Singapore’s Crypto Boom Outpaces Hong Kong’s Slow Progress

Singapore Gains Momentum as a Leading Crypto Hub in 2024

Singapore has emerged as a strong contender in the race to establish itself as a premier hub for digital assets, outpacing rival financial centre Hong Kong.

This year, Singapore granted 13 cryptocurrency licenses, more than double the number issued in 2023, reflecting its commitment to fostering a dynamic digital economy.

Among the recipients are global players like OKX, Upbit, Anchorage, BitGo, and GSR, positioning the city-state as a magnet for the cryptocurrency industry.

Regulatory Delays Hold Hong Kong Back

In contrast, Hong Kong’s progress in licensing crypto platforms has been comparatively sluggish.

Despite intentions to accelerate approvals, regulators in the city have issued only seven full licenses to date.

Four of these were granted on 18 December with certain restrictions, while an additional seven firms hold provisional permits.

High-profile exchanges such as OKX and Bybit have withdrawn their applications in Hong Kong, signalling challenges within its regulatory framework.

Angela Ang, a senior policy adviser at TRM Labs, explained,

“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 favour.”

Stringent Policies Limit Crypto Trading in Hong Kong

A key hurdle for Hong Kong’s crypto industry lies in its conservative approach to digital asset trading.

The city permits trading only in highly liquid cryptocurrencies like Bitcoin and Ether, excluding smaller altcoins that are often popular among traders.

This restrictive policy creates a challenging environment for exchanges seeking profitability.

Roger Li, co-founder of One Satoshi, a Hong Kong-based chain specialising in over-the-counter crypto-to-cash conversions, noted:

“It’s quite a high standard to meet and be profitable.”

China’s Influence Shapes Hong Kong’s Crypto Landscape

Hong Kong’s position as a special administrative region under China introduces additional complexity.

With crypto trading banned in mainland China, the city’s crypto ecosystem operates within a unique risk profile, which can deter potential entrants.

David Rogers, regional chief executive at market maker B2C2, remarked,

“Hong Kong’s special administrative regime has a different risk profile compared to other countries.”

Singapore’s Supportive Framework Attracts Global Players

In stark contrast, Singapore’s regulatory clarity and supportive policies have positioned it as a preferred destination for digital asset firms.

By adopting a risk-adjusted approach, Singapore offers a stable environment for long-term growth.

Rogers highlighted,

“Singapore’s supportive digital-asset environment makes it a ‘safe, long-term choice’ for a regional hub.”

The city-state’s efforts to enhance its crypto ecosystem include dedicated regulatory regimes, tokenisation initiatives, and sandbox environments designed to foster innovation.

These measures have helped Singapore gain the upper hand in attracting key players and cementing its status as a leading financial centre for digital assets.