Breaking New Ground

As with any industry where advancement and innovation are outpacing regulation, the complex landscape can be difficult for businesses to navigate their operations. From adapting to new realities in emerging industries such as Web3, evolving regulations, compliance and commitment to environmental, social, and governance (ESG), it is of great importance for businesses to keep updated on key trends and developments in order to remain internationally competitive.

Here are several key highlights:

ESG - Singapore will implement mandatory climate-related reporting requirements for listed and large non-listed companies, with obligations for some companies to begin disclosing in line with the IFRS’ International Sustainability Standards Board (ISSB) standards starting as early as 2025.
Metaverse - The rise in cryptocurrency payments in the metaverse indicates significant growth and opportunities in sectors such as gaming and e-commerce. However, there is a need for efficient and interoperable payment systems in the metaverse to prevent fragmentation and dominance by powerful private entities.
Digital assets - Project Aurum 2.0 aims to assess how privacy-enhancing technologies can affect the performance and compliance of a Central Bank Digital Currency (CBDC) system, seeking to strike a balance between privacy and transparency.
Emerging regulatory trends - Change remains a constant in risk, regulations and compliance. Discover the latest updates and stay informed about the outcome of the recent Financial Action Task Force (FATF) plenary and key developments.

Feel free to explore the topics below and we welcome any opportunity to discuss more with our respective PwC representatives.

Main drivers

Environmental, Social and Governance

Metaverse

Digital assets

Emerging regulatory trends

Environmental, Social and Governance (ESG)

Singapore will implement mandatory climate-related reporting requirements for listed and large non-listed companies, with obligations for some to begin disclosing in line with the IFRS’ ISSB standards starting as early as 2025. In other news, PwC has recently published insights post the Environmental Risk Management (ENRM) survey conducted across 50 financial institutions in Singapore, in reflecting on the industry's progress in operationalising the Monetary Authority of Singapore (MAS) ENRM Guidelines effective since June 2022.

Regulations and standards

Singapore to introduce mandatory climate reporting from 2025 in line with the IFRS’ ISSB standards
The specific obligations for each group will also be phased over time, with listed companies required to report on Scope 1 and 2 emissions in the first year, and Scope 3 (or value chain emissions) in 2026. Additionally, firms will also be required to obtain external limited assurance on their Scope 1 and 2 GHG emissions within a two-year time frame post their first reporting. Large non-listed companies will follow a similar timeline, although Scope 3 reporting will begin for these companies no earlier than 2029.

Malaysia launches consultation on adoption of IFRS sustainability reporting standards
The consultation follows the launch by the Malaysia Securities Commission of the Advisory Committee on sustainability reporting in 2023, aimed at facilitating the use of the ISSB standards in a new National Sustainability Reporting Framework for Malaysia, in addition to identifying and supporting other elements of the NSRF, including a framework for assurance and capacity building.

China stock exchanges announce mandatory sustainability reporting requirements for companies
According to the new guidelines released by the Chinese exchanges, reporting requirements for companies will encompass four core content topics, including governance, strategy, impact, risk and opportunity management, and indicators and goals. Mandatory reporting requirements will apply to larger companies, including those on the flagship Shenzhen 100, SSE 180 and Shanghai Science and Technology Innovation 50 index, as well as dual-listed companies with securities on both domestic and foreign markets.

Industry update

Asset management

AXA investment management to vote against companies lobbying against climate goals
The new policy comes amidst an intensifying political backlash against climate-related regulation, contrasting with the urgent need for effective policy intervention to enable a just and orderly transition, highlighting the importance of climate lobbying issues.

Goldman Sachs asset management launches global green bond exchange-traded fund (ETF)
The new ETF follows several years of growth in green bond issuance, as corporate and government issuers move to finance climate transition plans, and companies in hard-to-abate sectors invest in capital-intensive projects to meet decarbonisation commitments. In a recent report by Moody’s Investor Service, it has been reported that green bond issuances are projected to grow to $580 billion in 2024.

Banking and capital markets

Barclays ends direct financing for new oil and gas projects
Alongside its new energy policies, the British bank has also released a new transition finance framework, outlining its criteria for classifying financing to decarbonise high-emissions sectors as transition as part of its efforts to achieve its goal to facilitate $1 trillion in sustainable and transition finance by 2030.

