KPMG: HK and Singapore's wealthy are considering investing in cryptocurrencies

Family offices and high-net-worth individuals in Hong Kong and Singapore are eager to invest in cryptocurrency or already maintain assets despite the recent bear market. Up to 58% of family offices and HNWI respondents to a recent study are already investing in digital assets, and 34% "intend to do so," according to a research titled "Investing in Digital Assets" published on October 24, 2022 by KPMG China and Aspen Digital. 30 family offices and HNWIs in Hong Kong and Singapore participated in the poll, with the majority of respondents managing assets between $10 million and $500 million.

According to KPMG, the significant adoption of cryptocurrencies by the ultra-wealthy has boosted industry confidence due to a rise in "mainstream institutional interest." Additionally, it was mentioned that institutions now have easier access to financial instruments involving digital assets, even regulated ones.

Assuring adherence to the financial authorities' view that crypto assets are not suitable for retail investors, Singapore's largest bank, DBS, announced in September that it was expanding crypto services on its digital exchange (DDEx) to approximately 100,000 wealth clients who meet the criteria around their income to be classified as accredited investors.

A cryptocurrency exchange by the name of Coinhako was one of the few businesses to be granted a licence by the Monetary Authority of Singapore (MAS) to provide services related to digital payment tokens in October 2022.

The majority allocate less than 5% of their portfolio to digital assets, mostly in the form of stablecoins, ether, and bitcoin, but the allocations are still rather minimal.

A barrier to investing in the industry, according to respondents, is market volatility, challenges with correct valuation, and a lack of regulatory certainty on digital assets. Since digital assets are still relatively new, FOs and HNWIs are still hesitant to participate in the market, especially in light of regulation and value. However, KMPG pointed out that the two nations' regulatory clarity may be improving.

According to reports, the Hong Kong securities regulator recently stated that it wanted to review the restrictions for present cryptocurrency trading and enable individual investors to make direct investments in digital assets. Diogo Mónica, co-founder and president of Anchorage Digital, stated earlier this month that Singapore was chosen as a "jump point" into the larger Asian market because of its robust regulatory framework.

The Monetary Authority of Singapore (MAS) has increased access to cryptocurrency trading for authorised investors, and numerous exchanges have received preliminary clearance to offer services related to digital payment tokens in the city-state.