Singapore has stepped up its efforts to become a leader in digital assets in 2024, while Hong Kong has struggled to keep up with the race to trac the cryptocurrency business.
According to a report, Singapore issued 13 crypto licenses to different operators in 2024, including players like OKX and Upbit and global companies like Anchorage, BitGo, and GSR. The number of licenses issued by Singapore in 2024 has doubled compared to the number issued in 2023. However, Hong Kong’s licensing program has been moving at a slow pace.
The two cities are competing to attract digital asset firms by offering supportive frameworks, tokenization initiatives, and regulatory sandboxes. Authorities in both jurisdictions are looking at cryptocurrencies as a way to boost their status as global business hubs. However, their progress has been inconsistent. Angela Ang, senior policy advisor at TRM Labs, said: “Hong Kong’s rules are more comprehensive in certain aspects such as customer asset custody and token policies, which may have tipped the balance in Singapore’s favor.”
OKX and Bybit Withdraw Applications for Cryptocurrency Licenses in Hong Kong
Hong Kong’s licensing process has been plagued by delays, with regulators aiming to approve more exchanges by the end of the year. So far, the city has fully licensed seven exchanges, including four with restrictions granted on December 18, while another seven have provisional crypto licenses. Notably, major exchanges like OKX and Bybit have withdrawn their applications for Hong Kong licenses.
Some companies stay out of Hong Kong due to strict licensing rules. The city only allows traders to deal in the most liquid cryptocurrencies, such as Bitcoin and Ether. Custody and listing rules are not a deal breaker for most investors who have chosen Singapore as their alternative.
Singapore’s innovative licensing approach is driving crypto success
Singapore is using a risk-adjusted approach to attract more crypto traders to the country. Its regulatory framework is considered secure and a long-term option. The Monetary Authority of Singapore has continued its ongoing push for innovation through projects such as Project Guardian, which supports tokenization of assets and promotes the digital asset market in Singapore.
In comparison, the Digital Green Bond Initiative and both Bitcoin and Ether ETFs have not received much attention in Hong Kong. The performance of the two ETFs has been disappointing, raising $500 million, compared to the US, where they have raised nearly $20 billion.
Singapore’s framework could encourage partnerships between new and established players. Collaboration is a key driver of the country’s growth in digital assets.
As the two cities battle for dominance, Singapore’s balanced and inclusive approach is enhancing its reputation as a global hub for digital asset innovation.