Why Singapore is one of the most crypto-friendly countries

Why Singapore is one of the most crypto-friendly countries

Selva Ozelli is an international tax lawyer and CPA. She writes monthly Expert Take columns about the intersection of emerging technologies and sustainability.

Coincub, a global crypto rating agency, ranked Singapore as the most cryptocurrency-friendly country at the end of 2021, a year that saw Bitcoin (BTC), Ether (ETH), rise 100% and 30%, respectively. This was due to the country’s “robust economy,” positive legislative environment and high rate for cryptocurrency adoption.

Cryptocurrency consumer protection law

The regulators of Singapore have done a lot to support the blockchain industry. Its No. Its No. 1 ranking by Coincub has been proven correct by prompt regulatory actions taken by the Monetary Authority of Singapore, the country’s main financial regulator. This was after the cryptocurrency market crashed in January 2022 and fell into bear market territory.

During mid-January, Singapore’s MAS enacted consumer protection laws for investors exposed to constant reminders of digital assets via billboard ads or crypto ATMs, banning all cryptocurrency-related advertisements and ATMs in public spaces.

Similar: Clampdown crypto ads: A one off or a new phase in global regulation?

MAS stated in a statement that it supports blockchain technology development and innovative use cases for crypto. However, cryptocurrency trading is highly risky and should not be trivialized.

January 2020 Payment Services Act

As a result of the Financial Action Task Force’s 2018 update on its Anti-Money Laundering and Combatting Financing Terrorism (CFT), cross-border risk guidelines, Singapore’s Payment Services Act was enacted in January 2020. The Payment Services Act provides a flexible framework to regulate payment systems and payment service providers in Singapore. It establishes registration requirements and CFT guidelines for cryptocurrency-related businesses.

MAS has been selective when issuing licenses for cryptocurrency businesses. Many applicants failed to get licenses to operate within the country. DBS Bank, Singapore’s largest bank, OCBC Bank and IBM were among the licensed to operate. Fintonia Group launched two institutional-grade Bitcoin funds.

Initial coin offerings

In August 2017, MAS published guidelines to address the wave of initial coin offerings. These guidelines stated that if an ICO is deemed to be issuing a security it would need to be subject to regulation. MAS then issued “A Guide To Digital Token Offerings”, which further explains the regulations in Singapore.

Taxation of cryptocurrency

Singapore is a low tax jurisdiction. According to Desmon Teo of Big Four accounting firm Ernst & Young and Lee Vin Wee, the Inland Revenue Authority of Singapore exempted payment tokens from the goods and services tax effective January 1, 2020. Capital gains from the sale or purchase of cryptocurrency are not subject to tax in Singapore.

Similar: Debunking the major tax myths surrounding cryptocurrency

Blockchain adoption

Singapore is a major financial and shipping center with the tenth highest GDP per capita. However, it has become a global crypto hub in a short time thanks to its favorable regulatory and tax infrastructure, and its use of blockchain technology in many aspects of its economy. MAS is optimistic about the potential of blockchain and crypto, especially in expediting cross-border trade finance. However, MAS does not consider cryptocurrencies to be investment assets for retail investors.

Cryptocurrency exchanges

One survey found that 43% of Singaporeans have cryptocurrency. Comparatively, the overall crypto ownership rate in South Africa is 11.3%, 10.5% in the United States, and 9.8% for Sweden.

Retail investors can trade cryptocurrencies via a variety of cryptocurrency exchanges including Coinbase and Kraken, FTX. Binance, the largest crypto exchange in the world, bought an 18% stake at the Singapore-regulated private securities trading exchange Hg Exchange. Then, it announced that it would cease operations at Binance Singapore by mid February 2022. Reuters published a special report detailing Binance’s opaque corporate structure and weak compliance with CFT and AML globally.

Huobi, the sixth-largest cryptocurrency exchange in the world, announced that it will close all accounts in Singapore by March 2022. SIX Digital Exchange, a sister company to SIX Swiss Exchange that operates Switzerland’s national stock market, announced a partnership agreement with SBI Digital Asset Holdings (a division of Japanese financial services and banking giant SBI Group) in order to create a crypto exchange as well as a central securities depository in Singapore. Asia Digital Exchange is a joint venture that aims to establish a global, regulated liquidity pool for digital assets across Asia and Europe.


Many large banks, including Barclays and BNP Paribas as well as Citi, BNY Mellon and Citi, Deutsche Bank, HSBC and Orient Securities, have joined Marketnode. This joint venture is a digital asset joint venture between major investment holding company Singapore Exchange and government-backed investment firm Temasek. The purpose of the project is to explore blockchain technology that focuses on capital markets workflows via smart contracts, ledger, and tokenization technologies. Marketnode also collaborated with RootAnt Global, a Singapore-based fintech company, and SETL, a United Kingdom-based platform for blockchain technology. This partnership will focus on fixed income and multiasset end-to–end infrastructure development.

