KPMG reports surge in Singapore crypto investments

KPMG’s ‘Pulse of Fintech’ report highlights the strong growth in Singapore’s crypto markets. According to the latest report, “Singapore has seen a tenfold increase in crypto-related investments last year worth $1.48 billion, up from $110 million in 2020,” and this surge is expected to continue.

Government support

It is true that the city-state has for some time been recognised as a cryptocurrency hub, with over $1.48 billion in investment completed in 2021 alone. KPMG suggests that this growth is “in part due to government efforts to stimulate the capital market.” One of the actions it has taken is the establishment of a special-purpose acquisition company (SPAC) listing framework that positions Singapore as the best location for firms that are growing fast, as well as unicorns, wishing to go public.

Currently, regulators are making decisive efforts to regulate what they see as speculative digital assets. However, KPMG believes that that this will not hamper Singapore’s crypto investments, and that they will continue to grow this year.

Singapore crypto market changes from services to software

Whilst it is true that in January, Singapore’s central bank ordered cryptocurrency businesses to stop advertising their services to the public, and a significant number of firms have been refused the crypto licenses needed to operate a regulated cryptocurrency business in Singapore, KPMG forecasts that growth will continue because “the majority of cryptocurrency and blockchain investments last year were focused on software and underlying infrastructure rather than services.” Indeed, this sector now accounts for a third of the total fintech investment in Singapore, which rose to $3.94 billion last year , according to KPMG.

Asia-Pacific region going strong

Another highlight of the report is that the Asia-Pacific region is doing well in general. The region saw fintech investments hit a record high of $27.5 billion in 2021, with total funding surpassing $17.4 billion in the second half alone (compared to $11.5 billion in 2020). Furthermore, in 2021, venture capital funding rose to $19.6 billion from $11.5 billion in 2020.

KPMG’s trends to watch out for in 2022

Although KPMG reports cover all world regions, these are its predictions for 2022 in the Asia-Pacific region – ASPAC:

  • Singapore growing on the radar of companies looking for a base from which to expand outside of the Asia-Pacific region;
  • growing investment from Asia-Pacific based countries into developing regions, including the Middle East, Africa, and Southeast Asia;
  • continued growth of embedded finance, including banking and insurance.
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