Bloomberg recently report has revealed that in 2024, Singapore was able to cement its position as a leading digital asset hub in Asia, overtaking Hong Kong in “regulatory efficiency and appeal” for crypto firms.
Notably, the city-state issued 13 crypto licenses this year, more than double the number granted in 2023. Major global players such as OKEx, Upbit, Anchorage, BitGo and GSR received regulatory approval, highlighting Singapore’s growing attractiveness for digital asset operators.
In contrast, Hong Kong has faced “slow progress” under its licensing regime, with only seven fully licensed platforms and several others holding temporary permits.
Regulatory differences shape regional competitiveness
Amid this discrepancy, industry experts cite regulatory restrictions in Hong Kong as a key factor behind this. He noted that the city’s stringent regulations regarding custody of client assets, token listing and delisting policies have made it challenging for exchanges to operate profitably.
Additionally, trading is limited to high-liquidity cryptocurrencies like Bitcoin and Ethereum, limiting altcoin investment opportunities. This cautious approach has led major exchanges such as OKEx and Bybit to withdraw their licensing applications in Hong Kong, turning their attention to Singapore.
Angela Ang, senior policy advisor at consultancy TRM Labs, said:
“Hong Kong’s regulatory regime for exchanges is in many ways more restrictive – such as custody of client assets and token listing and delisting policies. This may tip the balance in favor of Singapore.
Different Approaches to Crypto Innovation
Singapore’s regulatory framework has been praised for its balanced approach, promoting cooperation between new entrants and established financial institutions.
Bloomberg reported that initiatives like Project Guardian and Global Layer 1, backed by the Monetary Authority of Singapore, aim to accelerate asset tokenization and promote blockchain adoption in wholesale financial markets.
These efforts have established Singapore as a long-term, stable option for companies looking for a regional headquarters for their digital asset operations.
In contrast, while Hong Kong has also achieved milestones, such as the sale of HK$6 billion ($770 million) in tokenized green bonds and the launch of a Bitcoin and Ethereum spot exchange-traded fund (ETF), the pace of adoption has been slow. Has been.
The combined assets under management of these ETFs in Hong Kong are approximately $500 million – significantly less than the $120 billion held by equivalent products in the United States.
Experts suggest that Hong Kong’s emphasis on established financial institutions leaves limited room for innovative startups, slowing the growth of the digital asset sector. Roger Lee, co-founder of One Satoshi, said: “To accomplish this and be profitable is a pretty high standard.”
Featured image, chart from TradingView, created with DALL-E
