In 2025, Hong Kong and Singapore remain Asia’s most influential crypto jurisdictions, but their regulatory philosophies diverge sharply. Hong Kong’s Securities and Futures Commission (SFC) has granted 10 Virtual Asset Trading Platform (VATP) licenses, enabling retail access to spot crypto ETFs, staking services, and tokenized bonds. In contrast, Singapore’s Monetary Authority (MAS) has issued over 30 Major Payment Institution (MPI) licenses, but restricts retail crypto access and focuses on institutional-grade infrastructure.
Hong Kong’s licensing regime is designed to attract retail investors and global exchanges. Platforms like HashKey and OSL offer staking and ETF trading to the public. Singapore, meanwhile, hosts Coinbase, Crypto.com, and Ripple under its MPI framework, but mandates risk awareness tests, bans credit card purchases, and enforces daily reconciliation of customer funds. The result is a bifurcation: Hong Kong leads in retail innovation, while Singapore dominates institutional compliance.
Tax Incentives and Business Migration
Hong Kong offers zero capital gains tax and no VAT on crypto transactions, making it highly attractive for traders and retail platforms. The city also incentivizes tokenization through stamp duty exemptions on tokenized ETFs and government bonds. Singapore, while also tax-friendly, has tightened its grip on offshore crypto firms. As of June 30, 2025, all Singapore-incorporated entities serving overseas clients must obtain a Digital Token Service Provider (DTSP) license or cease operations.
This directive has triggered a talent and capital migration toward Dubai and Hong Kong. Firms like Bitget and Bybit have relocated staff, while Binance retains hundreds of remote employees in Singapore by avoiding direct customer-facing roles. Singapore’s stricter regime is seen by some as a long-term play to attract regulated institutional capital and reduce regulatory arbitrage, but it risks losing its edge in retail innovation.
Sandbox Initiatives and Programmable Money
Hong Kong’s LEAP framework—Legal clarity, Ecosystem expansion, Application development, and People partnerships—supports tokenized government bonds, stablecoin pilots, and secondary market trading of tokenized ETFs. The city is also funding blockchain projects through Cyberport, its tech innovation hub, and has launched a stablecoin licensing regime effective August 1, 2025.
Singapore’s Project Orchid, launched in 2021, focuses on programmable digital money and infrastructure for a digital Singapore dollar (DSGD). The initiative includes trials for Purpose Bound Money (PBM), tokenized deposits, and wholesale CBDC settlement. MAS is piloting live issuance of wholesale CBDCs for interbank payments and exploring cross-border securities settlement. These efforts reflect Singapore’s emphasis on compliant, programmable finance over retail speculation.
ETF Rollouts and Tokenization Strategies
Hong Kong has taken the lead in crypto ETF adoption, launching Asia’s first spot Bitcoin and Ethereum ETFs in 2024 and expanding into tokenized ETFs in 2025. These products are tradable on licensed platforms, with clear stamp duty treatment and secondary market support. The city is also tokenizing assets like gold, solar panels, and government bonds, showcasing its commitment to real-world asset digitization.
Singapore, while slower on ETF rollouts, is advancing tokenized payables and stablecoin interoperability. Amazon and HSBC are testing PBM-based tokenized invoices, while Grab and Alipay are piloting cross-wallet stablecoin payments. These use cases reflect Singapore’s focus on enterprise-grade applications, such as supply chain finance and programmable disbursements.
Compliance Architecture and Risk Controls
Singapore’s MAS has positioned itself as a global leader in crypto compliance, enforcing the Travel Rule, banning retail incentives, and requiring independent custody and AML/CFT protocols. It also mandates segregation of customer assets, enhanced due diligence for DeFi platforms, and strict licensing for offshore-facing entities.
Hong Kong, while more permissive, is consolidating its digital asset regime. The SFC and Financial Services and the Treasury Bureau (FSTB) are conducting a comprehensive legal review to unify licensing for dealers, custodians, and stablecoin issuers. The city’s approach balances innovation with investor protection, though critics argue it may be less robust than Singapore’s institutional safeguards.
Strategic Outlook: Diverging Paths to Global Leadership
Hong Kong is betting on retail access, tokenization, and ETF liquidity to become Asia’s crypto capital. Singapore is building a compliant, programmable, and institutionally trusted ecosystem, anchored by Project Orchid and wholesale CBDC pilots. Both cities are shaping the future of digital finance—but their roads diverge in philosophy, execution, and target audience.
Shogun Lin
