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04 October 2021

Cryptocurrencies Back on the Agenda

Cryptocurrencies are back on the agenda, as the industry faces headwinds on the global stage. Crypto is now outlawed in China, facing clampdown in South Korea and subject to new restrictions in Hong Kong. In an attempt to gain legitimacy, the industry is eyeing Singapore as a potential hub for the Asian market. The island nation of 5.5m people faces fierce competition from Hong Kong and Japan for the title of ‘Asian global financial hub’ and hence has accepted the crypto industry, although with caution. The country also opened its arms to fintechs (financial technology companies) seeking to disrupt traditional banking and has backed innovative industries with accommodative legislation providing a much-needed boost. In January 2020, Singapore introduced the Payment Service Act, a law that regulates companies handling digital payments and trading tokens such as Bitcoin.

There have been hiccups in the process, with a recent example being Binance, as the Monetary Authority of Singapore (MAS) putting its global site on the country’s investor alert list. This, in turn, prevented Singaporean customers from using it, though the regulator left the strictly regulated version of the site unaffected. Japan, on the other hand, which was the first country to legalise the cryptocurrency in an attempt to present itself as a hub of financial innovation, is now struggling to balance the risk crypto assets possess with significantly increasing investments in the blockchain technology. Since 2014, major Japanese crypto exchanges have collapsed; with the addition of crypto scams increasingly affecting individuals and companies, Japan finds itself in a difficult position.

Please note that investments and income arising from them can fall as well as rise in value. This communication is for information only and does not constitute a recommendation to buy or sell the shares of the investments mentioned.
 
Cryptocurrencies Back on the Agenda

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