Cryptocurrency is one of the major topics that analysts and investors have been talking about for the last few years. In the last 5–6 years, the rise of cryptocurrencies has been dramatic, with lots of ups and downs that even experts were not expecting. Singapore is one of the major nations outside the US that has incorporated virtual currencies for payment or transaction purposes. Crypto investing is so huge in Singapore that the IRAS had to regulate and build a separate set of tax guidelines for the businesses using cryptocurrencies for transaction and investment purposes.
Things to Know About these Digital Currencies
Bitcoin is the most popular name in this world of cryptocurrencies, but there are similar currencies that investors are buying, trading, and using. If you look at a graph of the rise and fall of Bitcoin price, you may regret not having invested five years ago. It has grown from $0.05 to current selling prices of around $9,000 in only seven years, but the market is volatile. For example, it can rise 500% in two days and drop down by 1000% in the next three days; it is that unstable. But the good news is Singapore has adapted to this volatility, and there are major financial institutes and investors that are investing, buying, and storing these currencies and reaping huge profits.
Virtual currencies, cryptocurrencies, and digital currencies are referred to as the same by many people, but in reality, there are differences between these three. If you are interested in investing in these currencies in Singapore, you need to understand the differences.
While virtual currencies are unregulated and mostly controlled by their developers, digital currencies are created using blockchain technology, a digital ledger, if you will. Digital currencies are similar to traditional currencies but not recognized as legal tender. Cryptocurrencies are subsets of digital currencies that use, for security reasons, cryptography. Though these are not issued by any central authority, it is highly difficult to counterfeit these coins.
In Singapore, Bitcoin is the dominant player in this world of digital currencies, and as it is a global one, it is accepted by most businesses. The second most accepted in Singapore is Litecoin, which is also a globally used crypto.
Currency Regulation in Singapore
In the year 2014, the Monetary Authority of Singapore (MAS) started working on the management of these currencies to reduce the risks of money laundering and financing of terrorist activities. Singapore is the first country in the world to regulate these currencies without putting any barrier in its growth.
In Singapore, the virtual currency exchanges are not authorized as they don’t need any license to execute their operation in the country; however, GST is applied to the transactions done with these currencies. It is in Singapore, which got the first ATM for Bitcoin, where one can change Bitcoin for real coins and cash.
Though there are various cases of theft and money laundering with these coins, with proper regulation, Singapore has become one of the most sought out places for investing and dealing in virtual currencies. With sound knowledge and analytical skills, investing in these currencies can be a worthwhile pursuit, provided you can manage your investments properly.
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Featured image: DepositPhotos © AndreyPopov
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