Singapore has emerged as the leading digital asset hub in Asia, surpassing Hong Kong in 2024. This shift is due to Singapore's efficient regulatory system and its appeal to crypto firms.
Singapore has issued 13 crypto licenses this year, more than double the number granted in 2023. Major global players like OKX, Upbit, Anchorage, BitGo, and GSR have obtained regulatory approval, highlighting Singapore's attractiveness for digital asset operators.
In contrast, Hong Kong has faced challenges with a slower licensing process, granting only seven fully licensed platforms and several others operating under provisional permits. The strict regulatory environment in Hong Kong, particularly regarding the custody of customer assets and token listing and delisting policies, has hindered exchanges' profitability and growth.
The regulatory differences between Singapore and Hong Kong have shaped the competitive landscape for digital assets in the region. Hong Kong's cautious approach to regulation has limited trading to high-liquidity cryptocurrencies, while Singapore's regulatory environment is seen as more favorable.
Singapore's balanced regulatory framework fosters collaboration between new entrants and established financial institutions. Initiatives like Project Guardian and Global Layer 1, supported by the Monetary Authority of Singapore, aim to accelerate asset tokenization and promote blockchain adoption.
Singapore's proactive stance on regulation has positioned it as a stable choice for companies seeking a regional headquarters for their digital asset operations. The city-state's initiatives create an environment conducive to innovation, benefiting both startups and established firms.
In contrast, Hong Kong's focus on established financial institutions has limited room for innovative startups, slowing the growth of its digital asset sector.
The divergence in regulatory approaches between Singapore and Hong Kong highlights the importance of adaptability in the cryptocurrency landscape. Singapore's regulatory framework may serve as a model for other jurisdictions aiming to attract digital asset businesses. The developments in both cities will be closely monitored by industry stakeholders as they navigate a competitive and dynamic market.