According to Bloomberg, Singapore cemented its position as a leading digital assets hub in 2024, awarding 13 crypto licenses to a mix of major exchanges and global operators, more than double the number of approvals last year. report,
Meanwhile, rival financial hub Hong Kong struggles with a slow licensing process and strict regulatory requirements.
As competition to attract digital-asset firms grows, Singapore’s proactive approach highlights its growing appeal as a global crypto destination.
Both Singapore and Hong Kong aim to take advantage of crypto innovation to enhance their reputation as business hubs.
Hong Kong’s licensing pace and restrictive measures such as limiting trading in highly liquid cryptocurrencies like Bitcoin and Ether have made many companies question its feasibility.
In contrast, Singapore’s regulatory environment has been more flexible, providing a favorable ecosystem for both established players and newcomers to the blockchain sector.
Hong Kong’s regulatory hurdles slow crypto expansion
Hong Kong’s stringent crypto regulations, particularly regarding asset custody and token policies, have created hurdles for firms seeking a license.
By the end of 2024, the city had issued only seven full licenses, four of which were approved under restrictive conditions by the end of December.
An additional seven companies have been granted provisional permits, but some major exchanges, including OKEx and Bybit, have withdrawn their applications, citing operational and profitability challenges.
Hong Kong’s exclusivity to Bitcoin and Ether trading limits investors’ access to smaller altcoins, stunting market growth.
Additionally, the impact of China’s crypto ban adds a layer of risk for companies operating in the special administrative regime of Hong Kong.
Despite these challenges, Hong Kong has made notable progress on wholesale blockchain initiatives, including the sale of a HK$6 billion ($770 million) digital green bond through HSBC’s tokenization platform.
On the retail front, Hong Kong launched spot Bitcoin and Ether ETFs in April 2024, but they underperformed compared to their US counterparts.
These ETFs have accumulated only $500 million in assets, far less than the $120 billion managed by US issuers.
Singapore’s flexible infrastructure attracts crypto giants
In contrast, Singapore’s licensing regime encourages collaboration between traditional financial institutions and crypto startups, promoting innovation and inclusivity.
This has attracted global giants such as Anchorage, BitGo and GSR to set up presence in the city-state.
In particular, Singaporean initiatives such as Project Guardian and Global Layer 1 focused on asset tokenization and blockchain commercialization, which are supported by the Monetary Authority of Singapore.
Singapore’s adaptability and proactive measures have cemented its position as a “safe, long-term option” 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 in the crypto ecosystem.
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