Why Singapore Is Leading Blockchain Evolution
Vote now for your favorite headline:
1. Silicon Valley of the Shadow: How America Failed to Seize the Blockchain Opportunity
2. Age Pacific: Why the New Internet is APAC-Driven
Yes, the first title is unnecessarily alarmist. But selling books is about knowing your audience. Not that we at BAC are planning to write that book. Rather, we’re explaining our decision to position our global planning from an APAC-outward perspective, with our heart in Singapore, what we’re calling the new nexus of Web 3.0.
But why do we predict a book like this is on its way?
Mothers of Invention
In principle, it’s simple — need drives innovation, and regulatory cooperation spurs adoption of that innovation, enough to achieve critical mass.
In the APAC region, there is a huge need for the benefits of blockchain, most saliently in terms of payments, supply chain management, and digital identity.
Yes, blockchain benefits would be much welcomed in all regions, and may be even more needed in Africa. However, nowhere is blockchain evolution being more strongly nurtured by a government than in Singapore, whose blend of initiative and careful oversight in financial/industrial development has served as a model for the APAC region in recent history, in categories as diverse as open banking, data governance, and food safety regulation.
Government Cheese
For blockchain technology, the leading role is unmistakable. PWC’s August survey reported that 82% of Singapore executives have launched blockchain initiatives in their organizations, with 13% bringing such initiatives to market.
Do not credit the execs for their bold vision, but rather the Singaporean government for taking a lead role in recognizing the opportunity, and making sure the rubber starts hitting the road.
Since 2016, the Monetary Authority of Singapore (MAS) has been working with a consortium of financial institutions and blockchain companies to develop Project Ubin, which will put a tokenized Singaporean dollar on the block chain to be used for interbank settlements.
The MAS is also working with the Singapore Exchange, Ltd. (SGX) to test blockchain technologies for tokenized asset settlement in the form of delivery vs payment capabilities. Both parties believe the blockchain will make these processes more efficient, reducing settlement risks.
Another Singapore government agency, the IMDA, is providing seed funding to various firms for an exhaustive blockchain tech platform that will allow reciprocal participation from within and withut the blockchain sector. The project aims for mainstream adoption outside of the fintech industry, and will develop guides and development initiatives, as well as channels for participation with Silicon Valley and China.
E-government group CrimsonLogic, a subsidiary of International Enterprise Singapore, has created its “Open Trade Blockchain” (OTB), dedicated to optimizing trade between ASEAN nations and China. Many operators have signed up, including Singapore’s Commodities Intelligence Center.
Meanwhile, America’s SEC is leading the government charge against blockchain, not so much in its application, but in (much needed) regulation of cryptocurrencies, and the semantic debate about what constitutes a security.
As a result, the U.S.’ most notable government-sponsored blockchain use case to date has been a federal contract to help the Department of Homeland Security secure data captured from border control devices. We’re going to go out on a limb and predict that data will not be available to the public.
Top Down Results
By contrast, and in the absence of a truly free market, it would appear that a government leading by example begets similar private initiative, at least in Singapore’s case.
SP Group, a major Singapore electricity and gas corporation, has launched a Renewable Energy Certificate (REC) marketplace powered by blockchain, one which will support both local and international certificates. Global real estate developer CDL and multinational bank DBS are on board, as well as three solar energy sellers.
Singapore KPMG working with Singapore Airlines and Microsoft to develop first airline loyalty points “digital wallet” based on blockchain, called Krispay.
Pointing out the involvement of large corporations is not intended to give short shrift to the dozens of notable blockchain startups in Singapore, but rather to avoid begging the question.
Universal Appeal
Naturally, Singapore’s famously friendly business environment factors into the trend of foreigners setting up shop in the city-state. But the fact that 17 ICOs launched there in August, to America’s 15, and none in the Caymans or Seychelles, speaks more to Singapore’s blockchain-friendly environment than to its tax haven status.
In terms of name-recognition, Litecoin, winner of the Flappening, is a Singapore company, as are notables TenX, Quoine, and CoinGecko.
Less hyped, but no less switched-on internationals are also flocking to Singapore. Leading blockchain services firm Wachsman has recently opened an office there, in recognition of APAC as a priority region, and of its blockchain capitol. Canadian tech pioneer Pavel Bains has chosen Singapore as the home of his blockchain startup Bluezelle, as has Cocoon Capital co-founder and managing partner William Klippgen, for a twenty million dollar fund aimed at early stage Southeast Asian startups.
The message is not that Singapore is growing a monopoly on blockchain innovation, but rather that it has become the nexus for APAC activity in this new industry. And just as the scope and growth of ecommerce in the region has surpassed that of the West, so to will its share of the blockchain market in years ahead, at a projected CAGR of 87%.
Blockchain entrepreneurs would do well to take note, as well as to recognize, as we at BAC have, Singapore’s unique positioning in the region as the place for leveraging related business environment and network to advantage.
