David Lau, a business development manager, based in Singapore made a first-of-its-kind payment at a car dealership with Ethereum.
The 27-year-old man paid half the cost of his $84,000 Honda Vezel using the digital currency Ethereum.
Lau has been investing in cryptocurrencies for over two years and will be paying for the rest of the amount using a bank loan.
Details of the Transaction
The car Lau is buying is worth $84,000 for which he made an upfront deposit payment of $10,000 using Ethereum (ETH) coins.
He will be making another payment of $32,000 for the car using Ethereum in the upcoming three weeks. The other half of his car payment will be done with a bank loan.
Lau is a cryptocurrency believer who has invested in crypto for two years.
He has bought this car for his father and suggests that “it’s a good way to let go of these assets.”
His first investment in cryptocurrency was $500 in 2018, and he now has about $50,000 worth of crypto in his portfolio.
He wasn’t shy to admit that he was “riding on the hype” of digital assets when he started investing.
President of the Singapore Fintech Association and chairman of the Token Economy Association Chia Hock Lai was surprised with the payment and called it a “one-off” transaction. Chia believes that crypto payments are not commonplace in Singapore.
Crypto Payments a Grey Area in Singapore
The car dealership that Lau is paying with Ether is MHG Cars, which started operating in December last year.
Lydia Ang, the company’s director, claims that they are the only car dealership in Singapore to accept digital currencies.
She added that it is a “niche market” but will be significant in the future, specifying how cryptos cut transaction fee from 3 to 1 percent as compared to credit cards.
The authorities in Singapore do not regulate cryptocurrency payments right now.
This leaves a regulatory grey area where companies like MHG Cars can accept crypto payments.
They are currently working with blockchain-based payment solutions provider Bizkey to enable customer crypto payments.
Singaporean lawmakers are expected to consider the Payment Services Bill in parliament again this year.
If it passes through, the Monetary Authority of Singapore (MAS) will get the power to impose regulations on intermediaries that engage in payment-type digital tokens transactions.
MAS has been historically hawkish on crypto, advising people to be cautious with digital assets as they are “very high risk.”
Less than a hundred merchants currently accept crypto payments in Singapore owing to dubious regulations.