Budget 2024: Green loans scheme extended, more sectors to be eligible for energy efficiency grant
More financing support will be provided to small and medium enterprises to adopt green solutions, in enabling Singapore businesses to access financing more easily across all stages of growth. Additionally, companies registered and operating in Singapore with at least 30% local shareholding, at least one local employee and group annual sales turnover of not more than $500 million will be eligible for support.

S&P forecasts $1 trillion sustainable bond issuance in 2024
According to a new report released, the issuance volumes of green, social, sustainability, and sustainability-linked bonds are expected to grow, with macroeconomic pressures offset by increased transparency, emerging market growth and demand for environmental and energy transition projects. The firm also expects new bond labels to take hold which can provide access to the sustainable finance market for issuers in sectors that may not qualify for green bond labels, but require financing for initiatives to reach climate and environmental goals.

Insurance

Leading by example: Shaping Singapore businesses and society through ESG: Rothman and Roman Group
A recent publication published by Rothman and Roman Group has highlighted key insights on ESG-related employee communication activities from 34 key players in the Singapore economy. The compilation brings together best practices on three topics: 1) education and knowledge sharing; 2) diversity, equity, inclusion (DEI) and social responsibility; and 3) sustainability and nature conservation, providing a platform for those who inspire beyond their organisations with their ideas, visions, and solutions.

Directors and officers liability coverage for DEI-related ESG claims
Companies increasingly have faced legal scrutiny as they push and promote DEI efforts, and exposure to employee claims and other types of liability. Where corporate directors and officers fail to take steps to end discrimination, or participate in it themselves, they may face potential litigation repurcussions. Following this, regulators are also increasingly more interested in the diverse leadership in ensuring adequate fiduciary oversight of corporations.

ESG platforms, solutions and tools

Morgan Stanley Capital International launches sustainability data reporting solution for private markets
The investment data and research provider has unveiled a new solution that enable companies to report their data to investors through a secure, digital hub, with the ability to approve or decline data requests from general partners and lenders directly on the platform. Companies will be able to conveniently search for and proactively provide data to institutions and market participants that are active on the hub.

Moody Investor Service rolls out a new scoring system of companies’ net zero transition plans
The credit ratings, research, and risk analysis provider announced the release of its first net zero assessment, a new scoring system aimed at enabling investors to evaluate and compare the decarbonization plans and actions of companies.

Interesting reads

Guest Post: Becoming an early adopter of Taskforce on Nature-related Financial Disclosures (TNFD) is the easy part, now the hard work begins
As shared by Laura Conigliaro, ESG reporting manager at Low Carbon, a renewable energy investment company, it has been pointed out that actions must be informed and directed by how businesses materially impact and depend on nature, including efforts by the firm to make a defining contribution to the historic effort to power the world with renewable energy. Being an early adopter of the TNFD, the firm shall be guided by leading best practice standards for businesses to explore, disclose, and provide transparency on their nature-related risks and opportunities, building the basis for effective action.

Singapore to require sustainable aviation fuel (SAF) use on all departing flights from 2026
Singapore Minister for Transport Chee Hong Tat announced the launch of the Singapore Sustainable Air Hub Blueprint, outlining a series of key actions aimed at decarbonising Singapore’s aviation sector, including new rules mandating that all departing flights be required to use SAF beginning at 1% from 2026, with an expected increase over the following years.

Contact us

Bing Yi Lee

Partner, Sustainability and Climate Change, PwC Singapore

+65 9782 6395

Email

Christina Mason

Partner, Asset and Wealth Management ESG, PwC Singapore

+65 9018 1559

Email

Metaverse

The metaverse is expected to continue moving towards mainstream adoption, with the potential to transform various industries and reshape how we interact with digital content and each other. Companies are recognising the potential of the metaverse and investing in virtual reality (VR) and augmented reality (AR) technologies, developing innovative solutions that engage with customers in new and immersive ways.

General market

Metaverse for healthcare market expected to reach almost $500B by 2033
A report by Spherical Insights suggests that the global metaverse healthcare market could exceed $496.23 billion by 2033. AR is emerging as a key driver, particularly in surgical applications, allowing surgeons to plan and navigate procedures with real-time information. As remote services become more prevalent, the usage of metaverse along with VR and AR is likely to play a crucial role in telemedicine, training courses, and patient onboarding.

