ADDX, a Singapore-based private securities platform, announced that it is the first financial institution in Singapore to analyse the assets of high net-worth clients in cryptocurrency.
The move exemplifies the growing acceptance of digital currencies by financial services organisations seeking to attract various investors.
ADDX, which Singapore Exchange backs, announced on Wednesday that it will only recognise cryptocurrencies with a higher market value and use discount rates when evaluating these assets.
“Cryptocurrencies will continue to exist. They are no longer excluded from wealth and investment dialogues, “said ADDX CEO Oi-Yee Choo.
“With a big minority of investors holding crypto, it is reasonable for these digital assets to be recognised as part of one’s portfolio, similar to traditional marketable assets like real estate and stocks,” Choo added.
To qualify as an accredited investor in Singapore, a person must have a 12-month income of at least S$3,00,000 ($217,991.57), S$1 million in net financial assets, or S$2 million in net personal assets.
ADDX stated it will only accept crypto assets in the category of net personal assets and will apply a discount rate of 50 per cent for bitcoin or ether and 10 per cent for USDC stable coin when evaluating the value of these holdings.
Previously viewed as a niche asset for risk-seeking investors, cryptocurrencies gained popularity during the Covid-19 pandemic. Despite the recent decline in bitcoin’s value, the entire crypto industry is worth $1.2 trillion.
Choo stated that soon, customers will be able to fund their investment wallets with cryptocurrencies and convert their assets between fiat and cryptocurrencies.
(US $1 = 1.3762 Singapore dollars)