Can Singapore be Asia's cryptohub?
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Several countries in Asia are racing to develop the region’s “cryptohub”, an area dedicated to supporting and advancing cryptocurrency, blockchain, and financial-technology innovation. The Philippines has what it calls the “Crypto Valley of Asia” in Cagayan, a remote north-eastern province on Luzon, where more than 20 crypto companies have already agreed to place offices. South Korea, for its part, is building support to turn Jeju Island into a zone where startups can legally offer initial coin offerings. And Thailand, not to be outdone, has established crypto-friendly policies that will surely attract exchanges and other ventures to locate there.
One country is noticeably absent in the race to create the cryptohub par excellence of the region: Singapore. You can argue that, at the moment, Singapore is the de facto cryptohub in Asia, and therein lies a major problem. Singapore is still managing to lead the way in this space because of its vibrant tech and startup ecosystem. The sheer amount of founders, developers, and investors concentrated in Singapore means that some of them will inevitably turn to building cryptocurrency ventures if they have not already.
Crypto’s success in Singapore has been a numbers game. The country is relying far too much on its existing lead in technology. The abundance of top-level government support for large-scale, crypto- and blockchain-specific policies and initiatives is just not happening in Singapore to the extent that it is in other countries. Perhaps both public and private leaders in Singapore will pioneer these initiatives once they realize the one major hidden advantage that the nation has vis-à-vis other countries: The country is small.
The reason that countries like the Philippines and South Korea need to cordon off a cryptohub in a remote part of the country is that it would be impractical for the entire nation to adopt crypto-friendly practices for both businesses and consumers. Singapore, in sharp contrast, is geographically dense. At only 721 sq. km, Singapore is even far smaller than planned Korean cryptohub Jeju Island, which measures 1,849 sq. km.
But what may be detrimental for Singapore’s home buyers can be a boon for its bid to be a cryptohub. This density makes it easier to roll out the infrastructure necessary to support crypto innovation and economy. According to Coin ATM Radar, for example, there are currently 10 crypto ATMs operating in the country, including units from Numoni, Tembusu, and Bitcoin Exchange. At any given time, a person is never far from one in Singapore, but he would have to intentionally seek a given machine out.
Given Singapore’s size, it would be easy for local and international crypto ATM manufacturers to accelerate their rollout, so the grid of available machines could rival those belonging to banks. A person could then run into one by just walking in a particular direction. The utility for crypto buyers would be great, but the statement for Singapore would be even greater: Crypto is everywhere in the country. The clustering of crypto ATMs would benefit all the manufacturers, as the nation could be known as the place where crypto can be easily purchased.
Once people have crypto, they would need places to spend them. Teaching retailers how to process transactions natively would be difficult—there is not only a high technical threshold, but it’s impractical for the type of high volume a cryptohub should aim for. Singapore should thus turn to an out-of-the-box solution.
One prominent example is from Pundi X, an Indonesian company that is currently deploying 100,000 of its XPOS devices worldwide. These devices enable retailers to accept crypto payments via the Pundi XPASS card.
The government could perhaps offer subsidies or other incentives to retailers that offer cryptocurrency payment via a system like Pundi X’s. Such a simple policy would benefit all stakeholders. Retailers would see a rise in revenue from consumers eager to spend cryptocurrency in-store. Consumers would get an opportunity to finally use their cryptocurrency at real-world locations, rather than random e-commerce stores.
To create a faucet for digital currency, so more local Singaporeans have funds to spend at crypto-enabled stores, there should be a drive to encourage more people to mine. While the stereotype of mining operations are big box warehouses located in remote provincial areas, many people do mine cryptocurrency in urban areas. These living room and bedroom miners are usually powered by China’s Bitmain, whose various miners can mine different coins, such as Bitcoin, Litecoin, and Dash. There are some companies in Singapore, such as Singapore Crypto Mining, which can also host mining rigs. Whether people opt for a do-it-yourself solution like Bitmain or a turnkey solution like Singapore Crypto Mining is both beneficial: The more crypto there is in circulation, the more people will use it like an actual currency.
The biggest benefit of developing Singapore’s crypto infrastructure would be for the country as a whole. If Singapore were to build out its network of crypto ATMs, retail locations that accept crypto, and mining operations, the country would quickly become known as a regional hub for digital currency. This branding would attract the next generation of crypto companies. If firms like Numoni, Tembusu, Bitcoin Exchange, Pundi X, Bitmain, and Singapore Crypto Mining built the underlying infrastructure, other companies would want to build atop this foundation, offering crypto-related products and services to Singaporeans, who already own cryptocurrency and routinely transact with it.
In time, the country would be the ultimate crypto sandbox - companies could launch products in the space and have them immediately tested by hundreds of thousands of people. This selling point is a considerable advantage over countries building out cryptohubs. Why would companies, after all, want to operate in the remote parts of a nation when they could just as easily decide to thrive at the centre of one of Asia’s financial capitals?