The Battle for Asia's Web3 Hub: Singapore Tightens Regulations, Hong Kong Opens Cautiously

Recently, undercurrents regarding the ownership of the "Asian Crypto Center" have surged again. On May 30, the Monetary Authority of Singapore issued new Web3 regulations with a "zero tolerance" stance, shaking the entire Southeast Asian crypto ecosystem. Following this, on June 4, Hong Kong Legislative Council member Wu Jiezhuang publicly welcomed the migration of Singapore's Web3 companies to Hong Kong, promising to provide policy and implementation assistance. This series of actions is not only an invitation to the industry but also a "relay" in the reshaping of the Web3 landscape.

Web3 is not the exclusive domain of a single region, but a new battleground for global finance and technology collaboration and competition. Singapore is redefining boundaries and clarifying jurisdiction under stringent regulation, while Hong Kong is accelerating exploration with cautious openness. So, amidst this storm, where will become the safe harbor for capital and innovation?

Singapore: "Heavy-handed" Approach to Web3 Causes Industry Upheaval

On May 30, the Monetary Authority of Singapore (MAS) released new regulations for Digital Token Service Providers (DTSP), requiring all individuals and institutions engaged in cryptocurrency-related businesses to obtain a DTSP license by June 30, or they must cease operations. This regulation covers trading platforms, wallet service providers, DeFi protocols, NFT markets, and even KOLs that publish cryptocurrency research content. The industry summarizes the three main regulatory characteristics of MAS as: no grace period, full coverage, and zero tolerance.

The particularly controversial issue is the expansion of the definition of "business premises"—even if one is only "working from home" in Singapore and serving overseas users, it is considered a regulatory target, which makes many entrepreneurs feel that they have "nowhere to run."

On June 6, MAS released a supplementary statement in an attempt to alleviate some market misunderstandings and panic. However, this "clarification" did not materially relax regulatory requirements:

1. The regulatory focus is on institutions that "provide digital payment token or capital markets token services only to overseas clients"; such DTSPs will need to be licensed, but MAS has made it clear that "very few licenses will be issued."
2. Projects that provide governance or functional token services (such as DAO platforms, GameFi item tokens, etc.) are not included in this regulatory framework and do not require licensing.
3. Institutions that have served clients within Singapore continue to maintain the existing regulatory framework and are not affected by the new regulations.
4. There is still no transition period, and MAS has emphasized that it has publicly warned about this policy direction multiple times since 2022.

This clarification indicates that MAS aims to precisely target "overseas service providers" with potential cross-border money laundering risks, rather than completely banning the Web3 industry. However, it also sends a clear signal — following a series of reputational shocks, Singapore's financial regulatory style is shifting from "open experimentation" to "risk prevention first". This trend may end its loose imagination of being an "Asian crypto paradise" and put many startup projects in a dilemma of "either high compliance costs or migrating to escape", signaling that Singapore's Web3 ecosystem is entering a period of compliance restructuring.

Hong Kong: Embracing Web3, Open Regulation and Policy Advantages Emerge

In stark contrast to the tightening of regulations in Singapore, Hong Kong is accelerating its embrace of Web3 through a more flexible compliance system.

Since the release of the "Policy Declaration on the Development of Virtual Assets" in 2022, Hong Kong has gradually implemented core systems including the VATP virtual asset trading platform license, stablecoin regulatory regulations, and the compliance of OTC off-exchange trading, providing clear expectations for the market. Currently, 10 virtual asset trading platforms have obtained licenses, and retail investors are clearly allowed to participate in trading.

In promoting product innovation across multiple sub-tracks such as RWA (Real World Asset) tokenization, virtual asset staking, and derivatives pilot projects, Hong Kong is no longer just "talking the talk":

• In April this year, the world's first tokenized currency market ETF was approved by the Securities and Futures Commission and launched in Hong Kong, making it the largest virtual asset ETF market in the Asia-Pacific region.
• On May 30, the Hong Kong Special Administrative Region government published the "Stablecoin Ordinance" in the Gazette, establishing a regulatory framework for the issuance and use of stablecoins.

Hong Kong is also increasing resource investment in capital attraction and entrepreneurial support.

1. Corporate Introduction: Since the publication of the virtual asset declaration in 2022, thousands of Web3 companies have settled in Hong Kong, with Cyberport gathering nearly 300 Web3 enterprises, accumulating over 400 million Hong Kong dollars in financing.
2. Tax incentives: Provide tax incentives for qualified virtual asset transactions.
3. Talent Introduction: Provide a maximum monthly landing subsidy of HKD 32,000 and funding for researchers.
4. Policy Support: The government actively "attracts investment and intelligence", making a high-profile effort to attract restricted enterprises in Singapore to relocate their headquarters.

Compared to the increasingly stringent environment in Singapore, Hong Kong seems particularly "friendly" at this time, making it more suitable for entrepreneurs to explore the market and engage in experimental innovation.

Dreams and Reality: Is Hong Kong a "New Center" or a "Transition Station"?

However, when we try to conclude that "Hong Kong is more welcoming to crypto entrepreneurs than Singapore," we still need to remain calm about the reality.

On the factual level, Hong Kong does indeed convey a stance of "willing to take on more roles," but the industry is also aware that it still faces numerous problems and challenges.

• Although the policy statements are clear, the implementation progress remains uneven.
• The infrastructure and supporting services are still inadequate, and startups face significant challenges in the early stages.
• Although the tax policy has advantages, more clarity is still needed in the implementation of regulatory details.

From the perspective of entrepreneurs, "migrating to Hong Kong" is not a decision made lightly, but rather a "suboptimal choice under the absence of better options." Some even argue that instead of establishing a new base in Hong Kong, it would be better to directly turn to crypto-friendly regions with looser policies and lower environmental costs. Other regions' crypto initiatives are also worth paying attention to.

In other words, today's Hong Kong resembles a "relay station" after Singapore's withdrawal, rather than an immediate new hub with a complete ecological closed loop.

Conclusion: The Hong Kong-New Singapore rivalry is just a microcosm of the Asian Web3 ecosystem.

The swings of regulation, the differences in policies, and the evolution of ecology are all external manifestations of the game between capital and innovation in the Web3 era.

This time, Singapore chooses "to set rules", while Hong Kong opts for "to attract flows". In the long term, this is not a black-and-white contest, but rather a restructuring of ecological positioning: Singapore may evolve into a compliance asset management center, while Hong Kong will take on the role of a technology testing ground and an Asian capital hub.

For entrepreneurs, what matters most is not which city to bet on, but to always maintain precise perception of policy trends, regulatory scales, and market space, along with the ability to respond quickly. The world of Web3 is always fluid; the real "safe haven" may not only exist on the map but also in the minds of every team making clear decisions.