A Bloomberg report reveals, Singapore Gulf Bank, a crypto-focused financial institution launched earlier this year, is set to acquire a stablecoin payment company, according to a Bloomberg report on 25 November.
Sources close to the deal, who chose to remain anonymous, stated that the funds from this acquisition would be channelled into enhancing the bank’s payment infrastructure, accelerating product development, and expanding its workforce.
This move positions the bank as a key player in integrating cryptocurrency with traditional banking, as it gears up to serve customers by the end of 2024.
Stablecoin acquisition targets growth in the crypto payment sector
The identity of the stablecoin payment company Singapore Gulf Bank plans to acquire remains undisclosed.
This acquisition is expected to strengthen the bank’s position in the cryptocurrency payments sector, a burgeoning field as stablecoins gain traction among financial institutions globally.
The bank is also reportedly in talks with a Middle Eastern sovereign wealth fund and private investors, seeking to sell an equity stake of less than 10% by Q1 2025 to secure additional capital.
Stablecoins have become increasingly popular in banking due to their value stability, being pegged to fiat currencies such as the US dollar.
Prominent players like Thailand’s Siam Commercial Bank and Japan’s Mitsubishi UFJ Financial Group have already ventured into stablecoin projects, highlighting the growing appeal of this asset class in global finance.
Singapore Gulf Bank’s dual focus
Founded in February 2024 by Singapore’s multi-family office Whampoa Group and licensed in Bahrain, Singapore Gulf Bank offers a unique platform that combines traditional finance and cryptocurrency services.
The startup is backed by the sovereign wealth fund Bahrain Mumtalakat Holding Co and the Whampoa Group, positioning it at the intersection of legacy banking and blockchain innovation.
The bank’s hybrid model aligns with its broader strategy to attract both traditional and crypto-savvy customers.
By incorporating stablecoin capabilities, the institution aims to create a seamless payment network that bridges conventional banking and decentralised finance.
Regulatory tailwinds for stablecoins in Singapore and beyond
Singapore’s regulatory landscape is playing a crucial role in shaping the adoption of stablecoins.
The Monetary Authority of Singapore (MAS) recently finalised its framework for single-currency stablecoins tied to the Singapore dollar or G10 currencies.
This framework applies to non-bank issuers with stablecoin reserves exceeding SGD 5 million (USD 3.57 million).
The regulations mandate issuers to meet stringent criteria, including maintaining value stability, ensuring capital adequacy, facilitating redemption at par value, and disclosing audit results to users.
Only issuers adhering to these guidelines can attain the coveted “MAS-regulated stablecoin” status, setting a high bar for compliance and investor protection.
Middle Eastern nations, including Bahrain, Dubai, and Abu Dhabi, are also vying to establish themselves as crypto hubs with supportive regulations.
Bahrain, in particular, has positioned itself as a pioneer in integrating crypto within its financial sector, creating a competitive ecosystem for blockchain enterprises.
Regional competition
The Middle East’s proactive stance on blockchain and cryptocurrency offers fertile ground for innovation.
Countries like Bahrain and the UAE are leveraging their regulatory clarity to attract investments in the stablecoin and crypto sectors.
Singapore Gulf Bank’s acquisition strategy fits well within this competitive environment, reflecting a broader trend of banks worldwide aligning themselves with blockchain technology to stay ahead of the curve.
As the global banking landscape evolves, the integration of stablecoins presents both opportunities and challenges.
Singapore Gulf Bank’s forthcoming acquisition is not just a strategic move for its growth but also an indicator of the growing synergy between traditional finance and decentralised assets.
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