulatory framework for cryptoThe two-day event focused on non-bank financial intermediation (NBFI) in Asia and the development of an effective global regulatory framework for crypto-assets. It discussed recent developments in financial markets, together with their regional impact.In opening remarks, Philippine Central Bank Governor, Felipe Medalla, stated: “Crypto, the biggest issue there is, whether we like it or not is quite a lot, especially younger people who are actually gambling. They have huge losses, our view right now. Well, you’re there, it’s your problem and the regulation becomes strict the moment crypto meets banking.”International participants highlighted the need for the development of an effective global regulatory framework for crypto-assets. Particular concern exists with regard to the potential for systemic risk in relation to crypto and a potential overflow into the traditional financial system.Earlier this year, the FSB proposed a complete regulatory framework for cryptocurrencies, with the report having been originally submitted in October of last year. Among its key components is the imposition of tighter controls. It proposed the guiding principle of “same activity, same risk, same regulation” for crypto assets, mirroring the approach taken for traditional financial assets.Global approach to taming cryptoThis approach has proven to be problematic for people working within the digital assets space. Many of the core facets of cryptocurrencies are entirely different to anything we see in traditional finance. Trying to frame crypto within an existing approach and standard has been perceived by many to be akin to trying to fit a square peg in a round hole.It’s not the FSB's role or place to affect policy directly. That responsibility lies with policymakers and regulators in each individual country. However, the organization is seeking to influence those individuals and entities in the hope that they will employ its suggested regulatory framework.Klaas Knot, Chair of the FSB and President of the Dutch Central Bank, provided this view on crypto: “We will come up with a global regulatory framework. It also only makes sense to regulate this from a global perspective. Because, nowadays you can take a server and put it anywhere in the world and start issuing these digital assets.”From Knot’s take, it’s clear that governments and central bankers are cottoning on to the fact that individual nation-state regulation is futile to an extent where decentralized innovations like cryptocurrency are concerned. Others such as European Central Bank (ECB) President Christine Lagarde and Mark Branson, President of German financial markets regulator BaFin, similarly have called for a globally enforced regulatory approach over the course of the past year.Ongoing struggleWhile regulation can be helpful, particularly when it comes to the points at which crypto meets the traditional system, there’s no doubt that this emerging innovation will disrupt the conventional system to some degree or other. That may place an incentive before central bankers and governments to try and stymie the further development of digital assets.While a truly global approach to regulating digital assets could retard development of the sector, there is rarely total consensus among world governments on a single issue. Therefore, by its very nature, crypto, and the digital assets sector will likely continue to develop regardless. It’s more a question of how long that process takes.