Text/Yin Ning
Produced by/Gyro Research Institute
In the fierce global competition for Web3, Singapore, known as the Garden City, is undoubtedly the most eye-catching one.
With a population of only 728.6 square kilometers and a population of 5.68 million, Singapore has distinguished itself in the Web3 field in just a few years by virtue of its excellent geographical advantages and stable and open business environment, and is on a par with the United States.
In the Web3 migration caused by China's heavy attack on the encryption field last year, the Chinese have uniformly targeted Singapore, which has both cultural circles and innovative atmosphere. Well-known capital, leading institutions, and top talents have continued to pour in. Under the spotlight of the world, Singapore's Web3 development is shining with hope.
However, consistent with its consistent positioning, Singapore, nicknamed a small country with few people, seems to prefer to exist as a global Web3 node.
Key nodes participate in the division of labor, and Singapore creates a miracle of opening up
From a global map, Singapore is like a diamond, located at the southern tip of the Malay Peninsula. It is adjacent to Malaysia across the Strait of Johor to the north, and faces Indonesia across the Singapore Strait to the south. It is in the strategic area of the Pacific and Indian Oceans, and sits at the southern mouth of the Strait of Malacca. The geographical conditions are very favorable and it has the natural advantage of becoming a large land port. However, compared with its strong geographical advantages, Singapore is narrow and long. In terms of land area, Singapore is only 728.6 square kilometers. Its area is even slightly smaller than Shanghai, China. This also means that its strategic depth is poor and it is highly dependent on neighboring mainland countries. high. For this typical small island country, export-oriented economy is undoubtedly the top priority.
Looking back on the development history of Singapore, its curve overtaking also started here. During the British era, Singapore mainly relied on its port advantages to establish itself in the re-export trade and resource export industries. Before 1959, 75% of Singapore's national income came from re-export trade activities. On August 9, 1965, after successively experiencing the turbulent autonomy phase and the conflict-ridden merger of Singapore and Malaysia, Singapore officially declared its founding. At that time, Singapore, a third world country with a population of less than 2 million people, quickly embarked on a journey of rapid development. The road to integration into globalization that is outward-looking and open. Since then, Singapore has established two paths: industrial undertaking and financial opening. It has not only set up the Economic Development Bureau to lobby around the world to attract foreign investment through tax depression, industrial support and other means, but also liberalized foreign exchange controls and allowed the free flow of funds in Singapore. After the 1990s, globalization entered its heyday, and the international flow of economic factors such as capital, information, technology, and data increased rapidly. With the support of globalization, Singapore adhered to "small country big diplomacy" and became a key node in the international flow of factors. Participating in the international division of labor has further consolidated its role as a global free trade port and an Asian financial center. In 1965, when Lee Kuan Yew was Prime Minister, Singapore's GDP was US$975 million. By 1991, when Lee Kuan Yew resigned, Singapore's GDP had reached US$45.466 billion, a surge of nearly 47.5 times.
In its history of development, Singapore has completed fragmentation, separation, reform, reorganization, and transcendence, demonstrating its extremely strong development heritage and national resilience. In 2021, Singapore's GDP was US$396.854 billion, and its per capita GDP has reached US$72,800. Become a truly developed economy. At present, Singapore has achieved technology accumulation in petrochemicals, electronics, machinery manufacturing, biomedicine and other fields, and has occupied a place in high value-added areas of the industrial chain. According to data from the Singapore Economic Development Board (EDB), Singapore has 2,700 precision engineering companies and 300 semiconductor companies, manufacturing approximately 70% of the world's semiconductor wire bonding machines, 60% of microarrays, 35% of thermal cyclers and Mass spectrometers occupy approximately 30% of the global hearing aid market, 20% of semiconductor equipment, and 10% of the refrigeration compressor market.
In the Internet field, instead of actively seeking development, the market chose Singapore instead. Despite its overlay advantages of over 90% Internet penetration and a high consumption rate with an average shopping basket value (ABV) of up to US$52, as a small country with a population of only 6 million, it still cannot hide the problem of a small market.