The economic implications of services in the metaverse
The report issued by The Bank for International Settlements explores the impact of cryptocurrency payments in the metaverse. It suggests that to prevent the metaverse from becoming fragmented and controlled by powerful private entities, it will be necessary to implement interoperable payment technologies supported by regulation.

Meta Shapers 2024 outlook
The global community of thought leaders and industry specialists who are shaping the narrative around Web3 has issued a report discussing various technologies that have the potential to disrupt the future of work, including the metaverse, web3, non-fungible tokens, and artificial intelligence. The report highlight the key trends, highlights and predictions and outlook for the upcoming year.

Industry update

Financial sector

Circle and non-fungible token (NFT) driven game ‘Overdare’ collaborate on web3 wallets and USDC payouts
The collaboration between stablecoin issuer, Circle, and South Korean metaverse game, Overdare, will allow game developers to build in-game Web3 wallets and facilitate direct USDC payouts. Overdare offers a "Create-to-Earn" model, allowing players to monetise their creativity by crafting valuable digital assets and transforming them into NFTs. It aims to transform intellectual property and income management for players by using Circle's programmable wallets.

Apple's 'Vision Pro' set to get first cypto-focused metaverse app
Victoria VR, a blockchain-based VR developer, is set to release the first metaverse app on Apple's Vision Pro headset. The in-app currency is driven by its VR token which is based on Ethereum, and will reward its active users and stakers.

Strategic alliances

OKX, Crypto.com, and Halo become partners of the Mocaverse metaverse
As part of the strategic collaboration between the three firms, Animoca Brands' Mocaverse, a membership non-fungible token collection project, together with OKX Wallet, Crypto.com DeFi Wallet, and Halo Wallet will allow users to connect centralized finance platforms with Animoca's network of projects.

stc Bahrain pioneers Web3 infrastructure with Lionscraft partnership
The collaboration integrates the Bahrain's telecommunications capabilities into the blockchain industry, enabling the introduction of innovative products and services. The partnership was marked by a signing ceremony in the metaverse and the partnership agreement was deployed as a non-fungible token on the Avalanche network for transparency.

Industry use cases

Mumbai launches Metropolis metaverse to showcase city's infrastructure
The metaverse showcases the country's current and future projects, providing a comprehensive tour of Mumbai’s infrastructure improvements to its users. Users are provided with detailed information regarding a project's background, authority in charge and benefits. The metaverse highlights 12 important projects, such as the Mumbai-Ahmedabad Bullet Train Corridor and the Mumbai Metro which aims to improve the city's transportation system.

Google’s ARCore partners with Singapore Tourism Board (STB) to create AI-powered guided tours of the country
The AR guided tours are accessible through the Visit Singapore Travel Guide app, offering travelers a richer understanding of Singapore through immersive storytelling of tourism precincts, historical, cultural, and culinary experiences. STB aims to create novel experiences for visitors, and is seeking to work with more developers, creators, and brands globally in adopting Google’s AR tools to create helpful AR experiences and make the world their canvas.

Forbes dives into Metaverse with virtual estate in The Sandbox
The virtual estate will serve as a community hub for the Forbes Web3 community, fostering interaction, engagement, and collaboration. Forbes aims to offer interactive experiences, workshops, and events in the metaverse. To enhance user engagement, QR codes scattered throughout the estate lead users to gamified scavenger hunt experiences.

75% of nurse learners feel prepared by immersive VR simulation training: 2023 Nursing Simulation Survey conducted by UbiSim
The immersive nature of VR enhances the learning experience and preparedness of nurse learners. The survey suggests that nursing education programs may benefit from integrating VR technology as a cost effective option for scaling nursing education.

Investments

StatusPRO announced $20 million Series A funding round led by Google Ventures
The sports technology and gaming company specializes in using real-time player data to create authentic extended reality experiences for training and stimulations. The company aims to redefine the sports gaming world and explore other professional sports avenues and teams through VR technology. The funding will be used to develop new sports titles, enhance features and technology, and expand the company's presence in the sports VR market.

Metaverse platforms

Saudi Arabia introduces the world's first national cultural metaverse platform
The Saudi Heritage Metaverse platform, supported by the Generative Media Intelligence AI system, is a partnership with droppGroup and its 'Phygital' Metaverse using Hyperledger Fabric 2.5 blockchain technology. The platform offers cultural shows, performances, and games, providing a dynamic digital environment for users to experience various activities and attractions.

