The competition to become Asia’s leading digital asset hub has intensified in recent years, with Singapore and Hong Kong emerging as top contenders. While both financial centers have rolled out regulatory frameworks and innovation initiatives to attract crypto firms, Singapore has pulled ahead in 2024—issuing more licenses, welcoming major global players, and fostering a more supportive environment for blockchain innovation.
This strategic momentum positions Singapore as the preferred destination for crypto businesses looking to establish a long-term presence in Asia, especially as Hong Kong continues to navigate stricter regulations and slower licensing progress.
Singapore’s Accelerated Regulatory Progress
In 2024, Singapore issued 13 new crypto licenses to major industry players, more than double the number granted the previous year. Among the approved firms are globally recognized exchanges such as OKX, Upbit, Anchorage, BitGo, and GSR—a clear signal of the country’s growing appeal.
The Monetary Authority of Singapore (MAS) has maintained a balanced approach: enforcing robust compliance standards while actively encouraging innovation. This dual focus has allowed the city-state to attract both established institutions and emerging fintech startups.
By contrast, Hong Kong’s licensing process has been notably slower. Despite introducing its own licensing regime for virtual asset service providers (VASPs), only seven platforms are currently authorized—and several high-profile applicants, including OKX and Bybit, have withdrawn their applications.
Contrasting Regulatory Approaches
One of the key differentiators between the two hubs is the regulatory philosophy each adopts.
Hong Kong enforces stricter rules on areas such as custody of client assets, token listing policies, and investor eligibility. For instance, only highly liquid cryptocurrencies like Bitcoin and Ethereum are permitted for retail trading. So-called "altcoins"—smaller, more volatile tokens—are effectively banned from retail access.
While these measures aim to protect investors, they also limit market diversity and reduce opportunities for innovation.
Angela Hung, Senior Policy Advisor at TRM Labs, noted that Hong Kong’s stringent requirements may be tipping the scales in favor of Singapore. “The higher compliance bar makes it difficult for platforms to operate profitably under Hong Kong’s framework,” she explained.
Roger Lee, co-founder of One Satoshi—a chain of crypto-to-cash exchange outlets in Hong Kong—echoed this sentiment: “Meeting Hong Kong’s standards while remaining financially viable is a significant challenge.”
Innovation vs. Institutional Control
Another critical distinction lies in how each market approaches innovation.
Singapore has launched national initiatives like Project Guardian and Global Layer 1, both backed by MAS, to promote the tokenization of real-world assets such as bonds, funds, and private credit. These programs encourage collaboration between traditional finance and blockchain-native firms, creating a dynamic ecosystem where new business models can thrive.
Hong Kong, meanwhile, has focused on integrating digital assets within existing financial infrastructure. A notable example is HSBC’s tokenized green bond issuance worth HK$6 billion (approximately USD 770 million). While impressive, this model prioritizes institutional control over open-market experimentation.
Furthermore, Hong Kong launched spot Bitcoin and Ethereum ETFs in April 2024. However, these products attracted only around USD 500 million in total assets—paling in comparison to over USD 120 billion held in similar U.S.-listed ETFs.
Ben Charoenwong, Associate Professor of Finance at INSEAD, attributes this disparity to structural differences:
“Singapore’s regulatory framework encourages interaction between newcomers and incumbents. In Hong Kong, the focus remains largely on empowering established institutions—which creates fewer entry points for innovators and restricts the scope for disruption.”
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Geopolitical Considerations for Crypto Firms
For international crypto companies evaluating an Asian base, geopolitical risk remains a crucial factor.
China maintains a blanket ban on cryptocurrency trading, and although Hong Kong operates under a “one country, two systems” framework, its alignment with mainland policies introduces uncertainty. This affects everything from capital flows to data governance and long-term operational planning.
David Rogers, CEO of B2C2 Asia-Pacific—a leading crypto market maker—highlighted this concern when explaining his firm’s decision to apply for a license in Singapore instead of Hong Kong.
“Singapore offers a safe, long-term choice for establishing a regional hub,” Rogers said. “It’s part of our risk-adjusted strategy—one that values regulatory stability and policy continuity.”
FAQs: Understanding the Crypto Hub Competition
Q: Why is Singapore attracting more crypto companies than Hong Kong?
A: Singapore offers faster licensing, a more balanced regulatory approach, and active government support for blockchain innovation through initiatives like Project Guardian—making it more attractive to global firms.
Q: Can Hong Kong still catch up in the crypto race?
A: Yes, but it will require streamlining its approval processes, expanding retail access to a broader range of digital assets, and creating incentives for startups and decentralized projects.
Q: Are U.S.-style crypto ETFs successful in Asia?
A: Not yet. While Hong Kong launched spot Bitcoin and Ethereum ETFs, investor uptake has been modest compared to the U.S., due to tighter restrictions and lower retail participation.
Q: Is China’s crypto ban affecting Hong Kong’s development?
A: Indirectly. Although Hong Kong has autonomy over financial regulation, its integration with mainland systems creates compliance complexities and deters some international players concerned about future policy shifts.
Q: What role does tokenization play in this competition?
A: Tokenization of real-world assets (RWAs) is a major frontier. Singapore is leading through state-backed pilots involving banks and fintechs, while Hong Kong focuses on institutional-grade use cases with limited public access.
Q: How important is regulatory clarity for crypto growth?
A: Extremely. Clear, predictable rules allow firms to invest confidently. Singapore’s consistent guidance gives it an edge over jurisdictions with evolving or restrictive frameworks.
The Road Ahead
As the digital asset economy evolves, the race between Singapore and Hong Kong reflects a broader tension: innovation versus control.
Singapore’s model emphasizes openness, collaboration, and forward-looking regulation—enabling startups and global exchanges alike to test new products in a secure environment. Hong Kong’s strength lies in its deep financial markets and institutional credibility, but its cautious stance risks ceding leadership in the fast-moving world of Web3 and decentralized finance.
For now, the momentum is clearly with Singapore. But with regulatory landscapes constantly shifting, the contest remains dynamic—and far from over.
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