In fact, the author once mentioned in "Japan's "Lost" Web3" that the development of the Internet requires the support of a vast local cultural market, and this point is also an important drawback of Japan's Internet development. Although it is also a small country with few people, Singapore still has unparalleled advantages over Japan. As the central country in Southeast Asia, Singapore has a prominent siphon effect. The local language is mainly English. Its cultural radiation can cover Southeast Asia and even the entire Asia-Pacific region. Its excellent location advantages and solid market system can also effectively make it a global player. Transfer of elements. Take Southeast Asia as an example. The population of Southeast Asia exceeds 650 million. The total population is only lower than that of China and India, and the market is vast. Therefore, although the fragmentation of the cultural market still results in Singapore's single breakthrough in Southeast Asia, Singapore has not been out of touch in the Internet era, and its development has always been at the forefront.
Reality also supports this argument. With a limited market size, not only five large international e-commerce platforms such as Lazada, Shopee, and Amazon are gathered in Singapore, but well-known companies such as Google, Facebook, Amazon, and Apple have all set up Asia-Pacific offices in Singapore. The regional headquarters is obviously not just targeting the small local market, but aims to use Singapore as an international test field to move to the vast market in Southeast Asia as a typical example.
In recent years, with the saturation and sinking of the Internet markets in China and the United States and the continuous rise of Southeast Asian economies, Singapore has become a hot spot for entrepreneurship in the development of the Internet. Successive innovators and passive transitioners have emerged in an endless stream. Well-known leading and innovative companies have stopped to hang out. , especially during the acceleration period of digital transformation after the epidemic, Singapore has made great progress. Taking the aforementioned e-commerce market as an example, according to data analysis company GlobalData, Singapore's e-commerce sales will reach S$7.8 billion (US$5.9 billion) in 2021 and are expected to grow by 18.3% in 2022, reaching S$9.2 billion (US$7 billion). , will rise to S$14.2 billion (US$10.7 billion) in 2025. The five-year e-commerce market will have a compound annual growth rate of 16.2%, with rapid development momentum.
Singapore and Web3, the harmonious integration of distributed economy
Looking back on its development, Singapore has always adhered to the integration of small countries, placing itself at a global leverage node, linking economic factors in the Asia-Pacific region and even the world, thereby achieving efficient allocation and circulation of factors. This distributed operation method coincides with the underlying logic of Web3. Web3, which only requires resource aggregation rather than spatial dependence, can develop like a duck in water in Singapore, which integrates an open environment, public awareness, and high-quality talents.
From the perspective of regulatory environment, distributed operation requires a highly open policy environment, and Web3, which is in a state of wild growth, emphasizes appropriate fault tolerance and innovation space.
In the field of encryption, Singapore also adheres to this principle. In 2019, it has launched the "Payment Services Act", which clarifies the license for digital tokens. Depending on the nature and scope of the service, payment service providers need to apply according to their respective circumstances. , apply for a "currency exchange" license, a "standard payment institution" license and a major payment institution license. Following this, in 2020, Singapore passed the "Crypto Offering Guidelines" and proposed the "Financial Industry Omnibus Bill", which basically laid the foundation for clear encryption licenses and responsibilities. In 2021, the Singapore government launched a SGD 12 million Singapore Blockchain Innovation Plan. So far, Singapore has become one of the most crypto-friendly regions in the world. The Monetary Authority of Singapore has begun to provide more inclusive green light supervision methods such as the enhanced version of the regulatory sandbox for areas such as DeFi. Even if the license license cannot be applied for, Certain payment services may be temporarily permitted under exemption regulations.
Driven by policies, Singapore's encryption field has sufficient public awareness and has developed rapidly in recent years. In September last year, the financial technology comparison website Finder.com conducted a survey of 40,645 adults in 22 countries. According to the survey results, nearly 16% of Singaporean adults own cryptocurrency, ranking sixth among 22 countries. From the perspective of cryptocurrency exchanges, there are more than 47 cryptocurrency exchanges in Singapore, covering many well-known local companies such as KuCoin, Vauld, Crypto.com, and leading blockchain institutions such as Coinbase, FTX, and Binance. Singapore serves as the headquarters center or R&D center in the Asia-Pacific region.
