Singapore-based banks see post-pandemic Bitcoin adoption as more than just speculation

Why buy Bitcoin if not to simply speculate on its near-decade track record of wild upward volatility? That’s the question many peripherally interested in Bitcoin ask, and it’s always interesting when large financial organizations not entrenched in the crypto sphere chime in on the issue. Singapore-based banks DBS and Sygnum have touched on it some in recent reports…

A recent report on cryptocurrencies out of DBS bank speaks to recent trends in all digital currencies, and notes the recent pandemic has “added fuel to” the broader move toward digital currencies.

Yet, this year is shaping up to be a landmark in the history of digital finance. The ongoing pandemic has added fuel to the move toward a society with less cash dependence.

New technological frontiers of payment and settlement at the individual level are opening up. Private digital currencies have proliferated, with profound implications for money supply and storage of value.

The bank’s chief economist, Taimur Baig, spoke more specifically about a legitimization of Bitcoin as a safe-haven investment in an interview with CoinDesk.

“Pre-pandemic demand was largely speculative. People saw Bitcoin had a spectacular run [in 2017] and wanted to be part of that game, so what’s wrong with putting in 1% of assets under management [into Bitcoin]?,” Baig said in an interview with CoinDesk. “But I think post-pandemic it is beyond speculative. It’s more about, ‘This thing has fixed circulation, it will not be debased.’ People are worried about dollar outflow and wondering if they should hold crypto in addition to gold as a safe-haven currency.”

Singapore-based digital asset bank Sygnum, agrees, at least if you believe their PR on the matter.

“Since the outbreak of COVID-19 there has been increased interest from family offices and private individuals who see digital assets as an alternative and a way to protect against a worrying inflation risk,” Martin Burgherr, co-head of clients at Sygnum Bank, told CoinDesk.

Why are we hearing from Singapore?

Certainly big banks across the world are chiming in — and jumping in — on Bitcoin and cryptocurrency as a technology, but it’s not surprising that banks in Singapore are some of the most vocal on the topic.

As the Taylor Vinters Via law firm notes on Lexology, Singapore has had one of the most progressive stances on Bitcoin and cryptocurrency in Asia:

As this digital currency has gained momentum, Singapore has emerged as a key hub in Asia with its welcoming attitude towards emerging technologies such as cryptocurrencies and blockchain.

Singapore also introduced the Payment Services Act last year, which will offer one of the most stable regulatory environments for crypto entities in the world:

Singapore has [introduced] the Payment Services Act 2019 (PS Act)… Once it comes into force, it will also provide a stable regulatory licensing and operating framework for cryptocurrency entities… This contrasts with other countries in Asia, such as India and China, who have banned cryptocurrencies and/or Initial Coin Offerings or where there is significant regulatory uncertainty.

(via CoinDesk)