Singapore has further solidified its position as the leading digital asset hub in Asia in 2024. On the other hand, Hong Kong, with similar ambitions, is facing various challenges in its efforts to gain the same level of attraction in the industry.
According to a Bloomberg report on Tuesday (24/12), both cities have been competing to attract global digital asset companies. Various strategies have been implemented, including offering specific regulations, supporting tokenization projects, and developing sandbox frameworks to facilitate innovation.
Each government sees significant opportunities in cryptocurrency to enhance their appeal as international business hubs. However, developments between the two cities have not aligned.
Singapore’s Advantage with Progressive Policies
Singapore has taken concrete steps by issuing 13 crypto licenses to leading operators, including exchanges like OKX and Upbit, as well as global players such as Anchorage, BitGo, and GSR. This number is more than double the licenses issued in the previous year, reflecting Singapore’s commitment to supporting innovation in this sector.
Angela Ang, Senior Policy Advisor at TRM Labs, mentioned Singapore’s more flexible regulatory approach as a key advantage over Hong Kong.
“This approach gives Singapore a significant edge,” she said.
Meanwhile, Hong Kong has only issued seven official licenses so far, including four platforms that received approval with some restrictions on December 18. The rest are only granted temporary licenses.
Several major players like OKX and Bybit even withdrew their license applications due to strict policies, such as the ban on altcoin trading. In Hong Kong, only Bitcoin and Ether are allowed to be traded.
Regulatory Influence and Stability in Asia
Another factor influencing digital asset companies’ decisions to expand in Asia is the regulatory impact from China, which has banned cryptocurrency trading. Hong Kong, as a Special Administrative Region, has a different risk profile compared to other countries.
David Rogers, Regional CEO at B2C2 Ltd., described Singapore as a more stable choice for the long term.
“Singapore’s approach is very risk-aware and provides the security we need,” said Rogers.
Singapore also stands out for supporting innovation through projects such as Project Guardian and Global Layer 1. These projects aim to accelerate the commercialization of asset tokenization by involving global financial institutions.
On the other hand, Hong Kong launched HK$6 billion worth of digital green bonds through HSBC Holdings Plc’s tokenization platform. However, this move has not generated the same level of enthusiasm seen in the US market.
Furthermore, the launch of Bitcoin and Ether ETFs last April did not receive significant attention, raising only around US$500 million, far below the US$120 billion held by similar issuers in the US.
Ben Charoenwong, a finance professor at INSEAD, noted that Singapore’s regulatory framework has fostered interaction between newcomers and established institutions, creating broader opportunities for innovation.
“Conversely, Hong Kong’s focus on established financial institutions limits room for new players and innovation,” he said.
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