North America innovates, Europe regulates, Asia adopts and scales up — that’s how Web3 market feels as of recently, with Singapore and its laws on crypto slowly becoming Tier-1 business incubator for Blockchain-related startups. Read up to learn why and how Singapore kicks the Web3 sector into motion.
Why has Singapore become a hotspot for Web3 Innovation?
Investment influx. The bull market of 2021 drove $1.48B+ in funding to Singapore’s Blockchain and Crypto sector, amounting for half the total Asia-Pacific venture capital. According to KPMG 6% of global crypto funds were located in Singapore, keeping toe to toe with Switzerland and Hong Kong.
Entire tech sectors started to move: Dyson moved HQ to Singapore, Huobi Group moved its HQ from China, imToken followed and did the same, GuardforceAI, and even Crypto.com all moved to Singapore. Crypto ownership rate in the region changed from 11% to 24% in just under a year.
Money moves from crackdowns. After China started to crack down on mining and crypto trading in 2021, capital started to change geolocations. After the FSMA act, institutions followed and in 2022 Paxos received regulatory approval to work in Singapore.
Three Arrows Capital collapse in 2022 put the region on its toes. To ensure proper safety, MAS introduced new legislative papers. Single-Currency Stablecoin (SCS) and Digital Payment Token (DPT) frameworks were being made. The goal was to make the region safer for broader investors to participate in, and it made Singapore a hotspot for Web3 and Blockchain talent who sought regulatory certainty.
In 2023 Singapore became the spot of choice for blockchain and crypto-related startups. After moving in, Crypto.com established a serious R&D Lab in Singapore with the aim to build blockchain tech, expand on Web3 core ideas, and research prospects of AI use. In the October of the same year cryptocurrency exchange LocalTrade joined in on the relocation trend and moved HQ to Singapore after Linkmate acquisition.
What makes Singapore a sought for Web3 spot?
The Managing Director of the Monetary Authority of Singapore (MAS) said it best in his 2022 speech: “Yes to digital asset innovation, no to cryptocurrency speculation.”
Instead of over-regulation, Singapore chooses innovation by building one of the world’s most transparent licensing frameworks for digital payment token service providers under the supervision of the Monetary Authority of Singapore (MAS).
In just 3 years Singapore adopted Single-Currency Stablecoin (SCS) — basis for legality of stablecoin issuers for likes of Circle and Tether. The next step was the Digital Payment Token (DTP) framework, which ensured every Crypto-related operation wouldn’t suffer from regulatory uncertainty. Without regulatory risks the sector became a prime spot for long-term planning without risks of losing entire business to government overstepping.
Smart Money Hotspot. High concentration of Smart Money finishes the Incubator cycle in Singapore. Total AUM of Singapore investment funds reached $4T+ with over 1029 registered funds. Among them are big names like Antler, Temasek Holdings, Vertex Ventures, Jungle Ventures and CIG. With its largest concentration of Venture Capital funds, Family Offices and Financial Institutions, Singapore creates breeding grounds for high level tech companies.
Trend — Asia moves at the speed of market innovations
After Singapore was established as a regulatory safe haven for Web3 innovations, strategic acquisitions followed. The crypto market moves fast, and so, companies found ways to adapt by acquiring established exchanges, digital asset infrastructure, and ecosystemic-crucial projects.
Ecosystem Expansion via Acquisitions started to take shape:
- 2022. Circle acquired Cybavo, a Singapore-based enterprise-grade asset cybersecurity and custody project, pioneering the Infrastructure-as-a-Service approach;
- 2023. Treehouse acquired NFT analytics platform Origins. Thanks to its on-chain and off-chain data analysis capabilities, Origins helped to reinforce Hyperion portfolio management platform from Treehouse and satisfy NFT exposure demands of its clients;
- 2023. Fireblocks Singapore bought BlockFold, smart-contract developer with expertise in Tokenization, crucial for Fireblock’s approach to multi-signature approach and fund management ecosystem;
- End of 2023. Singapore-based software developer Linkmate acquires LocalTrade cryptocurrency exchange platform to meet goals for its 2026-2027 roadmap. Acquisition aimed to bolster Linkmate ecosystem with trading products, and provide secure financial services in the region.
Singapore just makes sense from a long-term standpoint for Web3 projects. The Monetary Authority of Singapore chooses innovation and progress contrary to draconian measures taken by China and it draws talent in. Legal frameworks in place and policies only reinforce opportunities for growth instead of blocking it, while access to venture capital makes it easier to secure investment.
The formula other regions should follow is simple: transparent and fair crypto laws, policies aimed at growth rather than control, and investment hubs. Singapore proved it is possible, and this deserves to be a template for the future of Web3 market.
