Singapore overtakes Hong Kong as Asia’s leading crypto hub in 2024

Singapore solidified its status as a leading digital assets hub in 2024, granting 13 crypto licenses to a mix of major exchanges and global operators, more than doubling the previous year’s approvals, as per a Bloomberg report.

Meanwhile, rival financial centre Hong Kong continues to struggle with a slower licensing process and stricter regulatory requirements.

As the competition to attract digital-asset firms heats up, Singapore’s proactive approach highlights its growing appeal as a global crypto destination.

Both Singapore and Hong Kong aim to leverage crypto innovation to enhance their reputations as business hubs.

Hong Kong’s licensing pace and restrictive measures, such as limiting trading to highly liquid cryptocurrencies like Bitcoin and Ether, have left many firms questioning its viability.

In contrast, Singapore’s regulatory environment has been more flexible, offering a conducive ecosystem for both established players and newcomers in the blockchain space.

Hong Kong’s regulatory hurdles slow crypto expansion

Hong Kong’s stringent crypto regulations, particularly regarding asset custody and token policies, have created barriers for firms seeking licenses.

By the end of 2024, the city had issued just seven full licenses, with four approved under restrictive conditions as late as December.

Provisional permits have been granted to an additional seven firms, but some prominent exchanges, including OKX and Bybit, have withdrawn their applications, citing operational and profitability challenges.

Hong Kong’s exclusivity to Bitcoin and Ether trading limits investor access to smaller altcoins, stifling market growth.

Moreover, the lingering influence of China’s crypto ban adds a layer of risk for firms operating in Hong Kong’s special administrative regime.

Despite these challenges, Hong Kong has made notable strides in wholesale blockchain initiatives, including the HK$6 billion ($770 million) sale of digital green bonds via HSBC’s tokenization platform.

On the retail front, Hong Kong launched spot Bitcoin and Ether ETFs in April 2024, but they have underwhelmed compared to their US counterparts.

These ETFs have accumulated just $500 million in assets, far below the $120 billion managed by US issuers.

Singapore’s flexible framework attracts crypto giants

In contrast, Singapore’s licensing regime encourages collaboration between traditional financial institutions and crypto startups, fostering innovation and inclusivity.

This has drawn global heavyweights such as Anchorage, BitGo, and GSR to establish a presence in the city-state.

Notably, Singapore’s initiatives like Project Guardian and Global Layer 1 focus on asset tokenization and blockchain commercialisation, supported by the Monetary Authority of Singapore.

Singapore’s adaptability and proactive measures have solidified its position as a “safe, long-term choice” for digital-asset firms.

The country’s regulatory framework strikes a balance between risk and opportunity, making it an attractive hub for regional operations.

Market players view Singapore’s approach as more conducive to innovation, creating opportunities for smaller entrants and fostering growth across the crypto ecosystem.

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