There is a vintage watch shop in the Arcade building on Raffles Place. It has been around since the 1950s. The shop sells some of the original quartz watches. These watches were revolutionary in the 1970s.
Quartz watches were much more accurate than the mechanical watches. You could time sprints using wristwatches. Doctors could time experiments with precision.
The new product was cheaper and more efficient. By the mid-1970s, it was priced at US$3 instead of US$50.
Until the 1970s, most Singaporean households had only a single watch. It was so expensive. Most people tell time by looking at the clock tower or the mounted clock. This changed when Seiko opened one of the largest quartz watch factories in Singapore.
The Swiss watchmakers were angry with the Japanese quartz disruption. They lobbied for a ban on quartz watches.
In a curious twist, Raffles Place is now the site of a similar revolution. Singapore is now hosting crypto exchanges, and it has emerged as the centre of crypto exchanges.
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Crypto exchanges are online platforms that buy, sell and trade cryptocurrencies. They act like DHL or FedEx for crypto. One needs to go to a stock broker like Phillips Securities to buy shares. Crypto exchanges play a similar role.
In 2024, Singapore issued 13 crypto licenses. The city-state has stolen a march over Hong Kong, where crypto licenses are rarely issued.
Singapore has long been the fulcrum of Asian finance. Capital flows as smoothly as the Singapore Sling.
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But crypto has stirred the pot. Like the quartz watch, it threatens to disrupt traditional finance. Banks, like conventional watchmakers, look at it with dread. There have been moves to ban crypto in China.
Some crypto exchanges have collapsed due to weak regulations. In October 2022, FTX, led by Sam Bankman-Fried, went belly up. The customers’ money was used by the exchange owners for speculation.
Singapore’s crypto exchange market has flourished. The Monetary Authority of Singapore (MAS) has taken a balanced approach. It is stringent enough to weed out the bad actors. It is flexible enough to allow legitimate players to thrive.
Hong Kong has tough rules around asset custody and token listing. That may have made it less appealing to new crypto firms. Hong Kong has focused on initiatives like Bitcoin ETFs. Singapore has focused on crypto exchanges.
In 2024, global crypto trading volumes rose threefold. Singapore has cemented its status as an international hub for digital assets. Binance, Crypto.com, OKX and Coinhako have expanded their operations. They have catered to both retail and institutional investors.
Ripple, a crypto payments platform, launched a stablecoin (RLUUSD) in Singapore. It still awaits regulatory approval in the US.
The numbers tell a compelling story. In 2023, Singapore’s crypto trading volume grew by 47% and doubled in 2024. This trend was driven by regulatory clarity and a stampede of interest from family offices and hedge funds. Singapore’s crypto exchanges manage over $200 billion in assets.
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Traditional banks find themselves in a quandary. Like the Swiss watchmakers, banks recognise the inevitability of change. But, they are wary of its pace and implications. Crypto is like a quartz watch that tells the time, date, and your heart rate.
Quartz democratised timekeeping, and cryptocurrencies could play a similar role in finance. Blockchain technology is the backbone of cryptocurrencies. It offers cheaper cross-border payments, decentralised lending, and tokenised assets. It’s a game-changer that traditional finance seems aware of.
Singapore’s regulators have deftly walked the tightrope. MAS has introduced stringent licensing requirements. It ensures that only credible players operate within its borders. The Payment Services Act is a cornerstone of Singapore’s crypto regulation. It has been updated to address risks like money laundering and fraud.
Institutional players are jumping on the crypto bandwagon. Temasek and GIC, Singapore’s sovereign wealth funds, have delved into blockchain ventures. DBS is planning to offer crypto options and structured products. This signals a shift from scepticism to cautious optimism.
Singapore has blended tradition and innovation. Even the best Swiss watch can’t tick forever without a little quartz-like ingenuity.
Nirgunan Tiruchelvam is head of consumer and internet at Aletheia Capital and author of Investing in the Covid Era
