Singapore has strategically positioned itself as a fintech hub, acting as the gateway to the Southeast Asian markets. Through a policy of innovation and digital acceleration, the country aims to strengthen its position in this sector to complement its rank as an international financial hub. With highly developed telecommunications infrastructures, a connected population, and a skilled workforce, it has a favorable environment for the adoption of fintech tools such as alternative finance, digital payments, and cryptocurrencies.
Digital payments
In Singapore, fintech development has been fueled partly by the rise of new payment options, a sector that accounts for the largest number of
fintech companies in the country. The nationwide digitization strategy, driven by the Monetary Authority of Singapore's vision of a connected society, has enabled the country to achieve the region's
highest average transaction value for digital payments. In the country, payment innovations build on an already well-established environment, with near-universal access to bank accounts and one of the highest credit card penetration rates in Asia. Super-apps such as Grab have boosted the use of mobile wallets, enabling global access to a multitude of everyday services with a single payment method. In addition, the Covid-19 pandemic has accelerated the development of e-commerce and the adoption of
cashless payments. The government is supporting payment innovation with initiatives such as PayNow, which facilitates money transfers through the collaboration of several banks, retailers and national financial institutions to send and receive funds between bank accounts and e-wallets instantly. A regional collaboration based on this system was also established in 2021 with Thailand between PayNow and PromptPay, the world's first real-time payment system coupling, enabling instant mobile transfers using only the recipient's phone number. More recently, in November 2023, the MAS and Bank Negara Malaysia (BNM) jointly launched the real-time payment system coupling between Singapore's PayNow and Malaysia's DuitNow. This type of initiative is expected to be expanded throughout Southeast Asia, which would avoid U.S. dollar conversions for transfers within the region.
Cryptocurrencies
Singapore is among the countries at the forefront of cryptocurrency adoption and innovation, especially regarding regulation and attraction of actors in the crypto and blockchain environment. These are among the sectors that dominate the local fintech scene in terms of
funding value. The Monetary Authority of Singapore (MAS) has taken a proactive approach in developing cryptocurrency-related activities, with regulatory rules to maintain control over the industry. Bitcoin and Ethereum remain the most prominent
cryptocurrencies held by Singaporeans who perceive them as an
investment asset or store of value rather than a means of daily payment. Singapore continues to lead regulatory efforts while maintaining the objective of supporting the development of stablecoins. These measures are part of an overall strategy to protect the public from these assets while encouraging the development of businesses in the sector. In sum, Singapore seeks to conciliate its ambitions to become a global fintech and cryptocurrency hub while maintaining control over its growth. In a dynamic and emerging sector that tends towards decentralization (web 3.0), the balanced management of a governmental control strategy will be crucial to continue attracting these actors.
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