Singapore-based private securities platform ADDX said it has become the first financial firm in the city-state to recognize cryptocurrency in their assessment of wealthy clients’ assets.
The move underscores the growing adoption of digital currencies among financial services firms as they seek to tap into a wide range of investors.
ADDX, whose lenders include the Singapore Exchange, said in a statement Wednesday that it would only recognize higher-market cryptocurrencies and apply discount rates when valuing these assets.
“Cryptocurrencies are here to stay. They no longer just exist on the fringe of conversations about wealth and investment,” said Oi-Yee Choo, CEO of ADDX.
“With a large minority of investors owning crypto, it is reasonable for these digital assets to be recognized as part of one’s portfolio — no different from other assets that can be valued in the market, such as real estate or stocks,” Choo said. †
Under Singapore regulations, individuals must have at least S$300,000 ($217,991.57) in past 12-month income, S$1 million in net financial assets, or S$2 million in net personal assets to qualify as an accredited investors.
ADDX said it will only accept crypto assets in the net personal wealth category and will apply a 50 percent discount to bitcoin or ether when calculating the value of these assets and a 10 percent discount to USDC stable coins.
Cryptocurrencies – once seen as a niche asset for risk-hungry investors – became more popular during the COVID-19 pandemic. Although the value of bitcoin has recently fallen, the total crypto market is still valued at $1.2 trillion.
“In the coming time, we will likely enable clients to fund their investment portfolios with cryptocurrencies and convert their assets between fiat currencies and crypto,” Choo said.