Grab — a Singapore- and Indonesia-headquartered company focused on mobile applications for transportation, food delivery and cryptocurrency payments — and Singapore Telecommunications have each acquired a 16.3% stake in PT Bank Fama International in order to pursue digital banking opportunities in Indonesia. They have jointly secured a digital banking licence in Singapore.

Trade and cap and trade in renewable energy

Efforts to recover from the COVID-19 pandemic are growing rapidly around the globe, especially after the COP26 conference held in November 2021. Global warming is putting Singapore at risk of rising sea levels. Singapore has 30% of its landmass below the sea level.

Singapore relies on natural gas for power generation. The Sunseap Group of the nation, a developer of solar energy systems, has plans to spend $2B to build the largest floating solar farm in the world, Batam. This will double its renewable energy potential. Temasek will collaborate with Standard Chartered, DBS Bank, SGX, and Standard Chartered in order to create a blockchain-based platform, Climate Impact X. This exchange will allow carbon credits to be traded. A blockchain-powered exchange to trade renewable energy from SP Group, a utility provider, is already available in the country.

Related: UN’s COP26 Climate Change Goals include Emerging Tech and Carbon Taxes

Companies that mine green cryptocurrency

Cryptocurrency mining involves the creation of new tokens through complex calculations that are performed by powerful computers. This requires a lot of electricity. China was once the largest crypto miner in the world. In May 2021, it closed down crypto miners. The stability of cryptocurrency prices is a key factor in the profitability of crypto mining companies.

Bitdeer and Saitech are all Singapore-based cryptocurrency mining firms with operations outside of the country. Bitdeer, Saitech and Sharemine AI are looking to be publicly listed on Nasdaq. Saitech uses the mining waste energy to create electricity for residential, agricultural, and industrial purposes. Bitdeer and Sharemine AI mine clean energy from solar and hydroelectric power.


Nanyang Technological University, Singapore, recently examined Singapore’s and China’s shipping industries. It found that digitizing shipping documents could help reduce carbon emissions by more than 99%.

Related: How can blockchain technology be used to combat climate change? Experts have the answer

PSA International is the world’s biggest container port operator, with headquarters in Antwerp and Singapore, and other locations in 26 countries. It is currently exploring digital assets and blockchain to help achieve its decarbonization goals. Participant in the supply chain blockchain platforms TradeLens, GSBN and indirect minority shareholder in Global eTrade Services. The latter offers an Open Trade Blockchain for documents. PSA has signed an agreement with RHT Group of Companies, a Singapore consulting firm, for an environmental and social governance project.


Tribe Accelerator, a blockchain accelerator, was launched by Trive Ventures (a Singaporean venture capital company), with the goal of increasing and streamlining Blockchain adoption in Asia. It also includes financial services applications. It is the first blockchain accelerator to be supported by the Singaporean government (backed by MAS, Temasek).

Citibank, IBM and Intel are also backers. Tribe has so far funded over 30 startups, with more than $1B in total value. Microsoft launched the Singapore GreenTech Challenge in November 2021 to help startups make progress and implement Singapore’s Green Plan.

Digital currency central bank

According to the Atlantic Council, Singapore is one of 87 countries that are exploring central bank digital currencies (CBDC) through Project Ubin.

MAS has been testing CBDCs, and discussing the creation multiple CBDC arrangements to increase the speed, transparency, and cost of cross-border payments. It has created a multi-currency prototype wholesale settlement network that will allow the distribution and issuing of different CBDCs through a single network, in partnership with China.

Similar: Asian CBDC projects – What are they doing right now?

Nonfungible token

Singapore Art Week 2022 ran from January 14 to 23. TZ APAC hosted TZ APAC. This showcased Asian digital artists and featured an industry-first, nonfungible token (NFT), at the S.E.A. The Focus showcase.

ArtScience Museum, Singapore, the first Asian museum to have major exhibitions that integrate art, science and culture, opened “Radical Curriosity: In The Orbit of Buckminster Fuller” in conjunction with Singapore Art Week’s final weekend, said Adrian George, director, programs and museum services, ArtScience Museum.

Richard Buckminster Fuller, an American architect and systems theorist, inventor, and author, is known as the “grandfather” of the future. He was also known for his prediction of a technology similar in nature to cryptocurrency. Fuller stated in a 1967 video interview:

“I will have to speak about something which will become one of the most important, new realizations by 2000 AD. It will be a realistic scientific accounting of what it means to be wealthy. […] Energy is wealth.

ArtScience Museum didn’t offer NFTs for the “Radical Curiousity” exhibit. Here is a Fuller image created by Freeos, and shared on Twitter

I just dropped the Buckminster Fuller #NFT in our #Freeos #Beta Testers. Thank you everyone!https://t.co/yBXH5ZRJEu pic.twitter.com/zmyRKu64R1
— Freeos (@Freeos_dao), October 6, 2021. The views, thoughts, and opinions expressed in this article are solely the author’s and do not necessarily reflect the views or opinions of Cointelegraph.
Selva Ozelli, Esq. CPA is an international tax lawyer and certified public accountant. She frequently writes about tax, legal, and accounting issues for Tax Notes and Bloomberg BNA as well as other publications such the OECD.

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