In conversation with Sparrow’s Head of Trading: Bridging cryptocurrency and traditional finance
As cryptocurrency piques the interest of institutional players, we engaged in a conversation with Kok Wee Ang, Head of Trading at Sparrow, to discuss this interesting insight and how it can shape the future of digital assets in the city-state.
Specializing in product structuring and risk management, Kok Wee has two decades of experience in FX derivatives trading and brings with him a wealth of experience from Traditional Finance (TradFi). He made the move to the burgeoning digital assets sphere to be a part of an industry that will be responsible for transforming the financial sector.
What is your view of the cryptocurrency scene in Singapore?
Singapore demonstrated leadership when it passed the Payment Services (PS) Act in January 2019. This was directly responsible for attracting global cryptocurrency players who came in droves to set up shop here and applied for the coveted MAS-approved licenses. The government’s portrayal of itself as a cryptocurrency-friendly hub was logical. It would act as a lightning rod to attract investment capital and talent — aimed to eventually create a sustainable cryptocurrency ecosystem here.
How will regulations shape the cryptocurrency industry in Singapore?
Let’s fast forward to today — a few licenses have been granted while the majority continue to operate as license-exempt entities. Regulation will ultimately chart the course for the future development of digital assets businesses in Singapore.
Being a bona fide financial hub, Singapore can further enhance its position in this region by bridging cryptocurrency and TradFi opportunities. From this perspective, cryptocurrency has a long runway and possesses superior asymmetrical positive risk-reward opportunities.
Regulatory clarity within the framework of Singapore’s future government policies for this growing market would attract the world of TradFi investors, and the race is on to build a sturdy infrastructure to support growing institutional demand.
Why do you think cryptocurrency is a rising asset class gaining institutional adoption?
Investments, as well as intellectual capital, pouring into this industry fuel the frenetic pace of development and adoption. The underlying blockchain technology that forms the basis of digital assets is very compelling. I believe its application in a wide variety of ways including real estate, payments, and games will eventually provide an increasingly strong ecosystem that will underpin its intrinsic value.
Cryptocurrency may still be an enigma to many investors partly because the investment terrain is defined largely by non-TradFi players. In fact, due to its decentralized nature, it can be a disruptive force to challenge TradFi banking ways.
We will see more liquidity venues collectively provide deeper and more stable markets. Ideas drawn from the TradFi space will drive the demand for a plethora of institutional-grade products. Digital asset-based investments will become yet another viable asset class for institutional investors looking to diversify their portfolios.
Now, onto your personal work experience. What made your career transition from traditional finance to cryptocurrency with Sparrow a rewarding one?
I relish the opportunity to be part of this nascent digital asset space. In many ways, this is reminiscent of the gilded age of banking product innovation, where market conditions were conducive for financial institutions to be able to commoditize a myriad of investment products and bring them to market to meet burgeoning demand.
Importantly, the dynamic “can-do” spirit that Sparrow embodies allows me to leverage my experiences in TradFi to contribute to this exciting business of providing digital asset solutions to our clients.
As Head of Trading, I believe Sparrow is ready for the driven demand of institutional-grade products, as digital asset-based solutions become yet another viable asset class for institutional investors seeking to diversify their portfolios.
What is your advice for individuals who would like to start a career in the cryptocurrency industry?
If one is not cryptocurrency-native and would like to start a career in it, the best way to get acquainted with the ever-evolving ecosystem is to learn to navigate it. There are vast amounts of current online information from social media platforms and professional sites from which one can get a hold of valuable education as part of their career onboarding journey. Starting from the conversion of fiat into digital assets, one can then learn the best ways to deploy them across liquidity platforms and/or Defi protocols via wallets.
Keen to build the future of our financial markets just like Kok Wee? Find out more about the exciting roles we have!
Risk Warning on Digital Payment Token Services:
The Monetary Authority of Singapore (MAS) requires us to provide this risk warning to you as a customer of a Digital Payment Token (DPT) service provider. Before you pay your DPT service provider any money or DPT, you should be aware of the following.
1. Your DPT service provider is exempted by MAS from holding a licence to provide DPT services. Please note that you may not be able to recover all the money or DPTs you paid to your DPT service provider if your DPT service provider’s business fails.
2. You should not transact in the DPT if you are not familiar with this DPT. This includes how the DPT is created, and how the DPT you intend to transact is transferred or held by your DPT service provider.
3. You should be aware that the value of DPTs may fluctuate greatly. You should buy DPTs only if you are prepared to accept the risk of losing all of the money you put into such tokens.
4. You should be aware that your DPT service provider, as part of its licence to provide DPT services, may offer services related to DPTs which are promoted as having a stable value, commonly known as “stablecoin”.