Crypto exchange Coinbase has obtained a payment institution license from the Monetary Authority of Singapore.
Crypto exchange. Coinbase has obtained a payment institution license from the Monetary Authority of Singapore. Joining us now to discuss is Coinbase country director for Singapore, Hassan Ahmed, welcome Hassan. Hi, thank you for having me. Um So, OK, can you just first before we get into this? Like really simply what does this mean a payment license is just basically to operate an exchange in Singapore? Is this for retail institutional? Both if you could just explain in very simple terms what this actually means? Sure, happy to break it down. So as you mentioned, uh coin based subsidiary in Singapore has received a license from the Monetary Authority of Singapore. The technical name of the license is called a major payments institution license. And within that, there's a bunch of sleeves of services that you can offer. So this applies to both general fintech companies but also to crypto companies and for crypto companies, the specific service is called digital payment tokens which allows for buying and selling and trading of effectively crypto assets. So, uh we have uh received a full MP I license uh as of this week. Uh and that's been a long and uh interesting licensing journey for us uh over here locally. Well, so I just, just a couple more questions just to make sure everyone gets the facts straight here because like Queen Base already had a team in Singapore, right? So what were you guys doing there before? Um Were you just sort of working to get the license? Um if you could explain the kind of what's changed here? Sure. So we set up our office uh in Singapore about four years ago. And at that time, it was just a local entity and an employment uh entity for, for practical purposes. Uh in uh 2020 when the MS announced that they were um breaking ground on what's called as the Payment Services Act. Uh That's the form of the name of the legislation. Uh And within that, they would create a fit for purpose uh crypto licensing framework, that sort of um this is a few years ago. But if you uh might recall that actually started a little bit of a rush for many, many companies to go ahead and apply for the license. So we had already uh set up a shop in Singapore uh as intending to be our Asia hub. Uh And as we had uh started getting comfortable with the market, uh we saw the promise and the conviction um sort of in the market. And so we had applied for that license as well. Now, uh again, on a technical level uh once you applied for the license, you were operating there on an exempt basis. So it's on an as if basis that you would be regulated. So that did allow us to start offering our products and services right away uh for consumers for and, and for as well as for institutions. So, uh we have been operating on that basis in the market for a few years. Um But with this announcement and this uh licensing milestone today that effectively kind of cements our position in the market and allows us to take a much longer term view in terms of the services we want to offer and how we want to grow in this market and the ecosystem. So, OK, so just to be clear because like Singapore, this is basically a coin base operating in Singapore who are the target customers. Is it um it, it, it can can like other people all over the region use it or is it, is it basically geared towards Singapore retail, Singapore Institutional? Because my understanding is that the Singapore market is actually not that big, right? So um like who, who can, who can, who can trade on this exchange? Yeah, so, so the the um the license itself allows for products and services to be offered to, to really um kind of both domestic as well as cross border. Uh Today, we are offering services to the the local market that are uh for consumers and institutions that choose to be papered to uh coin based Singapore. So, on the consumer side of things, what really helps and unlocks is sort of the fiat rails. So we have a fiat on ramp in Singapore where consumers can top up their, their accounts with Sing Dollar using their local bank accounts and they can use things like sy pass in order to, you know, pass quickly and use real time payment rails uh for institutions, we have our uh kind of core institutional exchange product that's offered in Singapore. Uh So that's, you know, typically for uh you know, market makers, asset managers, uh institutions and businesses that are actively uh trading along with receiving cus custodial services uh over time. Uh you know, that uh license does allow us the flexibility and the breadth to do more. Uh But today we are operating on a domestic basis. Emily, also maybe just to add on to your point about, hey, uh Singapore is a, is a small market that was also uh you know, one of our initial inclinations when we had first started the journey. Uh But it's important to remember that coin that Singapore is a very important financial center as well. I think at this point, it's ranked sort of number three on uh some service uh after New York and London, especially what, what sort of happened in Africa. But there's been a lot of capital flows into Singapore. Uh the rate of like family office creation, I think has seven over the past few years. Um So a lot of that kind of wealth effect is now being kind of captured, uh you know, within Singapore as well. So even if the the the kind of core consumer base may not seem like it's, it's that much. Uh actually the number of uh wealthy and affluent individuals uh in Singapore has increased pretty rapidly, especially in the last few years. Coin base in the US has been pretty vocal about how difficult it's been to work with regulators. What was it like working with the Monetary Authority in Singapore? And I guess more specifically, how hard was it to get this license? Yeah, great question. The way I characterize it is that, you know, the MS really is a lighthouse regulator for the region. They're sort of tough but fair and collaborative. So as we went through the licensing journey, the way to maybe sort of think about it is there's a supervisory department that's in charge of making sure that license applicants are, you know, ticking all the boxes and you are at the level they expect. And there's the policy department that's thinking about the next wave of regulations that they want to want to bring into being. So because Crip is a new industry, actually, these two things are, you know, somewhat fluid at times and what our experience was that the MS is generally, you know, very open and collaborative with industry, they'll put out draft guidelines, they'll solicit industry feedback either directly or through industry trade associations and then they'll bake that into their thinking before they publish final guidelines. Of course, there's regulatory outcomes that they're wanting to achieve. There's certain maybe risks that are brightly. Uh But what we've seen is uh they, they, they are very, very open to input. Uh and a lot of like constructive industry dialogue happens along the way as well. How long did it take? So our licensing journey was long ish. It took us about two years from the point of application to getting to this point. But as I mentioned, we were operating on an exempt basis anyway. So it wasn't that um that, that challenging from a commercial and kind of an offering basis. I think it was just more that um you know, as we kind of went along, uh some of these uh kind of factors also changed, especially uh since it's the kind of post FDX. Uh and I think they were just more um sort of up level requirements that many industry applicants had to uh achieve along the way. And so I'm pleased to say that we were able to, to do that uh pretty comfortably. All right, Hassan, we gotta wrap it there. Thanks so much for joining us this morning and congratulations on the license. Wonderful. Thank you for having me. That was Coin base country director for Singapore. Hassan. Ahmed.