Article | Su Zihua
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Huang Xunchai, Singapore's Deputy Prime Minister and Minister of Finance, was unhappy.
In the past quarter, Singapore's top government officials and the Monetary Authority of Singapore (MAS) have repeatedly released their attitudes towards web3 on different occasions: cryptocurrency has no intrinsic value, and Singapore is not optimistic about cryptocurrency.
This sentiment reached a climax after the bankruptcy of FTX, a cryptocurrency exchange valued at $32 billion. Last week, Huang Xuncai strongly stated in the Congress that Singapore does not plan to become the center of cryptocurrency activities. He stressed that speculation in cryptocurrencies was no longer tolerated.
In the past year, Web3 has become a means to show "ambition". Many countries and regions, including Singapore, the United States, the United Kingdom, Japan, the Caribbean, the United Arab Emirates and Dubai, are saying that they should attach great importance to Web3 and even become a global crypto asset center. It seems that not embracing web3 wholeheartedly is equivalent to not paying attention to scientific and technological innovation.
Now, cryptocurrency is embarrassing Singapore.
After the FTX thunderstorm, data shows that about 240000 Singaporeans lost their property, accounting for 4.2% of Singapore's population. Temasek, an investment institution controlled by the Singapore government, has made a total investment of 275 million US dollars in FTX, which has gone wrong.
Huang Xuncai said that he was very disappointed with Temasek's losses. He Jing, the first lady of Singapore and former CEO of Temasek, said that the investment was "a shame on the face". The reason is that the FTX of their investment is a company with poor management and possible fraud.
In the past, relying on friendly supervision, Singapore has attracted a large number of cryptocurrency companies to set up offices in the local area within two or three years, and the blockchain industry has become more and more active. The founder of Ethereum "V God" said in September 2021, "Many people have moved here, and Singapore has become one of the centers of the cryptocurrency community."
However, with the advent of the bear market, in the past six months, more and more cryptocurrency companies have exploded, and their reputation is not very good, or their management is poor, or there are fraud problems.
These "problem teams", more or less, can be associated with Singapore and have an impact on national reputation. Kelvin Low, a law professor at the National University of Singapore, said in an interview with the Financial Times that the situation of reputation damage is much more serious than people know. Whenever such companies have problems, they can always trace back to Singapore.
Faced with a difficult situation, Singapore has made a choice. Huang Xunchai, the Deputy Prime Minister and Minister of Finance of Singapore, gave clear boundaries at the two recent events: refuse to speculate on encryption, and the supervision will be stricter; Focus on responsible Digital asset ecosystem Innovation.
This will determine the next ecological direction of Singapore Web3.
What kind of Web3 does Singapore want?
In June this year, Wang Ruijie, Singapore's Deputy Prime Minister and Minister of Economic Policy Coordination, highlighted the scope of Web3 in a broad sense: Metauniverse, NFT, DeFi and DAO.
Cryptocurrency speculation is strictly prohibited. The Singapore government believes that "tokenization and distributed ledgers recording the ownership and transfer of digital assets provide economic potential." - This is the right way for them to innovate in digital assets.
He Xin (not his real name), research director of a head encryption fund in Asia, said to 36 Krypton that Singapore's attitude towards digital assets did not change significantly because of the FTX incident. "Singapore has never failed to embrace the encryption industry, But the encryption industry that Singapore embraces is biased from what the public understands. "
He believed that in the recent speech of the Monetary Authority of Singapore (MAS), they also showed their vision of financial technology. "They have proposed five breakthroughs in the digital asset industry, such as Real time remittance, atomic settlement, programmable currency, certificated assets and credible sustainable development data This is the direction that Singapore will actively contribute to development. "
In an interview with Xinhua News Agency, Meng Wenneng, Director of the Monetary Authority of Singapore, focused on explaining programmable currency and certificated assets.
In his view, programmable currency has Cryptocurrency, stable currency, token bank deposits and central bank digital currency These four forms. Among them, cryptocurrency is not optimistic. "Apart from blockchain networks, cryptocurrency has no useful function except as a speculative tool".
He believes that the real value of the encryption industry comes from the certification of assets. For example, physical assets and financial assets will be certificated to improve the efficiency of financial transactions and reduce risks. It can be understood that tokens need to be bound with works of art, real estate, securities, or carbon credit lines and other things of real value to form recognized digital assets.
On the contrary, entrepreneurs engaged in cryptocurrency business are welcoming the "chill" from Singapore.
Singapore has not completely prohibited cryptocurrency related businesses, but they stressed that the approval of enterprises that want to conduct cryptocurrency business is becoming "Strict and long" 。 Some entrepreneurs feel that this process is long and painful.
In the Congress, Huang Xuncai said that "the past forecast was too optimistic". At present, Singapore's definition of digital assets they encourage is becoming clearer. What kind of enterprises are welcome and what kind are not welcome are more specific.
The next stop of the encryption industry
Some scholars believe that Singapore has achieved the goal of competing for talents and promoting employment through Web3.
In fact, since the end of last year, Singapore's regulation of the encryption industry has been tightened all the way to cool the industry.
At the end of 2021, the Monetary Authority of Singapore listed the world's largest cryptocurrency exchange, "Jin'an", on the "Investors must be vigilant list" and prohibited it from providing services to Singapore residents. Coin On Singapore Station was also completely closed. Gleb Kostarev, regional director of CMA Asia, said that "times have changed".
In January this year, Singapore banned cryptocurrency service providers from promoting their products to local residents. It shall not be publicized on websites, radio, billboards and other channels.
In April, the regulator proposed a new regulation: local companies need to apply for local licenses in Singapore even if they provide services abroad.
In October, the regulator said that it would continue to strengthen efforts to prevent retail investors from participating, and planned not to allow retail investors to use credit cards and leverage to purchase cryptocurrencies. And trying to limit the issuance of local stable currency.
What many institutions want most is the retail market.
In contrast, Hong Kong's determination to encourage retail transactions is more "radical" and open.
At the end of October, Hong Kong released the "Policy Declaration on the Development of Virtual Assets in Hong Kong", which for the first time explicitly implemented the development of virtual assets into a document, clearly stating that retail investors are allowed to buy and sell virtual assets in compliance, and retail investors are allowed to participate in relevant transactions.
A Web3 entrepreneur used to prefer Singapore, but he told 36 Krypton that he planned to "test" and set up an office in Hong Kong next.
For him, Singapore's stable regulatory framework is the main attraction, providing more security for entrepreneurs. For example, even the technological innovation that cannot comply under the current regulatory framework can be allowed to do some tests in a short period of time.
"Singapore's advantages are reflected in its political stability, sound regulatory framework, good business environment, complete infrastructure and other aspects." EUI OKX Research Institute interpreted 36 krypton, "Singapore's policy on the encryption industry is to encourage technological innovation while maintaining caution, but it is not to prevent such innovation."
They believe that Hong Kong's advantages are: "with years of financial technology precipitation, excellent academic environment, talent pool from all over the world, a sound legal system, it can also give full play to its own advantages, deepen cooperation with the mainland, and its advantages are also very obvious."
According to He Xin, the research director of the crypto fund mentioned above, in terms of policy, both cities are more open to licensing, There is little difference. The difference will be more reflected in the implementation level of business environment, including basic supporting facilities, such as enterprise bank account opening, talent introduction, etc.
He believes that both places will have strong competitiveness in policy and practice in the future. "Hong Kong will catch up. The dispute over the status of the Asian digital asset center has not been settled yet."
