Diginex has launched a cryptocurrency exchange in Singapore, where it currently operates under a "temporary exemption" from licensing. The move comes ahead of its planned listing on Nasdaq, expected to take place this quarter.
Its Singapore exchange, EQUOS.io, would specialise in crypto derivatives trading and initially offer spot trading, with dated futures, options, and other derivative products to follow. The blockchain technology company added in a statement Thursday that the exchange was operating under an exemption in Singapore's Payment Services Act, and would be a "fair and transparent platform" for users.
It also would introduce an "easy to use" interface for retail investors as well as managed account features designed to improve collateralisation processes, amongst others.
Diginex CEO Richard Byworth said: "Our industry analysis has allowed us to understand the friction points for institutions to trade digital assets and address many of those with new and improved solutions around portfolio management."
The launch comes ahead of the company's planned merger with 8i Enterprises Acquisition, which is expected to be finalised in the third quarter and will see Diginex's listing on Nasdaq.
In its statement, the blockchain tech company added that it had applied for a Major Payment Institution licence in Singapore, where it currently operates under the temporary exemption.
The Monetary Authority of Singapore (MAS) earlier this year published a list of entities that had been exempted from holding a licence under the Payment Services Act, for specific payment services, and a period of either six or 12 months. This exemption would end after the specified period or if the entity applied for a licence.
While based in Hong Kong, Diginex chose to launch its cryptocurrency exchange in Singapore because of the latter's regulatory regime, Byworth said in a Reuters report. He described Singapore as "more flexible" in its views about cryptocurrency.
In January, the country's Senior Minister Tharman Shanmugaratnam said in parliament that the government believed crypto derivative products were not suitable for most retail investors because they did not have intrinsic value and were subject to volatile pricing due to speculation. He said this prompted MAS to regulate crypto derivative products that were listed and traded only on approved exchanges, which were subject to regulatory requirements and oversight.
Tharman noted: "But we do not extend the regulation of crypto derivative products beyond approved exchanges. This would confer misplaced confidence in these highly volatile products and lead to a wider offering of such products to retail investors. Our approach has worked so far as trading in crypto products in Singapore remains limited and only a small number of retail investors are involved."
He said MAS had instructed all financial institutions to comply with additional measures if they offered crypto products to retail investors, such as restrictions on advertisement. The minister had stressed that such measures did not apply to entities not regulated by MAS.
Singapore last November said it was exploring plans to allow payment token derivatives, such as Bitcoin and Ether, to be traded on local exchanges and for such activities to be regulated. The move aimed to address international investor interest in cryptocurrencies.
MAS in 2018 warned eight cryptocurrency exchanges against engaging in unauthorised trading, specifically, those involving securities or futures contracts. It also had repeatedly cautioned the public about the risks of cryptocurrencies and to understand the environment before investing in digital tokens, stressing that these were not recognised as legal tender and functioned in an unregulated environment.
Japan's messaging platform Line in July 2018 launched its cryptocurrency exchange, Bitbox, in Singapore, offering 30 cryptocurrencies including Bitcoin, Ethereum, and Litecoin.