Anchorage Digital co-founder and president Diogo Monica believes there is a huge opportunity for institutional investors in Asia, and on Oct. 5 the digital asset infrastructure provider announced a “major expansion” of its platform in the region..
Speaking to Cointelegraph, Monica said that the company chose Singapore as a “jump point” to the broader Asian market as the country has become a hub for cryptocurrency companies and has a strong regulatory environment. Anchorage is currently undergoing the application process with the Monetary Authority of Singapore (MAS), the city-state’s central bank.
“It’s about being in a regime that is crypto friendly and where companies want to do business. We are just institutional, institutions go to Singapore, so we follow suit.”
Nevertheless, Monica said she sees “tons of opportunity” in the cryptocurrency markets of Thailand, Indonesia, Japan, and South Korea.after speaking with regulators there, though he expects the company will need a more local presence.
“Right now our strategy is to be regulated in Singapore as it is recognized by all other regulators as a great location,” says Monica.adding that other regulators in the region have “very strict, but very clear rules, which is incredible.”
Anchorage provides infrastructure for financial institutions to use for digital asset custodyexchange, staking and other services related to Web3.
However, Monica said that Asian institutional investors have changed tune in their approach to crypto investments following the collapse of the Terra ecosystem.
He said that until recently Asia-based institutions were not concerned with asset safety, but tended to focus more on product features. Nevertheless, Following the collapse and consequent sluggishness of the cryptocurrency market, attention has shifted to regulation, risk management and business continuity.
“Now I have conversations about bankruptcy, and are your assets away from bankruptcy, and are they on your balance sheet? […] but a year ago, no one was asking me questions about bankruptcy. A year ago, everyone was asking me about DeFi and stuff like that.”
Monica says that Anchorage already has a team in Singapore and that clients from the region represent about 10% of its business. He sees that number expanding to 25% in the next 12 to 18 months..
He states that the bear market is a good time to get a foothold and build relationships with regulators, as it demonstrates your ability to attract well-established customers who are “not just tourists in space”.
“They see you as the leader, and they see you as the people who expanded and have conviction, even during the bear market.”
The most popular use case for crypto that Monica is witnessing in the region is cross-border remittances and lending.. He also mentioned that mining is a common use case, not only for Bitcoin (BTC), but also for companies that run proof-of-staking validators.
As for the future, he says that “some very large traditional companies” have been announced that will use their technology to offer their own services, along with a focus on stablecoins and the infrastructure component that will serve the use cases for those assets.
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