Alternatively Titled as Singapore’s Rapid Evolution Into a Blockchain Hub
By Amelia Choo
Spanning an area of 721.5 square kilometres (278.6 square miles) with a total population of 5.64 million, it is hard to imagine this tiny island city-state having any impact on the affairs of the world. Yet, it is indisputable that Singapore has left its mark in the blockchain industry. Its initiatives have taken its central bank, the Monetary Authority of Singapore (MAS) alongside the Bank of Canada, to be the pioneers in successfully settling a first-of-its-kind cross-border payment last week.
So, How Did It All Begin?
Singapore’s initial foray into blockchain technology can be traced back to 2017. In November of that year, MAS released the Payment Services Bill (PSB) that saw the regulation of digital currency as equal to foreign exchange transactions, and domestic and international payments. This made Singapore one of the quickest countries to respond to the growing crypto conversation. To further guide the burgeoning interest in crypto assets, MAS published “A guide to digital token offerings” on their website that provided a comprehensive outlook on the legislature of digital tokens in Singapore.
Following the explosive growth of crypto in 2017, 2018 saw the entrance of several well-established cryptocurrency exchanges into the tropical island. These exchanges include South Korea’s largest cryptocurrency exchange, Upbit, with a daily trade volume of $182,196,661 (CoinMarketCap) and world renowned exchange Binance with a daily trade volume of $1,029,362,368 (CoinMarketCap). Binance has also since set up shop in Singapore through a crypto-to-fiat exchange that was launched earlier this year.
A few months inching into 2019 and security breaches in major cryptocurrency exchanges have flooded the news. Unfortunately, some of the breached exchanges include Singapore-based cryptocurrency exchange DragonEx that suffered a cyber attack, resulting in a loss of cryptocurrency funds in users and the exchange. MAS thus updated their Bill in January to protect the interest of current cryptocurrency investors. The amended Bill proposed to introduce a dual-track regulatory guideline for larger and smaller financial corporations respectively.
Taking crypto security a step further, Singapore has also made its first move in regulating cryptocurrency scams. A month earlier in April, the Singapore Police Force arrested two Singaporeans discovered to be implicit in the multi-level marketing of cryptocurrency hoax, OneCoin. Through this arrest, Singapore has made its stance clear regarding cryptocurrencies that profit off deceit and malice (or what the public colloquially refer to as sh!tcoins) — it will not hesitate to legally vindicate them in court for their malicious actions.
So, What Are The Areas That Singapore Has Ventured Into?
1. Clearing and Settlement of Payment and Assets
Project Ubin is a collaboration between MAS and industry experts to explore the use of blockchain technology in the clearing and settlement of payments and assets. Due to its immutable nature, blockchain technology possesses the potential to make financial transactions more transparent and resilient at a lower cost. As an experimentation on blockchain technology, the project is intended to aid MAS in understanding and exploring the potential of blockchain technology as an efficient alternative to traditional payment methods through the use of bank issued digital tokens.
2. Trade and Trade Finance
A collaboration between Singapore’s Infocomm Media Development Authority (IMDA), Maritime Port Authority, Singapore Customs and the Singapore Shipping Association, TradeTrust is a blockchain-based maritime trade platform that aims to streamline the complex processes involved in maritime shipping in a bid to save more cost and time.
3. Validation of Education Certificates
OpenCerts was unveiled in an announcement by Education Minister Ong Ye Kung last Friday (May 3) as an “easy and reliable way” for the validation and security of education certificates. Students will receive their tamper-resistant certificates through a virtual portal provided by OpenCerts that is accessible to all. OpenCerts is a “national-level initiative” jointly developed by SkillsFuture Singapore (SSG), Government Technology Agency (GovTech), the Ministry of Education (MOE) and Ngee Ann Polytechnic (NP).
That being said, the list above is not exhaustive by any means. As Managing Director of MAS, Ravi Menon states, “blockchain is most suitable in scenarios where it is important to know the histories of ownership; multi party coordination is required; and there is no trusted central party or reliance on the central party is inefficient,” and there are plenty of scenarios out there that fit the cut above.
Just two days ago, the Singapore and Malaysia branches of Domino’s Pizza announced its partnership with SingularityNET. The partnership intends to streamline its supply-chain processes by integrating them with blockchain-powered artificial intelligence (AI) technology.
Judging by the rapid measures Singapore has undertaken to implement blockchain technology in its nation, it will be to no surprise if Singapore is hailed as the Blockchain Hub of Asia in the recent years to come.