In a first for Singapore, Bizkey, a payments processing firm, has facilitated the first car purchase using cryptocurrency.
While cryptocurrencies continue in a prolonged bear market, there is no doubt that the adoption has been steadily growing across the globe.
Residents of Singapore can now purchase a car and make payment with cryptocurrencies. David Lau, a businessman based in the South-east Asian country became the first resident to buy a car using Ethereum (ETH).
The development was reported earlier on Thursday by Business Insider.
Buying a Car with Crypto
Lau drove off in an $84,000 Honda Vezel, paying the equivalent of $10,000 in ETH upfront. The customer will shell out an additional $32,000 in ETH over many weeks. The remaining amount has been financed with a bank loan.
The car was purchased from MHG Cars, a Singapore-based dealer. The firm becomes the first auto dealership in Singapore to accept payments in cryptocurrency.
Lydia Ang, director of MHG Cars, said:
It does make us stand out from other dealers in the automotive industry. Being able to be the first car dealer that offers this payment mode shows that we have taken a step ahead of our competitors.
Transaction Powered by Bizkey
The deal was facilitated by Bizkey, a cryptocurrency payment solution provider based in Singapore. The firm collects payments in digital currencies and pays out the merchants in cash.
A couple of months back, Bizkey ran a promotional event called “Token Day”, a three-week campaign that enabled crypto payments at 30 shops and restaurants in the Chinatown area of the city.
Bizkey CEO Ken Huang stated:
We are excited to expand into large-scale payment applications. We are actively looking for partners in the luxury goods space, gold purchases, even real estate.
Mr. Chia Hock Lai, President of the Singapore Fintech Association, also spoke about the development:
Transactions using cryptocurrency outside of investment are not common here, especially for such large amounts. It’s sometimes used for purchases at cafes or eateries, but even then, it’s uncommon in Singapore.
Currently, less than 100 merchants in Singapore accept crypto payments. Scalability issues and longer confirmation times for crypto payments with Bitcoin and Ethereum have been a deterrent for the widespread adoption by small merchants like grocery stores.
However, for more significant transactions, adoption by merchants can mean lower processing fees. Bizkey charged 1% for its service, while the typical credit card fee is around 2-3%.
Singapore’s Parliament is working on new crypto regulations, and the Monetary Authority of Singapore is reported to be working on a licensing system. The Payment Services Bill will empower MAS to regulate crypto-based payment services.
It’s good to have regulation. A regulated market is more trusted and standardized, which is good for adoption of cryptocurrency for payment purposes. We hope to work with MAS to obtain the first batch of licenses.
What are your thoughts on this development in Singapore? Let us know in the comments below.
Images courtesy of Flickr/frankieleon, AdobeStock