Coinbase wins crypto licence in Singapore

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Coinbase co-founder and CEO Brian Armstrong. | Photo by Steven Ferdman/Getty Images

Coinbase, the world’s second-largest crypto exchange cofounded by billionaire Brian Armstrong, has been granted permission to operate in Singapore as the city-state seeks to strengthen its position as an Asian digital asset hub.

The Nasdaq-listed company announced on Tuesday its Singapore unit had received in-principle approval from the Monetary Authority of Singapore (MAS) to provide digital payment token services in the country.

“We see Singapore as a strategic market and a global hub for Web3 innovation,” Hassan Ahmed, Southeast Asia’s regional director at Coinbase, said in a statement. “This milestone further signals our commitment to advancing the local and regional crypto ecosystem.”

Singapore has stated its intention to become a fintech hub in Asia and quickly adopted a crypto licensing regime that attracted global leaders such as Crypto.com and Huobi to set up business units in the city-state. However, the recent collapse of Three Arrows Capital, a high-profile crypto hedge fund incorporated in Singapore, has highlighted the risks inherent to the crypto industry.

Following the liquidation of Three Arrows Capital, the MAS said it is considering making it harder for retail investors to trade crypto, including restrictions on their use of leverage. The plan was followed by the central bank’s move to require crypto firms to be licensed locally even if they only serve markets overseas and its ban on crypto advertising to the public.

The MAS has implemented a lengthy due diligence process when granting licenses for crypto players. Regulators have so far given less than 20 green lights to some 180 applicants since they implemented the licensing regime in January 2020. Among the recipients are Hodlnaut, the struggling crypto lender who was recently granted protection from creditors. Others include the brokerage arm of DBS Bank and exchange giant Crypto.com.

Calling the MAS a “lighthouse regulator for the region,” Coinbase said it has been expanding its presence in Singapore. The company has invested in more than 15 Singapore-based crypto startups over the past three years, and has built a team there to drive investment activity in the Asia-Pacific region.

Founded in 2012 in San Francisco, Coinbase said it’s now serving 103 million users across more than 100 countries. The company has recently followed the wider trend of other crypto businesses in reducing costs by laying off part of its workforce amid a downturn in the industry. It continues to be the world’s second-largest crypto exchange, processing $1.6 billion worth of spot trades of digital assets over a 24-hour period on Tuesday, according to tracker Coingecko.