Singapore has surged ahead in its bid to become a global cryptocurrency hub, granting 13 new licenses to digital asset operators in 2024. This move significantly outpaces its rival Hong Kong, where regulatory delays and restrictive policies have slowed progress in the same domain.
The licensing spree positions Singapore as a beacon for digital asset firms, bolstered by its business-friendly environment and clear regulatory framework.
13 Licenses Propel Singapore Forward
In 2024, Singapore’s Monetary Authority (MAS) issued licenses to a diverse group of 13 crypto firms, including global heavyweights such as Anchorage, BitGo, and GSR, alongside prominent exchanges like OKX and Upbit.
- Comparison with 2023: The 2024 figure more than doubles the number of licenses granted in the previous year, demonstrating the city-state’s growing commitment to fostering digital innovation.
- Diverse Beneficiaries: By accommodating a range of operators, Singapore has built an ecosystem that attracts retail exchanges and institutional-grade custodians alike.
Angela Ang, senior policy adviser at TRM Labs, highlights, “Singapore’s progressive stance on custody and token policies gives it a clear advantage in attracting top-tier crypto firms.”
Hong Kong Falls Behind: Struggles with Regulatory Delays
In contrast, Hong Kong’s regulatory environment has made slower strides, with only seven platforms fully licensed by the end of 2024. Although regulators promised accelerated approvals, their restrictive policies, particularly regarding custody of customer assets and token listing, have deterred some high-profile players.
Withdrawals of Applications
Prominent exchanges like OKX and Bybit, initially interested in Hong Kong’s licensing regime, ultimately withdrew their applications. This decision underscores a preference among crypto firms for jurisdictions with clearer and more accommodating frameworks.
Provisional Permits
Seven additional platforms in Hong Kong hold provisional permits, signaling some progress but falling short of Singapore’s decisive pace.
Key Differences in Regulatory Approaches
Singapore’s Edge
Singapore’s licensing framework offers clarity and flexibility that appeals to digital asset firms:
- Tokenization Projects: Encouraging the development of digital asset-backed securities.
- Regulatory Sandboxes: Allowing firms to experiment within a controlled regulatory environment.
Hong Kong’s Challenges
While Hong Kong’s regulators aim for rigor, their policies have inadvertently created bottlenecks:
- Stringent Custody Requirements: Firms must meet restrictive rules for safeguarding customer assets.
- Token Listing Delays: Complex processes for adding and removing cryptocurrencies from platforms have hindered operations.
The Global Crypto Hub Race
Singapore and Hong Kong’s competition to dominate the digital asset landscape reflects a broader trend in global finance:
- Economic Incentives: Both cities see crypto innovation as a means to bolster their status as financial hubs.
- Regulatory Balance: Success hinges on striking a balance between security and innovation.
Singapore’s proactive approach has positioned it as a more attractive destination for businesses seeking to capitalize on the growing digital asset market.
Major Players Choose Singapore
The involvement of top-tier companies such as Anchorage, BitGo, and GSR in Singapore’s ecosystem highlights the city-state’s appeal.
- Anchorage and BitGo: Known for their institutional-grade crypto custody solutions, these firms bring credibility and expertise.
- OKX and Upbit: Leading exchanges that cater to both retail and institutional investors.
These additions enhance Singapore’s reputation as a well-rounded hub capable of supporting diverse market needs.
Hong Kong’s Remaining Opportunities
Despite setbacks, Hong Kong continues to hold potential:
- Provisional Licenses: Seven platforms with provisional permits may gain full approval, increasing market activity.
- Regional Positioning: Proximity to mainland China offers unique opportunities for crypto firms seeking access to Chinese investors.
However, experts caution that without significant policy adjustments, Hong Kong risks losing its competitive edge to Singapore and other global hubs.
Future Prospects for Crypto Regulation
Singapore’s Next Steps
- Expanding Licensing: Continuously welcoming new players to its crypto ecosystem.
- Innovative Initiatives: Leveraging tokenization and decentralized finance (DeFi) to stay ahead of global competitors.
Hong Kong’s Strategy
- Streamlining Approvals: Accelerating the licensing process to reduce delays.
- Policy Revisions: Addressing restrictive elements that deter major firms.
A Clear Winner?
While both cities remain prominent players in the global crypto space, Singapore’s decisive licensing activity and innovative policies give it a significant edge. Hong Kong’s slower pace and more restrictive approach may push firms to favor its rival, potentially reshaping the competitive landscape of digital assets in Asia.