Especially in 2021, my country is cracking down on the cryptocurrency field with high pressure, and the original projects have invariably chosen Singapore, which has a closer cultural circle, abundant talents, and a more open atmosphere. Against this background, Singaporean venture capital institutions have also set off a wave of blockchain investment. According to a financial technology report released by KPMG, in 2021, there were 82 transactions in the cryptocurrency and blockchain fields in Singapore, totaling 1.48 billion. The U.S. dollar reached its highest level in history. In 2020, there were only 26 transactions in this field, totaling US$110 million. The amount increased nearly 14 times month-on-month, indicating rapid growth.
It is worth mentioning that, driven by the principle of entity empowerment, although typical crypto payments and investments have developed more prominently in Singapore, the country is actually a little low-key in the fields of public chains, DeFi, NFT, GameFi, etc., and no single individual has emerged. World-renowned applications in the field. But on the other hand, its use cases in blockchain and the real economy are remarkable . In the industrial direction, Singapore’s blockchain is used in areas such as risk management, privacy protection, supply chain, Puhui communications and finance, and DID. All are thriving locally. Take OpenCerts as an example. Although it is not well-known, as a Singapore government-level open source blockchain project, it provides a platform for issuing educational certificates. 18 local educational institutions in Singapore are included in it. It has become the first of its kind launched in the world so far. The largest related application in blockchain applications. The Ubin project launched in 2016 is a wholesale CBDC jointly researched and developed by the Financial Regulatory Authority of Singapore, the Association of Banks in Singapore and a number of international financial institutions to explore the practical application of distributed ledger technology in clearing and settlement. It has now developed to its third In the fifth stage, we begin to assess the impact of distributed ledgers on existing regulatory frameworks and market processes.
With geographical advantages, institutional arrangements, agglomeration of elements, and the emergence of supporting facilities, Singapore, which adheres to the spirit of a node, has already occupied an important place in the global Web3 in terms of industrial direction and encryption field in the interlocking development. It has also played an important role in digital assets, A corresponding balance point has been found between the virtual economy and physical empowerment, but it is not without challenges.
Amid internal and external troubles, Singapore’s Web3 still faces challenges
In an open encryption atmosphere, as far as Web3 companies currently developing in Singapore are concerned, most of them are entrepreneurs in the cryptocurrency industry who have retreated or fled due to domestic policies. Can be seen. In this context, the pursuit of profit will be more obvious. In the innovation model, short-term projects with faster return on investment, such as games and finance, are more inclined, and the business model is limited.
Secondly, investors are not attractive enough. The Southeast Asian market is relatively limited. At the same time, the capital market is not perfect. Although in the current development of Web3, the capital market is more focused on guidance and does not play a decisive role. However, the exit mechanism of the Southeast Asian market The lack still gives VCs pause. According to Finance Eleven, unlike Web3 companies in North America, which can reach tens of millions of dollars in single financing, the financing amount in Singapore may only range from tens to hundreds of thousands of dollars, showing two levels: high activity and low financing amount. status, and therefore more institutions hope that the project will issue coins as soon as possible to achieve income returns, further enhancing the short-term nature of the project.
From a macro perspective, although Singapore has abundant human capital, the Internet-related talent structure is not healthy. Although there are many domestic universities in Singapore and there are many high-quality talents, the degree of homogeneity is high. Due to the nature of the local economy, most of them focus on finance and management. Practical and business expansion talents are extremely scarce. At the same time, compared with the number of developers in China and India, which can easily exceed one million, Singapore obviously has insufficient successors. Its developer talents are basically imported from overseas, and overall it is still in a gap. According to the "2022 Global Blockchain Talent Report - Web 3.0 Direction" released by OKX and LinkedIn, as of June 2022, the United States, India, China, the United Kingdom and Singapore are the top 5 blockchain talent countries in the world, but Singapore talent The total growth rate is relatively high, and the number of blockchain job postings will increase exponentially in 2021, which is evident from the thirst for talent. But specifically, it is conservatively estimated that more than half of the talents in the blockchain field in Singapore are Chinese developers.
