A recent KPMG survey (1) suggests that over 90% of family offices and high-net-worth individuals (HNWI) (2) are either interested in investing in the digital assets field or have already done so. This has led to speculation that Hong Kong and Singapore's wealthy elite are looking eagerly at digital assets.
Approximately 58% of the family offices and HNWI survey respondents are already investing in digital assets, and 34% have plans to do so (3) according to the October 24 research by KPMG China and Aspen Digital titled "Investing in Digital Assets." The poll sampled 30 family offices and HNWIs in Singapore and Hong Kong, with most respondents managing assets between $10 million and $500 million.
KPMG noted that institutions now have easier access to financial products involving digital assets, including regulated ones. The company also stated that the large crypto update among the ultra-wealthy has increased confidence in the sector and is motivated by the increase in mainstream institutional attention.
In September, DBS (4), the biggest bank in Singapore, announced the expansion of its cryptocurrency services on its digital exchange DDEx (5) for roughly 100,000 wealthy clients who met the requirements for being classified as accredited investors based on their income, ensuring compliance with the financial authorities and believing that crypto assets were not suitable for retail investors.
In October, crypto exchange Coinhako (6) announced that they were one of a select few businesses to receive a license from the Monetary Authority of Singapore (MAS) to provide Digital Payment Token Services.
The majority of their allocations for digital assets, which primarily consist of Bitcoin, Ether, and other stablecoins, are less than 5% of their overall portfolio, so the allocations are still rather minimal.
As digital assets are still relatively new and there is some uncertainty among FOs and HNWIs about investing in the sector, particularly regarding regulation and valuation, respondents cited the market volatility, difficulties in accurate valuation, and lack of regulatory clarity on digital assets as continuing to be a hurdle for investment in the sector.
According to KPMG, the legal clarity in the two nations may be improving, as evidenced by Singapore's planning to expand cryptocurrency rules and that all virtual asset service providers (VASPs) (7) in Hong Kong must submit license applications by March 2024.
Recently, Hong Kong's securities regulators also declared their desire to relax present regulations for cryptocurrency trading and permit individual investors to make direct investments in digital assets.
The Monetary Authority of Singapore (MAS) (8) has given preliminary clearance to several exchanges to offer digital payment token services in the city-state. The MAS has been extending cryptocurrency trading for authorized investors.
Diogo Monica, co-founder, and president of Anchorage Digital (9) stated that his company had picked Singapore as a jumping-off point into the larger Asian market due to the nation's robust regulatory environment.
Everything revolves around the crypto-friendly government, where businesses desire to conduct business, and institutions travel to Singapore for this precise reason.
