Singapore’s Blockchain Ecosystem - An Industry Report
Why Are Countries Competing to Attract Blockchain and Crypto Industry?
According to the IMDA’s Future Of Services report, the blockchain market in Singapore has the potential to achieve a market spending of up to US$272 million in 2022 and up to US$2.6 billion by 2030 with a compound annual growth rate of 32.5%.
Similarly, Gartner predicts that blockchain’s business value-add will grow to slightly over US$360 billion by 2026 globally, then surge to more than US$3.1 trillion by 20304. In the longer term, projections indicate that the global blockchain market is expected to grow from US$212 million 2016 to US$8,683 million by the end of 2024, at a compound annual growth rate (CAGR) of 59.04%. Overall, the potential value creation from blockchain technology will be immense, such that countries around the world such as Singapore, Malta, Hong Kong, Switzerland, and more have committed to embracing blockchain companies –– and to a lesser extent cryptoassets.
What is the Singapore Ecosystem Blockchain Report?
ConsenSys examined the blockchain innovation landscape in Singapore across three broad domains—finance, healthcare, and smart solutions. The report explores various case studies in each domain to illustrate how blockchain is being used to create value. For example, licensed securities exchanges in Singapore are using blockchain to create liquidity in the private markets.
As companies refrain from public offerings to pursue longer private life cycles, the need for capital efficiency and liquidity in private markets also becomes more pressing. Harnessing big data in the public sector has enormous potential, too. Decentralized patient records on the blockchain can offer greater security against data breaches, as well as faster processing of insurance benefit claims. The research offers three key insights.
Read the full Singapore Ecosystem Blockchain Report.
Key Insights from the Report:
1. Singapore’s Regulatory Environment is Primed for Blockchain Experimentation
Singapore has maintained a regulatory environment that has been consistently pro-enterprise and supportive of emerging technologies like blockchain. For over a decade, Singapore has ranked among the top three countries on the World Bank’s Ease of Doing Business Index. Generous government grants exist to encourage companies to adopt new technology and expand globally. The Singapore Government also launched the Smart Nation Initiative in 2014 to create solutions that will change the country using infocomm technologies, networks, and big data.
Additionally, the Monetary Authority of Singapore (MAS) actively encourages experimentation by partnering with private industry in experimenting with cross-border payments using blockchain and distributed ledger technology. As early as 2016, the MAS established a regulatory sandbox to enable Financial Institutions (FIs) and other companies startups to experiment with innovative Fintech solutions in an environment where actual products or services can be offered to users within a well-defined space and duration.
Innovators in the regulatory sandbox stand to enjoy relaxed regulatory requirements which they would otherwise be subject to. Singapore’s transparent, open and forward-looking regulatory strategy of “running alongside innovators” balances the need for regulatory oversight while embracing the upsides technological advancement.
2. Blockchain as a Value Creation Mechanism
There are three broad ways in which using blockchain can create value. Firstly, blockchain’s distributed ledger allows for different stakeholders in a value chain to participate, and interact on a shared ledger. For instance, hospitals and insurance companies can have access to a common database of patient records to verify, and instantly process insurance claims. Second, as organizations create and store more transactional data in digital form, blockchain technologies’ ability to maintain transaction histories can provide performance information on everything from product inventories to counterparty risk in debt markets.
The ability for marketplaces to monitor themselves opens new possibilities for reducing risk and identifying performance gaps. Lastly, blockchains can be used to further enable the fractional ownership of assets deeper and more extensively than what traditional capital markets have been able to do.
3. How Enterprises and Organization are Collaborating to Utilize Blockchain
Collaborations are the key to competitiveness in two ways. Firstly, blockchains can allow better vertical integration between different firms within any given value chain, as in the case of logistics. Horizontal collaborations also allow competitors to more easily transact with each other like in the case of trade finance. Secondly, collaborations between incumbents and newcomers are gaining popularity. Contrary to the early expectations of many blockchain enthusiasts, incumbent firms in each sector today are more receptive towards adopting new technology to avoid disruption.
Large banks, as well as private companies are looking for ways to partner with solutions providers to improve their operational efficiency through the use of blockchain technology. Established firms provide market access and a testbed for smaller, emerging innovators. These partnerships are critical for both incumbents to stay competitive, as well as for new tech companies to gain market traction.
Read the full Singapore Ecosystem Blockchain Report.
This report is a product of ConsenSys with external contributions. The findings, interpretations, and conclusions expressed in this publication do not necessarily reflect the views of Temasek, Infocomm Media Development Authority (IMDA) and Monetary Authority of Singapore (MAS) or their respective affiliates. Research leverages multiple public sources as well as interviews to provide an outlook on the Singapore blockchain ecosystem in 2019. This report is intended for general guidance and information purposes only. This report is under no circumstances intended to be used or considered as financial or investment advice, a recommendation or an offer to sell, or a solicitation of any offer to buy any securities or other form of financial asset. The information contained in this report may be subject to changes without prior notice. We are under no obligation to update or correct the information included in this report. This report is provided on an “as is” basis. ConsenSys, Temasek, the IMDA and the MAS and their respective affiliates make no representation or warranty, either expressed or implied, as to the accuracy or completeness of the information in the report and shall not be liable for any loss (direct or indirect) arising from or otherwise in connection with the use of this report or its contents. The contents of this report are not to be construed as legal, business, investment or tax advice. Each recipient should consult with its legal, business, investment and tax advisers as to legal, business, investment and tax advice.