Digital Assets Hub: Singapore Takes the Lead
As the world of digital assets continues to evolve, Singapore is solidifying its position as a premier hub for crypto operators. In 2024, the city-state granted 13 crypto licenses to top exchanges like OKX and Upbit, as well as global heavyweights Anchorage, BitGo, and GSR. This marks a significant increase from the previous year, cementing Singapore’s status as a go-to destination for digital-asset firms.
A Regulatory Regime that Works
Singapore’s success can be attributed to its well-crafted regulatory regime, which provides a clear framework for crypto operators to thrive. In contrast, Hong Kong’s licensing regime has been slow to progress, with approvals coming in at a slower pace than expected. According to Angela Ang, senior policy adviser at TRM Labs, Hong Kong’s regulatory regime is more restrictive in key areas, such as custody of customer assets and token listing and delisting policies.
A Tale of Two Cities
While Singapore has fully licensed 13 platforms, Hong Kong has only fully licensed seven, with four receiving the green light on December 18. Additionally, seven platforms hold provisional permits in Hong Kong. The city’s restrictive approach to crypto trading, limiting investors to only the most liquid cryptocurrencies like Bitcoin and Ether, may have contributed to its slower progress.
The China Factor
Another crucial factor influencing digital-asset executives’ decisions is the influence of China, where crypto trading is banned. Hong Kong’s special administrative regime presents a unique risk profile compared to other countries, making it a less appealing option for some firms.
A Safe Haven for Digital Assets
Singapore’s supportive environment, on the other hand, makes it an attractive choice for a regional hub. David Rogers, regional chief executive at market maker B2C2 Ltd., which has applied for a license in Singapore, notes that the city-state offers a “safe, long-term choice” for digital-asset firms.
Wholesale Progress
Both cities have made strides in getting regulated financial institutions to experiment with blockchain software. Singapore’s Project Guardian and Global Layer 1 initiatives aim to support the commercialization of asset tokenization, while Hong Kong oversaw the sale of HK$6 billion of digital green bonds using HSBC Holdings Plc’s tokenization platform.
Innovation and Growth
Singapore’s framework encourages interaction between new entrants and established institutions, fostering innovation and growth. In contrast, Hong Kong’s focus on established financial institutions limits opportunities for new entrants and innovation. As the digital-asset landscape continues to evolve, Singapore’s lead is likely to widen, solidifying its position as a premier hub for crypto operators.
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