Private securities platform ADDX has become the first Singapore based financial firm in the city-state to recognise cryptocurrency in their assessment of assets of high-net worth clients.
Financial service firms are increasingly accepting digital currencies as they seek to attract a wide array of investors.
ADDX said they would value these assets to apply discount rates and would recognise only cryptocurrencies with a higher market value.
“Cryptocurrencies are here to stay. They no longer exist only on the fringes of wealth and investment conversations,” said ADDX CEO Oi-Yee Choo.
“With a large minority of investors owning crypto, it is reasonable for these digital assets to be recognised as a part of one’s portfolio – not unlike any other assets that can be valued in the marketplace, such as real estate or equity,” Choo said.
Under Singapore’s regulations, individuals need to have at least S$2 million in net personal assets to qualify as accredited investors and S$300,000 (US$217,991.57) of income from the past 1 year, S$1 million in net financial assets.
When calculating the value of these holdings, ADDX said it will accept crypto assets only in the category of net personal assets and will apply a 50 per cent discount rate for bitcoin or ether and a 10 per cent discount for USDC stable coin.
Many turned to cryptocurrencies during the COVID-19 pandemic. The overall crypto market is still valued at US$1.2 trillion although bitcoin’s value has recently fallen.
“In time to come, we are likely to enable customers to fund their investment wallets with cryptocurrencies and to convert their assets between fiat currencies and crypto,” said Choo.
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