HK and Singapore’s mega-rich look at crypto investments: KPMG

Hong Kong and Singapore’s wealthy elite appear to be eyeing digital assets with eagerness, following a new report from KPMG which suggests that over 90% of family offices and high net worth individuals (HNWIs) are interested in investing in digital assets or have already done it.

According to an October 24 report by KPMG China and Aspen Digital titled “Investing in Digital Assets,” as many as 58% of family office and HNWI respondents to a recent survey are already investing in digital assets, and 34% “plan to does.”

The survey took the pulse of 30 family offices and HNWIs in Hong Kong and Singapore, with most respondents managing assets between $10 million to $500 million.

KPMG said the large crypto uptake among the ultra-rich has boosted confidence in the sector, spurred by the rise in “mainstream institutional attention.”

It also noted that institutions also have more access to financial products for digital assets, including regulated products.

Singapore’s largest bank, DBS, announced in September that it is expanding crypto services on its digital exchange (DDEx) to approximately 100,000 high-net-worth clients who meet the criteria around their income to be classified as accredited investors, ensuring compliance with the financial authorities’ view that crypto. assets are not suitable for retail investors.

While crypto exchange Coinhako announced in October, they were among a small number of firms that received a license from the Monetary Authority of Singapore (MAS) to offer digital payment token services.

However, allocations remain relatively small, with most allocating less than 5% of their portfolio to digital assets – mainly in Bitcoin (BTC), Ether (ETH) and stablecoins.

Respondents cited market volatility and difficulties in accurate valuation and lack of regulatory clarity on digital assets continue to be a barrier to investment in the sector.

“As digital assets are fairly new, there is still some uncertainty among FOs and HNWIs about investing in the sector, particularly in terms of regulation and valuation,” the report’s authors wrote.

However, KMPG noted that regulatory clarity in the two countries may be changing for the better.

“For example, all virtual asset service providers (VASPs) in Hong Kong will have to apply for a license by March 2024. Singapore is also planning to expand its cryptocurrency regulations.”

Hong Kong’s securities regulator recently announced that it wants to allow retail investors to invest directly in virtual assets and reconsider current requirements for crypto trading.

Related: Coinbase gets in-principle approval for Singapore crypto license

The Monetary Authority of Singapore (MAS) has expanded crypto trading for accredited investors and several exchanges have received preliminary approval to offer digital payment token services in the city-state.

Earlier this month, Anchorage Digital co-founder and president Diogo Mónica said his company has chosen Singapore as a “jumping point” into the broader Asia market because the country has a strong regulatory environment.

“It’s about being in a regime that’s friendly to crypto and that companies want to do business in. We’re institutional only, institutions are going to Singapore, so we’re following.”