Hong Kong and Singapore vie for dominance as Asia’s top crypto hubs, but regulatory hurdles and global competition raise doubts about their long-term success.
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| As Hong Kong and Singapore lead Asia’s crypto surge, they face regulatory and global competition pressures. Image: ChicHue |
Hong Kong — February 23, 2025:
Hong Kong and Singapore are moving aggressively to position themselves as Asia’s leading cryptocurrency hubs, capitalising on a sector that has regained global momentum. With Bitcoin surging to near-record highs and Donald Trump’s pro-crypto stance adding fuel to the market’s bullish outlook, both financial centres see an opportunity. But can they truly become dominant players in the space?
Hong Kong’s Securities and Futures Commission (SFC) made clear this week that liquidity is key to its crypto ambitions. Expanding product offerings to include derivatives and margin financing could attract institutional investors and large-scale trading, providing the depth necessary to sustain a global crypto hub. Likewise, Singapore’s Monetary Authority has been ahead of the curve in regulatory clarity, issuing key licences and fostering initiatives like Project Guardian to integrate digital assets into traditional finance.
Both cities have reaped early rewards. Hong Kong’s centralised exchanges processed $26.6 billion in transactions in the first half of 2024, nearly triple the previous year’s total and far exceeding Singapore’s $13.5 billion. Yet, while numbers suggest momentum, challenges remain.
Regulation is both a necessity and a bottleneck. Hong Kong overhauled its crypto framework in 2023, placing the SFC in charge of vetting and licensing exchanges. While this move was aimed at ensuring market integrity, the process has been slow and costly. More than a dozen firms have already withdrawn their applications, and the regulator itself is understaffed. The same dilemma plays out in Singapore, where firms struggle to hire compliance professionals to navigate complex legal requirements.
Additionally, Hong Kong’s ties to Beijing cast a shadow over its ambitions. China banned crypto in 2021, and while Hong Kong’s regulatory approach has Beijing’s “blessing,” firms remain wary of sudden policy shifts. Singapore, on the other hand, offers greater regulatory consistency but faces stiff competition from Dubai, which has been aggressive in courting crypto firms with tax incentives and a more flexible regulatory environment.
A significant wildcard in this equation is the US. Trump’s recent pledge to make America the “crypto capital of the planet” could shift the landscape dramatically. If the US implements clear regulations and tax incentives under a potential Trump presidency, major firms may prefer to base themselves in a country with the world's largest capital markets rather than in Asia. That could drain talent and investment away from Hong Kong and Singapore before they can cement their dominance.
While both cities have made major strides, success is not guaranteed. The ambition is there, as is the market potential, but regulatory delays, staffing shortages, and global competition pose real threats. If Hong Kong and Singapore can streamline compliance, attract liquidity, and maintain investor confidence, they stand a chance. But if bureaucracy slows progress or the US reclaims its crypto leadership, their window of opportunity could close quickly.
For now, the race is on—but the finish line remains uncertain.