Entrepreneurs who defected from the Chinese Internet to the Singapore market by virtue of geographical and cultural proximity are still faced with the complexity of the business environment and the conflict between the two cultures. For example, in the equity setting, Singapore requires foreign companies to have at least one Singaporean director. However, traditional Chinese companies obviously do not want them to participate too much. In data exchange and exchange, Chinese companies have a result-oriented spirit. , Singaporean companies have also clearly expressed their distrust of it. In more typical work scenarios, the overtime culture is also an insurmountable gap between the two places. Chinese companies, especially Internet companies, have successively experienced hundreds of teams and shared competitions, and have become accustomed to iron-blooded horse racing in overcoming thorns and thorns. Enclose the land to capture the market as quickly as possible. But for Singapore, which entered the developed economy earlier and has always taken the lead in geo-economics, it pays attention to the quality of life and never works overtime on weekends. When Shopee’s overtime culture first emerged due to the influx of domestic Internet, a person known as the security captain even appeared to call for an end to overtime.
On the other hand, Singapore is also re-examining the financial risks posed by the crypto sector due to the debt spiral caused by this year’s crypto market crash. Due to the limited number of local participants, Singapore's previous supervision of the encryption field focused on money laundering and terrorist financing risks, but the Terra incident prompted it to start taking action on consumer protection. Recently, Ravi Menon, managing director of the Monetary Authority of Singapore, said that stricter rules will be adopted for retail crypto market participants, which may include customer suitability testing and restrictions on the use of leverage and credit instruments for cryptocurrency transactions. Recently, the Monetary Authority of Singapore established a "Centre of Excellence" dedicated to developing central bank digital currencies in order to seize potential control of online payments from cryptocurrency companies.
In addition, Dubai, New Zealand, the United Kingdom, Australia and even Vietnam, which have similar national conditions, are constantly introducing and breaking through the Web3 industry through opening up regulatory environments and improving technical infrastructure. Dubai, which is also open to encryption and has an excellent business environment, not only promulgated the Virtual Assets Law (VAL) in March this year and established the Virtual Assets Supervision Authority, Hamdan, Crown Prince and Chairman of the Executive Committee of Dubai, even recently launched the Metaverse strategy to actively build a world Web3 Capital, Dubai currently has more than 1,000 Yuanverse and blockchain companies.
Conclusion
Relying on its special geopolitics and its small-country-big diplomacy, Singapore has continued to forge ahead and has successfully transformed from an unknown small island country into an oasis of a global open economy. Today, with the blessing of economic openness, government transparency, and market freedom, Singapore, which has always been an important node in the global economy, is ready to develop in the distributed business economy led by Web3.
Although it still inevitably has internal compatibility issues and external challengers have never stopped, as Li Guoquan, vice chairman of the Singapore Economic Association (SEE) and professor at Singapore's Singapore University of Social Sciences, said, Web3 is domainless and boundaryless. Being stateless is undoubtedly highly consistent with the limited space and small territory of Singapore.
However, judging from various performances, Singapore does not intend to participate in the fierce global competition. It will always adhere to its positioning as a key node of global Web3 and concentrate its resources to build a stable, inclusive and diverse environment for innovation. As for the future, will slow Singapore move forward side by side with fast-paced Web3 to create the next node miracle?
Regardless of success or failure, Singapore will eventually ride on the spring breeze of Web3.
references:
Finance Eleven: Go to Singapore and harvest an era? ;
Chibenshe: Singapore’s sense of crisis;
Pinwan: Web 3 is the secret code for Chinese adventurers to meet in Singapore;
Babbitt: Dialogue with Li Guoquan - Why has Singapore become a global Web3 entrepreneurial node?
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