Meta Force completes upgrading of Uniteverse, Tactile, Boost and OverReal software modules to enhance metaverse platform
The leader in virtual reality and augmented reality aims to scale the community within the Web3 ecosystem and enhance the gaming environment in the GameFi industry, through upgrading of its existing software. Each software module serves specific functions and offers unique benefits to members, creating a decentralized metaverse for studying, living, and relaxing.

Gangwon 2024 has launched the first ever metaverse experience for Youth Olympic fans
The Gangwon-do Province metaverse will allow visitors an opportunity to meet and interact with other fans around the world as well as inspiring visitors to try new winter sports and learn about the Olympic values in a more immersive manner. Users are also able to create custom avatars for their digital experience, and enables fans to engage with the Youth Olympic Games in new and exciting ways.

Contact us

Yung Han Oei

Senior Manager, Metaverse, PwC Singapore

+65 9630 2458

Email

Digital assets

Digital assets, including cryptocurrencies and tokenised assets, are gaining wider acceptance and recognition for their potential benefits in terms of efficiency, transparency, and accessibility. Regulatory frameworks are evolving to ensure that appropriate guidelines and regulations are in place to facilitate international transactions and protect investors.

Industry update

General market

MetaMask collaborates with Robinhood to provide users with greater control and ownership over their crypto assets
MetaMask integrated Robinhood's fiat-crypto on-ramp as a service provider in its "Buy Crypto" feature, allowing MetaMask users to purchase digital assets using Robinhood's order flow. At the same time, Robinhood's account holders can fund and transfer their crypto assets to their MetaMask wallet. This allows for users to fund their crypto wallet without having to leave a decentralized platform, offering greater control and ownership.

Sygnum bank raises US$40m in funding led by global asset management group Azimut
The Swiss digital asset bank plans for further expansion into new markets, and used funds raised to expand Sygnum’s geographic reach into one market in the European Union and another in the Asia-Pacific in 2024. The funds will also be channelled to accelerate the development of its fully regulated products, such as its bank-to-bank platform that currently powers the crypto offerings of more than 15 banks and financial institutions globally.

Central Bank Digital Currency (CBDC)

The BIS Innovation Hub and Hong Kong Monetary Authority (HKMA) have launched Aurum 2.0, a project focused on building privacy features into CBDC systems
Project Aurum 2.0 will build on the existing Aurum prototype and involve collaboration with universities and privacy experts. It will explore privacy-enhancing technologies such as pseudonymization and zero knowledge proof, and test how increased privacy impacts system performance and compliance. The project's goal is to provide central banks with practical insights on designing CBDC systems that balance privacy and transparency.

Hong Kong launches wholesale Central Bank Digital Currency (wCBDC) platform under Project Ensemble
The project will test the functionality of a wCBDC and the movement of tokenised deposits. The goal is to develop an interoperable platform that can work with systems created by other central banks to increase efficiency, transparency, and inclusion in the monetary and financial systems.

Financial sector

Revolut has partnered with MetaMask to reveal a new on-ramp feature, Revolut Ramp
The feature aims to simplify the process of adding crypto to a self-custody wallet, where users can on-ramp within seconds and purchase new coins directly into their MetaMask wallets using their fiat currency balance or pay with their Visa or Mastercard bank cards. The partnership aims to make accessing crypto more convenient and less complicated, fostering broader adoption of cryptocurrencies.

Russia’s Alfa-Bank launches digital financial assets (DFA) offering
Alfa-Bank, the largest private bank in Russia, has announced the launch of the first DFA based on exchange-traded investment funds. The Evergreen Portfolio is a DFA combining exposure to stocks, bonds, gold and money market instruments.

Funding

Synnax secures $1 milion in pre-seed funding, introduces artificial intelligence (AI) credit intelligence
The fintech and IT solution aggregatore aims to address the lack of transparency and bias in existing credit rating systems by introducing the concept of credit intelligence. Their platform allows debt issuers to securely share data, which is then processed by a decentralized network of AI models to generate unbiased credit ratings and forward looking real-time credit intelligence.

Non-fungible tokens (NFTs)

Sony Bank unveils dual blockchain initiatives: non-fungible token integrated app and green finance security tokens
The Japanese commericial bank plans to incorporate NFTs and web3 entertainment rewards into its financial services through the Sony Bank CONNECT app. Additionally, the bank aims to issue green finance security tokens targeted at Japanese investors, with the funds being allocated to green projects focused on climate change, water, and biodiversity.

