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A
willingness on the part of market participants to create a sustainable
ecosystem built on long strategic commitments has contributed to Singapore’s
status as one of the world’s most dynamic Web3 markets.

Market
Resilience Amid Industry Challenges

A
March 2025 report from the Singapore Fintech Foundation (Singapore: The Onchain
State) observed that the city-state’s Web3 landscape has weathered significant
challenges, including high-profile industry collapses and a broader market
downturn.

Regulatory
Framework and Government Initiatives

Regulatory
clarity offers a stable foundation for builders to launch ambitious projects,
while initiatives like the Payment Services Act and the MAS’s various sandbox
programmes underscore the government’s commitment to fostering innovation
without compromising consumer protection.

According
to the Henley crypto adoption index, Singapore is the most crypto-friendly country
in the world. The financial services regulator scores highly for balancing
innovation with compliance, making Singapore attractive for exchanges and
fintechs, and it has continued to strengthen its position through expanded
government-backed blockchain initiatives in green finance and cross-border
payments.

Institutional
Adoption and Market Structure

Other
factors that have contributed to Singapore’s growing
status as a Web3 hub include the willingness of its financial institutions to
adopt blockchain early and actively investigate tokenisation, digital bonds and
programmable money. This has created an ecosystem that doesn’t rely on retail
speculation but is instead fuelled by the strategic involvement of financial
institutions.

Industry
Perspectives on Singapore’s Success

So
what do Web3 companies
attribute Singapore’s success to? Earlier this month, digital asset technology
firm ChainUp was placed in the inaugural Singapore Top Fintech Companies 2026
list.

“Singapore
has emerged as a Web3 investment hub due to its clear and progressive
regulatory framework under the MAS, strong rule of law, political stability and
a well-developed financial ecosystem,” says the firm’s growth marketing
manager, Chan Kang.

“It also benefits from deep pools of institutional capital,
regional connectivity and a pro-innovation stance that gives Web3 companies
regulatory clarity without stifling growth.”

Regulation,
Legal Infrastructure and Market Development

Singapore’s
position as a Web3 hub reflects how regulation, legal infrastructure and market
development have progressed together. Clear, principles-based regulation and a
strong legal framework give founders and investors confidence
around custody, governance and enforceability, which supports long-term capital
and regulated business models.

This
sits alongside a stable financial system and a deep pool of talent across
finance, technology and compliance.

Exchange
and Platform Operator Views

“Together,
these factors have drawn a broad set of ecosystem participants to operate from
Singapore,” explains Gracie Lin, OKX’s Singapore CEO. “For an exchange like
ours, this matters because it places us within an ecosystem where builders,
infrastructure providers and investors are aligned on long-term development
within the financial system.”

Crypto.com
also made it onto the Singapore Top Fintech Companies 2026 list. The firm’s
general manager Singapore, Chin Tah Ang, is another who refers to regulatory
clarity and a consistent focus on balancing innovation with building trust and
consumer protection.

“For
Crypto.com, operating in markets with well-defined regulatory frameworks has
supported the sustainable growth of our company by signalling credibility and
providing certainty to our customers and institutional partners,” he says.

Compliance
Costs and Operational Challenges

One
of the challenges highlighted in the Singapore Fintech Foundation report was
the high cost of compliance, with some local companies reporting mixed
messaging regarding compliance expectations and the report authors noting that
applying for the digital payment token licence in order to be able to legally
offer services related to digital payment tokens is generally considered to be
a resource-intensive and expensive endeavour for Web3 companies.

In
addition, almost 60% of survey respondents said they had limited or no access
to banking services, while 43% did not have an account with a traditional bank
due to reservations around onboarding clients that deal with digital assets.

Banking
Access and Regulatory Burden

Kang
acknowledges that although regulatory clarity is a strength, Web3 companies in
Singapore do face higher compliance costs, especially around licensing, AML/KYT
and ongoing reporting.

“Access
to banking services can also be challenging for early-stage or non-licensed
Web3 firms, as banks remain cautious and selective, leading to longer
onboarding timelines and higher operational friction,” he says.

Areas
for Policy Refinement

Kang
says Singapore should continue refining proportionate, risk-based regulation;
improve bank-Web3 collaboration; and support infrastructure providers that
enhance compliance, security and transparency to strengthen its competitive
edge.

“Expanding
regulatory sandboxes, encouraging responsible stablecoin and tokenisation use
cases and nurturing local talent will further cement Singapore as Asia’s
leading Web3 innovation hub,” he adds.

Governance
Standards and Market Discipline

Web3
companies in Singapore are expected to invest consistently in governance,
security and custody as they scale. For OKX, that governance premium is part of
the business model: if you want customers to trust you with their assets, your
controls and culture need to justify that trust.

“Banks
here are generally supportive of the sector, though selective about who they
work with, which reinforces discipline across the ecosystem,” suggests Lin.
“The upside of this high bar is that the ecosystem is stronger, made up of
digital asset players focused on building lasting infrastructure.”

Next
Phase of Market Development

When
asked what steps Singapore should take to enhance its competitive advantage in
this area, she says the next phase is about taking what already works –
including tokenised funds, fixed income and other regulated digital asset
products – and making them everyday tools that treasurers, wealth managers and
institutions across Asia can use without treating them as something separate.

Interoperability
and Cross-Sector Collaboration

“An
important step is enabling closer collaboration between banks, payment networks
and exchanges like ours, so stablecoins and tokenised deposits function as
seamless financial plumbing for payments, collateral and settlement, rather
than operating on a separate digital payment token rail,” adds Lin.

“Expanding
regulated access points for investors also matters, so digital assets can be
approached as part of long-term allocation.”

Risk-Based
Oversight and Information Sharing

Engagement
through platforms such as the AML/CFT industry partnership has helped advance a
risk-based approach to managing digital asset activity according to Ang. This
model recognises that effective oversight is strengthened through information
sharing between regulators, financial institutions and industry participants,
particularly in cross-border and technology-driven sectors like digital assets.

Outlook
for Singapore’s Web3 Position

“Looking
ahead, Singapore’s competitive advantage lies in continuing to pair regulatory
robustness with interoperability across major global markets, supporting its
role as a credible base for Web3 activity in Asia,” he concludes. “We remain
committed to supporting policies that strengthen the integrity and long-term
development of the Web3 ecosystem.”

This article was written by Paul Golden at www.financemagnates.com.

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