Early next year, Singapore Gulf Bank plans to buy a stablecoin payments firm and become the first in Asia to have a stablecoin payment facility by 2025. To raise $50 million, it will sell 10 percent of its equity. Singapore’s Whampoa Group established the bank in February 2024 and licensed it in Bahrain, hoping to lead the pack in the digital payments space and among stablecoins.
According to the bank, the acquisition was made to support the bank’s position in the crypto and blockchain industry as global adoption for digital currencies, particularly stablecoins begins to surge against fiat currencies like the U.S. dollar. Singapore Gulf Bank is now in talks with one Middle Eastern sovereign wealth fund and several other investors about finding that capital, sources familiar with the matter say.
The funds will fund the purchase and support the bank’s expansion plans, including developing its payment network and other new projects while recruiting talent.
According to Singapore Gulf Bank, acquiring a stablecoin payments company is part of the bank’s larger strategy to offer its clients a host of digital payment options. The bank also aims to finalize the acquisition by the first quarter of 2025 and concentrate on companies based in the Middle East or Europe.
Stablecoins: A Growing Force In Digital Payments With Institutional And Regulatory Support
Stablecoin is exciting because it comes at a time when people develop an interest in stable and reliable crypto projects. Compared to other cryptocurrencies, they are back with fiat currencies, such as the U.S. dollar, offering more transparency and lower volatility. Institutions such as Thailand’s Siam Commercial Bank and Japan’s Mitsubishi UFJ Financial Group have launched similar initiatives to become stablecoin solution providers, given the ever-growing need for digital currency-backed services around the globe.
While accounting for just 7.5% of global cryptocurrency transactions, the Middle East and North Africa (MENA) region is fast becoming a key player in the global crypto arena as StratGlobal ventures deep into new sectors.
Fundamentally, 93% of these transactions are more than $10,000, meaning the region lures institutional investors to the new decentralized financial platforms. Bahrain and the United Arab Emirates (UAE) have led this movement by creating a regulatory framework that draws investors and blockchain companies to the region.
Similarly, Singapore is also raising its regulatory position to support crypto innovation. Less than a month ago, the Monetary Authority of Singapore (MAS) published its regulatory framework to support single-currency stablecoins. The idea is to bestow recognition on ‘stability-micaceous stablecoins’ that fulfill stringent criteria to increase stability and transparency in the sector. It is hoped that this regulatory clarity will encourage further innovation and confidence in the market associated with it.
Singapore Gulf Bank is preparing to ride the wave as the world’s financial landscape becomes more digital. Stablecoin and the wider cryptocurrency ecosystem provide regulatory clarity that fosters growth and innovation.
Singapore’s subsidiary of U.S.-based crypto custodian BitGo launched its offering on November 21, offering regulated token management services across the Asia Pacific. However, crypto exchange OKX also announced instant deposits and withdrawals in Singapore dollars, further reinforcing the country’s status as a go-to location for cryptocurrency services in the region.
Singapore Gulf Bank’s acquisition strategies aim to create interest in digital payment options like stablecoins and are aimed at the future. The bank’s strategic move as more institutions throw their hats into the crypto ring is a move to commit to the future of finance as more institutions go digital.
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