Singapore outpaces Hong Kong in crypto adoption amid uneven regulatory approach

Singapore’s stance on crypto licenses has lagged that of Hong Kong, where regulatory hurdles have slowed the city’s progress.

Singapore is signaling progress towards becoming a global hub for crypto business, with the city-state issuing 13 new crypto licenses in 2024, Bloomberg has learned. This figure doubles the number given last year.

The licenses mostly went to major exchanges like OKX and Upbit, as well as other firms like Anchorage, BitGo, and GSR. The report also notes that Hong Kong faces delays in its efforts to catch up due to the slow pace of the licensing process, and both cities aim to attract digital asset firms by offering special regulatory regimes, tokenization projects and innovation. focused virtual spaces.

As Angela Ang, senior policy advisor at blockchain forensics firm TRM Labs, notes, Hong Kong’s regulatory regime for exchanges is “more restrictive in many important respects, such as customer asset custody and token listing and delisting policies,” adding that: “may have tipped the balance in Singapore’s favour.”

Hong Kong has fully licensed seven platforms, including four approved with some restrictions in December. However, exchanges such as OKX and Bybit withdrew their applications without explaining the reason. Due to its cautious approach, Hong Kong only allows trading of the most liquid cryptocurrencies such as Bitcoin (BTC) and Ethereum (ETH) and restricts trading of smaller, more volatile tokens.

Bloomberg says another factor limiting Hong Kong’s ability to remain competitive in the space is the influence of China, where crypto trading is banned. David Rogers, regional CEO of market maker B2C2, says Hong Kong’s special relationship with China gives it a different risk profile compared to other countries. Singapore’s supportive environment makes it a “safe, long-term choice” for a regional hub, according to Rogers.