Key regulatory developments

South Korea plans crypto asset system to combat tax evasion
The national tax service has appointed Global Threat Intelligence Center to lead the development of a virtual asset management system, which aims to effectively analyse and manage transaction details to combat illegal activities such as money laundering. The system will streamline the analysis of virtual asset transactions and is expected to launch in 2025.

US Securities and Exchange Commission (SEC) defers ruling on spot BTC ETF options trading
The SEC has extended the response time regarding its decision for approving options trading on Bitcoin ETFs. The time extension gives the SEC an additional 45 days to consider the requests to provide for sufficient time to consider the proposed rule change.

OKX gets in-principle approval for payment institution license in Singapore
The global crypto exchange and web3 technology company has received an in-principle approval from MAS for its major payment institution license through local subsidiary, OKX SG. The approval paves the way for OKX to provide digital payment token and cross-border money transfer services in Singapore. The firm will also continue focusing efforts on its spot product and looking ahead, it aims to bring in local banking connections to its clientele and expand its offerings.

Hong Kong prepares sweeping rules to foil stealthy crypto purchases
As part of continuing efforts to prevent money laundering, terrorism financing, and fraudulent activities, the country is planning a crackdown on small shops that convert cash to cryptocurrency. Subsequently, the country is also aiming to introduce a licensing regime that will require crypto over-the-counter providers to collect customer records and increase monitoring for misconduct. However, the persistent challenge of regulating the crypto industry remains due to its decentralized nature and the presence of offshore exchanges and apps that operate outside government oversight.

Hong Kong's central bank starts regulatory sandbox for stablecoin issuers
The Hong Kong Monetary Authority (HKMA) has launched a regulatory sandbox to provide a testing environment for potential issuers of fiat-backed stablecoins, allowing issuers to develop and test their operations without facing penalties. The HKMA aims to use the sandbox to communicate supervisory expectations and gather feedback on proposed regulatory requirements for stablecoin issuers in the country.

Interesting reads

HashKey over-the-counter (OTC) secures in-principal license approval in Singapore
HashKey Technology Services, the OTC trading arm of HashKey Group, received in-principal approval on 28 February 2024 from the MAS for its major payments institution license application to provide digital fiat and crypto services.

Contact us

Wong Wanyi

FinTech Leader, PwC Singapore

+65 9842 2060

Email

Emerging regulatory trends

The world of anti-money laundering and combating the financing of terrorism is constantly evolving, with inter-governmental organizations like the FATF aiming towards establishing international standards to combat organized crime, corruption, and terrorism on a global scale.

Key regulatory developments

MAS consultation paper on proposals to simplify requirements and facilitate access to simple and cost-effective insurance products
The proposal seeks to promote the adoption of the Basic Financial Planning Guide, by enabling consumers to more easily purchase simple and cost-effective insurance policies, and narrowing insurance protection gaps in Singapore.

MAS consultation paper on proposed amendments to MAS investigative and other powers under the various acts
MAS has published the consultation response and the Financial Institutions (Miscellaneous Amendments) Bill was passed by parliament on 7 March. This Bill will enhance the supervisory and investigative powers of the MAS.

Industry developments

Financial Action Task Force plenary

FATF Plenary February 2024 - The Key Outcomes
Among the key outcomes of the Plenary is a new risk-based guidance for the implementation of Recommendation 25 on the beneficial ownership and transparency of legal arrangements.

FATF Recommendation 25: Beneficial ownership and transparency of legal arrangements
The FATF has updated its risk-based guidance as part of its ongoing efforts to improve global transparency and prevent the misuse of corporate structures and legal arrangements.

Jurisdictions under increased monitoring - 23 February 2024
Kenya and Namibia added to the "grey list", while Barbados, Gibraltar, Uganda and United Arab Emirates removed from the list of jurisdictions under increased monitoring.

February 2024 FATF Statement
FATF Statements assist financial institutions in their risk assessment and mitigation. Since October 2022, enhanced due diligence measures proportionate to risks arising from Myanmar are to be applied as per call for action by the FATF. This shall remain until its full action plan in addressing the strategic deficiencies in its AML/CFT regime has been completed.