A recent Bloomberg report has revealed that in 2024, Singapore was able to solidify its position as a leading digital asset hub in Asia, surpassing Hong Kong in “regulatory efficiency and appeal” to crypto firms.

Particularly, the city-state issued 13 crypto licenses this year, more than double the number granted in 2023. Prominent global players such as OKX, Upbit, Anchorage, BitGo, and GSR secured 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 fully licensed platforms and several others holding provisional permits.

Regulatory Differences Shape Regional Competitiveness

Amid this discrepancy, industry experts point to regulatory restrictions in Hong Kong as a significant factor behind its lag. They mentioned that the city’s stringent rules around custody of customer assets, token listing, and delisting policies have made it challenging for exchanges to operate profitably.

Additionally, trading is restricted to high-liquidity cryptocurrencies like Bitcoin and Ethereum, limiting opportunities for altcoin investments. This cautious approach has led prominent exchanges such as OKX and Bybit to withdraw their licensing applications in Hong Kong, redirecting their focus toward Singapore.

Angela Ang, senior policy adviser at consultancy TRM Labs noted:

“Hong Kong’s regulatory regime for exchanges is more restrictive in a number of ways that matter — such as custody of customer assets and token listing and delisting policies. This may have tipped the balance in Singapore’s favor.”

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Author: Samuel Edyme