Singapore has emerged as the frontrunner in the race to become Asia’s leading cryptocurrency hub, leaving rival financial center Hong Kong struggling to keep pace. In 2024, Singapore granted 13 crypto licenses to various operators, including prominent exchanges like OKX, Upbit, and global players such as Anchorage, BitGo, and GSR. This represents a significant increase from the previous year and highlights Singapore’s proactive approach to fostering a thriving digital asset ecosystem.
In contrast, Hong Kong’s licensing regime has moved at a slower pace, with the city issuing full licenses to just seven platforms. Another seven firms hold provisional permits, but prominent exchanges such as OKX and Bybit have withdrawn their applications, citing the restrictive nature of Hong Kong’s regulatory framework.
“Hong Kong’s regulatory regime for exchanges is more restrictive in a number of ways that matter—such as custody of customer assets and token listing and delisting policies,” noted Angela Ang, senior policy adviser at consultancy TRM Labs. “This may have tipped the balance in Singapore’s favour.”
Both cities are vying to attract digital asset firms by introducing regulatory sandboxes, tokenization initiatives, and other incentives to bolster their appeal as global financial hubs. However, the disparity in progress has become evident, with Hong Kong’s stringent trading rules and limited token options raising concerns among industry players.
Hong Kong permits trading only in the most liquid cryptocurrencies, such as bitcoin and ether, barring investors from exploring smaller, more volatile tokens, commonly known as altcoins. This approach, while aimed at reducing risk, has limited opportunities for innovation and profitability.
“It’s quite a high standard to meet and be profitable,” said Roger Li, co-founder of One Satoshi, a chain of over-the-counter crypto stores in Hong Kong.
China’s ban on crypto trading has also influenced the risk perception of Hong Kong’s operations, adding another layer of complexity. David Rogers, regional chief executive at market maker B2C2 Ltd., highlighted this issue, saying, “Hong Kong’s special administrative regime has a different risk profile compared with other countries.” Rogers’ firm has applied for a license in Singapore, citing the city-state’s more stable and supportive regulatory environment.
Singapore’s Monetary Authority has further bolstered its digital asset credentials with initiatives like Project Guardian, which aims to commercialize asset tokenization. This strategy underscores the city-state’s commitment to becoming a global leader in blockchain technology and crypto innovation.
“Singapore’s supportive digital-asset environment makes it a safe, long-term choice for a regional hub,” Rogers added. “It is a risk-adjusted approach we’re taking here.”
While both cities have made strides in integrating regulated financial institutions with blockchain technology, Singapore’s dynamic and adaptable policies have set it apart, solidifying its position as a beacon for crypto innovation in Asia.
