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Singapore continues to be a thriving hotpot for the cryptocurrency state, and new reports suggest that the Monetary Authority of Singapore (MAS), the de facto central banking institution of the city-state, could allow for cryptocurrency-based derivatives to trade on approved platforms.
Singapore’s financial regulator proposes letting crypto-token derivatives to list and trade on approved domestic exchanges https://t.co/3e2iwj5Z3F
— Bloomberg (@business) November 20, 2019
Earlier today, the financial regulator published a consultation paper, in which it sought to approve “payment token derivatives” for listing and trading on “approved exchanges” based in the country, under the provisions of its Securities and Futures Act (SFA).
Allowing for More Crypto Financial Products
Currently, the city-state has four approved exchange platforms; Asia Pacific Exchange, ICE Futures Singapore, Singapore Exchange Derivatives Trading, and the Singapore Exchange Securities Trading Limited. However, the SFA currently doesn’t categorize payment tokens like Ether and Bitcoin as underlying assets. The consultation paper, which the MAS claims to have been drawn up due to increasing demand from institutional investors who would like to make their entry into the crypto space, seeks to change all of that.
The consultation paper will remain under review for the time being, with December 20 set as the deadline for submissions of any feedback from interested parties.
Bakkt Gearing Up to Lead the Market
The demand for cryptocurrency derivatives and other financial products surely seems to be surging Bakkt, popular crypto investment platform, launched physically-delivered Bitcoin futures contracts back in September, and while adoption was slow at the start (due in no small part to the drop in cryptocurrency prices that also coincided with the period), numbers are doing much better. Today alone, data for the Intercontinental Exchange (ICE, the parent company for Bakkt) show that over 160 contracts have been sold, with the last contract holding a value of $ 8,125.
∙ Today's volume so far: 1141 BTC ($9.30)
∙ Last traded price: $8,150
∙ Trading day progress: 50%
∙ Current daily Bakktarget™: 1503 BTC ($12,245,783)
— Bakkt Volume Bot (@BakktBot) November 20, 2019
Bakkt is also reportedly working on expanding its product offering, as company COO Adam White revealed at the Invest: NYC conference on November 12 that they are working on offering a cash-settled contract, which will serve as a complement to the Bitcoin contracts.
Citing unnamed sources who are familiar with the project, industry news medium CoinDesk revealed that the cash-settled monthly Bitcoin futures would be offered through ICE Clear Singapore, the Singapore-based clearinghouse owned by the ICE, and also traded on the ICE Futures Singapore exchange.
The sources also added that the ICE is currently talking with the MAS over the details and how the products can be launched and made available in the country, although a more realistic launch date has been pegged for the end of 2019.
Singapore Integrating Traditional and Cryptocurrency Industries
The city-state also has one bit to encourage cryptocurrency-related investment initiatives. On November 13, global banking giant HSBC announced that it had partnered with investment firm Temasek and the Singapore Exchange (SGX) to issue fixed income securities via blockchain technology.
Per the announcement, the project will help to streamline the bond issuance process and reduce all the costs associated with the process by using smart contracts and tokenize contracts. HSBC pointed out that while fixed income markets across Asia have continued to grow, there has been a consistent inefficiency with bond issuance and servicing, as there is no singular platform that provides tracking tools and information sharing throughout the life of a bond.
Thus, the new platform will use tokenized securities and smart contracts to enhance interactions between bond arrangers, investors, and asset custodians.