Singapore's SGX Not Listing Crypto Anytime Soon But City Still Warms to Digital Assets

Singapore's stock exchange, SGX, has declared that it has "no immediate plans" for crypto listings. But as the Little Red Dot vies to be a regional hub for the crypto industry, is SGX's stance souring Singapore's relationship with the industry?

SGX Says No (For Now)

On 9 July, SGX chief executive Loh Boon Chye said the bourse does not intend to allow cryptocurrency listings at the moment.

“I think for any new product launches, it’s important for this to have a sustainable ecosystem support,” he said. “That really means demand, that really means governance, that really means structure.”

Loh pointed towards the ecosystem being "not ready for such products in Singapore" as a reason for the decision.

However, SGX is not completely closed to the idea. “You never say never, as time evolves, and as the ecosystem comes together, we are always known to be the most innovative exchange or platform in the world,” he said.

Loh's revelation comes six months after Bitcoin ETFs were listed in the US. Since January, Bitcoin's price has hit its all-time high and has increased more than 35%.

US on Second Crypto ETF

Now all eyes are on the SEC to greenlight listings of Ethereum ETFs. Just this week, asset management firms?VanEck?and?21Shares?submitted amendments to their?Ethereum?ETF S-1 registrations with the SEC.

No US exchange launch date was mentioned in the filings but the amendments serve as the final stage of approvals required by the US regulator for the products to be listed.

But, Singapore remains adamant about not being involved in listing crypto ETPs.

ETFs Not Fool Proof

Attracting over $17 billion in assets under management, BlackRock has shown just how lucrative and popular its Bitcoin ETF is. Consequently, the likes of Hong Kong, the UK, and Thailand made similar moves in approving Bitcoin ETFs.

However, the success of crypto ETFs is not guaranteed. Debuting on 30 April, Hong Kong's?crypto ETFs?hit the market with a rather lacklustre start, reeling in just $12 million in trading volume, inflows paled in comparison to the US market's $4.6 billion first day of Bitcoin ETFs.

With daily inflows amounting to single-figure millions and outflows amounting to double-figure millions, Hong Kong's Bitcoin ETFs are still struggling to gain traction.

It's a similar story too in the UK, which saw its crypto ETP launch fall flat. “Pretty simple really. The LSE is very late to the party,”?HANetf co-founder and co-CEO Hector McNeil said.

“FCA retail ban means no local retail interest to underpin volumes either. Hopefully, it’s a foot in the door with the FCA and they change their approach to be more consistent with ‘complex ETPs’ like leverage ETPs where sophisticated retail can get access. If they did this it would create a deeper and healthy local market,” McNeil added.

Singapore Plays Safe

Singapore's reluctance to consider crypto ETFs reflects its cautious approach towards the industry rather than a complete dismissal.

Just this week, Singapore's DBS revealed that its has seen trading volume on its digital exchange boom this year.

Digital payment tokens on the DBS Digital Exchange (DDEx) in the first five months of 2024?tripled?over the same period last year. Active trading clients on the exchange grew by 36% while digital assets (assets under custody) on the platform increased by 80%.

DDEx CEO Lim Wee Kian said professional investors are "increasingly viewing digital assets as a legitimate part of their alternative portfolios" and that the platform will expand its products for these investors.

Last week, stablecoin issuer?Paxos?revealed that it picked DBS as its primary banking partner, which will provide cash management and custody services for Paxos' stablecoin reserves.

Paxos' choice of DBS is a strategic move that leverages the bank's reputation as a leader in banking innovation. "DBS is an ideal partner for Paxos as the company builds and launches cutting-edge, secure and regulated financial solutions," Paxos said.

Other signs of Singapore still warming to crypto came in the form of Singapore Member of Parliament (MP) for MacPherson, Tin Pei Ling,?who joined Singaporean digital payment token service provider, Metacomp.

"Sustainability being a critical global imperative, this exciting opportunity allows me to expand my work into green fintech. I am eager to contribute to the growth of sustainable finance by bridging traditional finance and digital assets," Tin?said in a post two weeks ago.

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