November 27, 2024
By Our Correspondent
Early next year, Singapore Gulf Bank intends to acquire a stablecoin payments company, positioning itself as the first institution in Asia to offer a stablecoin payment service by 2025.
To facilitate this acquisition, the bank plans to raise $50 million by selling 10 percent of its equity. Established in February 2024 by Singapore’s Whampoa Group and licensed in Bahrain, the bank aims to take a leading role in the digital payments sector and the stablecoin market. The bank has stated that this acquisition is aimed at bolstering its presence in the cryptocurrency and blockchain sectors, particularly as global interest in digital currencies, especially stablecoins, continues to grow in comparison to traditional fiat currencies like the U.S. dollar.
Reports indicate that Singapore Gulf Bank is currently in discussions with a Middle Eastern sovereign wealth fund and various other investors to secure the necessary capital. The funds raised will not only facilitate the purchase but also support the bank’s expansion initiatives, which include enhancing its payment infrastructure and launching new projects while attracting skilled professionals.
Singapore Gulf Bank views the acquisition of a stablecoin payments firm as a crucial element of its broader strategy to provide a diverse range of digital payment solutions to its clients. The bank aims to complete the acquisition by the first quarter of 2025, focusing on companies located in the Middle East or Europe.
The appeal of stablecoins is particularly pronounced at a time when there is a growing interest in stable and dependable cryptocurrency projects. Unlike other cryptocurrencies, stablecoins are pegged to fiat currencies, such as the U.S. dollar, which provides greater transparency and reduced volatility. Institutions like Thailand’s Siam Commercial Bank and Japan’s Mitsubishi UFJ Financial Group have initiated similar efforts to become providers of stablecoin solutions, reflecting the increasing demand for digital currency-backed services worldwide.
The Middle East and North Africa (MENA) region, despite accounting for only 7.5% of global cryptocurrency transactions, is rapidly emerging as a significant participant in the international crypto market. Notably, 93% of these transactions exceed $10,000, indicating that the region is attracting institutional investors to its decentralized financial platforms.
Bahrain and the United Arab Emirates (UAE) have spearheaded this initiative by establishing a regulatory framework that appeals to both investors and blockchain enterprises. As the global financial landscape shifts towards digitalization, Singapore Gulf Bank is positioning itself to capitalize on this trend. The clarity provided by stablecoins and the broader cryptocurrency ecosystem is conducive to fostering growth and innovation.
