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Joe Seunghyun Cho

Bitcoin's rise to $7,000 shows Singapore needs to get serious about cryptocurrencies

BY JOE SEUNGHYUN CHO

After breaching $6,500 for the first time a day earlier, Bitcoin prices surged as high as $7,350 in trading Thursday likely thanks to traders in Asia noticing the CME Group’s announcement.

CME Group said earlier this week that it plans to launch bitcoin futures in the fourth quarter, pending regulatory review.

In Singapore, progress on the cryptocurrency front appears to be keeping up with global demand.

Singapore making good progress
Regulators here are open to having initial coin offerings (ICOs) sold through a regulatory sandbox, said Sopnendu Mohanty, chief fintech officer at the Monetary Authority of Singapore (MAS), at a recent fintech event.

Cryptocurrencies can secure and providing a level of transparency. Transactions in them cannot be faked or reversed and there tend to be low fees, making it more reliable than conventional currency.

Their decentralised nature means they are available to everyone, where banks can be exclusive in who they will let open accounts.

Such is the opportunity that we see in cryptocurrencies that we are planning to do an ICO through LATTICE80, our Singapore-headquartered fintech hub, in 2018.

Whilst we are initially looking to offer to accredited investors only, the requirement of individual clearance prior to investment is optional for firms undertaking an ICO.

ICOs as an alternative asset class
As I laid out in my plans last month, we are seeing huge demand and opportunities in ICOs globally. It is changing the demographics of the whole finance industry.

We are seeing a clear need to offer a proper infrastructure to support a this new field of cryptoeconomics in Singapore and the region.

We would like to build a system where high net worth individuals (HNWIs) and institutions can participate under properly regulated systems and compliance mechanisms.

There is an opportunity for ICOs in Singapore to institutionalise this emerging asset class to offer a new alpha opportunity, with lower co-relation to existing assets in alternative asset portfolios, for institutional investors.

With correct regulatory frameworks in place, it could be a boon to Singapore’s position as a leading global financial hub.

A hard but rewarding balancing act
Whilst Singapore doesn't plan to regulate cryptocurrencies such as bitcoin, it will remain alert to money laundering and other potential risks stemming from their use, the head of the country's central bank said at the end of last month.

Amongst companies that have conducted an ICO in Singapore is TenX, which raised US$80 million in June.

Bitcoin’s total market capitalisation is now over $110 billion.

The value of bitcoin is expected to continue to increase, with some experts believing it will cross the $25,000 threshold within the next five years.

Singapore would do well to position itself to be a beneficiary of this growth, whilst not undermining regulatory integrity and consumer confidence and protection.

A balancing act that, if it gets right, will be well worth the effort.

The views expressed in this column are the author's own and do not necessarily reflect this publication's view, and this article is not edited by Singapore Business Review. The author was not remunerated for this article.

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Joe Seunghyun Cho

Joe Seunghyun Cho

Mr Joe Seunghyun Cho is the CEO at LATTICE80 & Co-founder and Chairman of Marvelstone Group. LATTICE80 is the World's Largest Fintech Hub located in Singapore and Marvelstone Group​ ​is a private investment group that develops and invests in growing businesses. With finance as its core strength, it also makes diversified investments in technology, real estate, infrastructure, energy and media. Headquartered in Singapore, the Marvelstone Group believes in the growth of Asia and seeks to be a cornerstone investor to bring forth positive development and social impact to local communities.

Mr Cho also sits on the committee for Singapore FinTech Association, a cross-industry non-profit platform to facilitate and support collaboration between all FinTech ecosystem participants and stakeholders. The Association plans to become an effective platform for members to engage with multiple stakeholders to find solutions to issues.

In his long investment career, Mr Cho has held various leadership positions from CEO of Yozma Ventures (including Managing Partner / Head of Private Equity of Yozma Group Asia) based out of Korea, to co-founding a hedge fund and asset management company.

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