Singapore Takes the Lead Over Hong Kong in Asia’s Crypto Hub Race – Here’s Why

A recent Bloomberg report has revealed that in 2024, Singapore was able to solidify its position as a leading digital asset hub in Asia, surpassing Hong Kong in “regulatory efficiency and appeal” to crypto firms.

Particularly, the city-state issued 13 crypto licenses this year, more than double the number granted in 2023. Prominent global players such as OKX, Upbit, Anchorage, BitGo, and GSR secured regulatory approval, highlighting Singapore’s growing attractiveness for digital asset operators.

In contrast, Hong Kong has faced “slower progress” under its licensing regime, with only seven fully licensed platforms and several others holding provisional permits.

Regulatory Differences Shape Regional Competitiveness

Amid this discrepancy, industry experts point to regulatory restrictions in Hong Kong as a significant factor behind its lag. They mentioned that the city’s stringent rules around custody of customer assets, token listing, and delisting policies have made it challenging for exchanges to operate profitably.

Additionally, trading is restricted to high-liquidity cryptocurrencies like Bitcoin and Ethereum, limiting opportunities for altcoin investments. This cautious approach has led prominent exchanges such as OKX and Bybit to withdraw their licensing applications in Hong Kong, redirecting their focus toward Singapore.

Angela Ang, senior policy adviser at consultancy TRM Labs noted:

“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. This may have tipped the balance in Singapore’s favor.”

Diverging Approaches to Crypto Innovation

Singapore’s regulatory framework has been praised for its balanced approach, promoting collaboration between new entrants and established financial institutions.

Bloomberg pointed out that initiatives like Project Guardian and Global Layer 1, backed by the Monetary Authority of Singapore, aim to accelerate asset tokenization and drive blockchain adoption across wholesale financial markets.

These efforts have positioned Singapore as a long-term, stable choice for companies seeking 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 Bitcoin and Ethereum spot exchange-traded funds (ETFs), adoption has been slower.

The combined assets under management for these ETFs in Hong Kong stand at around $500 million—significantly lower 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 space for innovative startups, slowing the pace of digital asset sector growth. Roger Li, co-founder of One Satoshi stated: “It’s quite a high standard to meet and be profitable.”

Featured image created with DALL-E, Chart from TradingView