Crypto exchange Coinbase announced on Oct. 1, 2023, that it had secured a Major Payment Institution (MPI) license from Singapore’s monetary authority, MAS. The new approval, which comes one year after the exchange’s first in-principle approval in the country, will allow Coinbase to extend its digital payment token services to Singapore citizens and institutions.
The MAS stipulates that MPI-licensed companies have the green light to provide payment services without being constrained by transaction limits of $2.2 million. Additionally, the companies are exempt from the monthly transaction limit of $4.4 million for two or more payment services, as long as they don’t involve money-changing services or e-money account issuance.
Coinbase, in its release, stated that the new license isn’t just about operations but also a commitment to the expanding Web3 and cryptocurrency communities in Singapore. The exchange has been actively tailoring its products and services for the Singaporean market. In March, it launched FAST and PayNow bank transfers, features aimed at making transactions faster and more convenient.
It also integrated with Singpass, the nation’s digital identity tool, to simplify the user-registration process. Along with this, Coinbase has been working with major regional blockchain companies such as Infura, Blockdaemon and Nansen.ai to develop new versions of its existing products, such as wallet-as-a-service and Base blockchain.
Singapore has become a hub for digital asset companies, attracting businesses not only from the United States but also from countries such as India and China. In fact, 32% of Singaporeans either currently possess cryptocurrency or have in the past, according to poll data cited by Coinbase, making it a crucial market for the company.
However, a string of failures at cryptocurrency companies last year, including 3AC, tempered interest in the sector. Singapore’s investment company, Temasek, even reduced payment to the team that recommended a $270 million investment in the now-defunct FTX exchange.
Major crypto companies have been obtaining the MPI license lately. Blockchain.com was authorized as the 12th company in August 2023, while Circle, the issuer of the USD Coin (USDC) stablecoin, received its license in June, following Crypto.com.
Back in 2020, around 180 companies applied for the license under the new government.
The MAS announced in August that it intended to implement measures that would make it more challenging for retail investors to trade crypto at a time when they appear to be irrationally unaware of the hazards involved. It stated that it only issues licenses to crypto companies if they have strong antimoney laundering measures and that the majority of applicants have not been successful.
As major exchanges, such as Coinbase, expand their footprint to major markets such as Singapore, there is likely to be a positive trickledown effect that could act as a tailwind for other actors in the industry such as Canaan Inc. (NASDAQ: CAN) as the popularity of cryptos grows.
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