A recent report from Bloomberg revealed that in 2024, Singapore managed to consolidate its position as the leading digital asset hub in Asia, surpassing Hong Kong in terms of “regulatory efficiency and attractiveness” for crypto companies.
Notably, the city-state has issued 13 crypto licenses this year, more than double the number granted in 2023. Leading global players such as OKX, Upbit, Anchorage, BitGo and GSR have obtained regulatory approval, highlighting the growing attractiveness of Singapore for digital asset operators.
In contrast, Hong Kong has seen “slower progress” on its licensing regime, with only seven platforms fully licensed and several others holding provisional permits.
Regulatory differences shape regional competitiveness
Amid this gap, industry experts point to regulatory restrictions in Hong Kong as a significant factor behind the delay. They mentioned that the city’s strict rules regarding custody of customer assets, token listing, and delisting policies have made it difficult 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 leading exchanges such as OKX and Bybit to withdraw their license applications in Hong Kong, shifting their focus to Singapore.
Angela Ang, senior policy advisor at consultancy TRM Labs, noted:
“The regulatory regime of Hong Kong exchanges is more restrictive on a number of important issues, such as the custody of client assets and token listing and delisting policies. This may have tipped the scales in Singapore’s favor.”
Divergent Approaches to Cryptographic Innovation
Singapore’s regulatory framework has been praised for its balanced approach, promoting collaboration between new entrants and established financial institutions.
Bloomberg highlighted that initiatives such as Project Guardian and Global Layer 1, supported by the Monetary Authority of Singapore, aim to accelerate asset tokenization and drive blockchain adoption in wholesale financial markets.
These efforts have positioned Singapore as a stable, long-term choice for companies seeking a regional headquarters for their digital asset operations.
In contrast, although Hong Kong has also achieved significant milestones, such as the sale of HK$6 billion ($770 million) of tokenized green bonds and the launch of spot exchange-traded funds (ETFs). Bitcoin and Ethereum adoption has been slower.
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 focus on established financial institutions leaves limited space for innovative startups, thereby slowing the pace of growth of the digital assets sector. Roger Li, co-founder of One Satoshi said: “It’s a pretty high standard to meet and be profitable. »
Featured image created with DALL-E, chart from TradingView
