Analysts say Hong Kong can have the advantage in expanding to global crypto hubs, triggered by crackdowns on regulations on local Singapore’s unlicensed businesses.
A recent report from the South China Morning Post revealed that the Web3 industry in specially managed regions could increase crypto companies moving to the region after Singapore closes its doors to offshore actors operating without a license. Analysts believe the move could even boost the liquidity of Hong Kong’s crypto sector.
Hong Kong has made regulatory advances to further the sector as Singapore doubles down on unlicensed crypto companies through the deadline set on June 30th. This is most obvious in the latest Stablecoin ordinance bill, which will come into effect at the beginning of August.
The region is less stringent about implementing cryptographic licenses for businesses that want to operate locally compared to Singapore, but Joshu Atchu, co-chair of the Hong Kong Web3 Association, highlighted a shift in global trends that lead to the selective nature of “eliminating bad actors.”
This means that if you want to continue operating in the region, more crypto projects and platforms will be forced to somehow comply with local regulations. Singapore’s crypto crackdown will attempt to regulate more platforms.
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“In the current climate, regulatory actions across Asia are best understood as a regionally-wide game of ‘FATF Musical Chairs’ and no one wants to stand when the music stops.”
By the end of 2024, Hong Kong reportedly had a delay in the number of cryptographic licenses issued compared to Singapore. However, recent regulatory moves have put special managed areas in the spotlight as they are trying to further house and grow into crypto hubs.
A consultant at Christillieu, a fintech-centric consultant prosthetics, said Hong Kong should seize the opportunity to move forward by taking proactive steps to create more comfortable virtual asset laws to seduce more businesses from the crypto industry.
“By promoting an innovative regulatory environment, the region can attract new investments and remain competitive at the global stage,” Liu said.
Recently, Crypto and Financial Technology Firms, including JD.com, Animoca Brands and Ant Group, have been competing for Stablecoin publisher licenses in Hong Kong.
You might like it too: Animoca Brands hopes to obtain a Stablecoin publisher license through a joint venture with Standard Chartered and Telecom
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