Bloomberg latest a report It revealed that in 2024, Singapore has managed to establish itself as a leading digital asset hub in Asia, overtaking Hong Kong in “regulatory efficiency and attractiveness” for cryptocurrency companies.
In particular, the city-state has issued 13 cryptocurrency licenses this year, more than double the number granted in 2023. Prominent global players such as OKX, Upbit, Anchorage, BitGo and GSR have received 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 platforms fully licensed and several others holding temporary licences.
Regulatory differences shape regional competitiveness
Amid this discrepancy, industry experts point to Hong Kong’s regulatory restrictions as an important factor behind its lag. They stated that the city’s strict rules on custody of customer assets, token listings, and delisting policies made it difficult for exchanges to operate profitably.
In addition, trading is limited to highly liquid cryptocurrencies such as Bitcoin and Ethereum, which limits investment opportunities in altcoins. This cautious approach has led prominent exchanges such as OKX and Bybit to withdraw their license applications in Hong Kong and redirect their focus towards Singapore.
Angela Ang, senior policy advisor at consulting firm TRM Labs, noted:
“The regulatory regime for exchanges in Hong Kong is more restrictive in a number of important ways – such as custody of client assets and policies for listing and delisting of tokens. This may have tipped the scales in Singapore’s favour.
Different approaches to cryptocurrency innovation
Singapore’s regulatory framework has been praised for its balanced approach, encouraging cooperation between new entrants and established financial institutions.
Initiatives such as 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, Bloomberg noted.
These efforts have made Singapore a stable, long-term option for companies seeking a regional headquarters for their digital asset operations.
In contrast, while Hong Kong has also made notable achievements, such as selling HK$6 billion (US$770 million) in tokenized green bonds and launching exchange-traded funds (ETFs) for bitcoin and ethereum, adoption has been slower.
The total assets under management of these ETFs in Hong Kong is about $500 million, far less than the $120 billion held by similar products in the United States.
Experts point out that Hong Kong’s focus on established financial institutions leaves limited space for innovative startups, slowing the pace of growth of the digital assets sector. “Meeting high standards and being profitable,” said Roger Lee, co-founder of One Satoshi.
Featured image created with DALL-E, chart from TradingView