Navigating the Crypto Seas: A Comparison of Regulations in Taiwan, Hong Kong, and Singapore

The world of cryptocurrency is a dynamic one, constantly evolving with technological advancements and shifting regulatory landscapes.1 For investors and founders looking to dive into this exciting space, understanding the legal frameworks of key jurisdictions is paramount. Taiwan, Hong Kong, and Singapore have emerged as significant players in the Asian crypto scene, each adopting distinct approaches to regulation. Let’s compare their stances and what it means for you.

 

Taiwan: A Cautious but Progressive Path

Taiwan has historically taken a measured approach to cryptocurrency, balancing innovation with a focus on risk mitigation and investor protection.2 While not as aggressively pro-crypto as some jurisdictions, Taiwan’s Financial Supervisory Commission (FSC) has been steadily developing clearer guidelines.3

 

What investors and founders need to know about Taiwan:

• Security Token Offerings (STOs): Taiwan has a clear regulatory framework for STOs, differentiating by a threshold of NTD30 million.4 Offerings below this amount must comply with specific STO regulations, while larger ones require testing in a “financial regulatory sandbox” and adherence to the Securities and Exchange Act (SEA).5 Retail investors have a maximum subscription limit of NTD300,000 per STO.
• Virtual Asset Service Providers (VASPs): In 2024, the FSC introduced new rules requiring VASPs (including exchanges, trading platforms, and custodial services) to register with the FSC.6 This aims to enhance anti-money laundering (AML) and counter-terrorist financing (CTF) measures, requiring VASPs to implement internal controls, KYC procedures, and transaction monitoring.7
• Taxation: The Ministry of Finance is clarifying tax regulations.8 Cryptocurrencies classified as securities-type are temporarily exempt from taxation, while others are subject to tax.9 Tax treatment varies for individual and corporate investors, with specific attention on transactions conducted on online trading platforms for audit purposes.10
• Stablecoins: Taiwan is also exploring regulations for stablecoins, with the FSC authorizing banks to issue New Taiwan Dollar-pegged stablecoins under specific criteria and approvals.11

Hong Kong: Aiming for a Global Crypto Hub

Hong Kong has positioned itself as a leading jurisdiction for virtual assets, embracing a more progressive and commercially viable regulatory framework compared to some of its regional counterparts.12 Its goal is to attract institutional capital and innovation while maintaining robust investor protection.

 

What investors and founders need to know about Hong Kong:

• VASP Licensing: Since June 2023, centralized virtual asset trading platforms in Hong Kong are required to obtain a license under the Anti-Money Laundering and Counter-Terrorist Financing Ordinance. This regime mandates strict KYC/AML protocols, proof of reserves audits, and segregation of client assets.13
• Stablecoin Regulation: Hong Kong is finalizing a bespoke regulatory regime for fiat-backed stablecoins, requiring issuers to maintain one-to-one reserves, undergo periodic audits,14 and obtain authorization from the Hong Kong Monetary Authority (HKMA).15 This proactive approach aims to set Hong Kong apart as a secure hub for stablecoin issuance.16
• Tax Advantages: Hong Kong offers significant tax incentives.17 It classifies cryptocurrencies as intangible assets, exempting them from sales taxes. Importantly, there is no capital gains tax on cryptocurrency trading, making it attractive for high-frequency traders and investors. Its territorial tax system also ensures a competitive corporate tax rate.
• Investor Protection: Hong Kong has some of the world’s strictest custody requirements for licensed VASPs, including cold storage mandates for a high percentage of client assets and independent third-party audits.18

Singapore: A Cautious Innovator

Singapore has been a pioneer in fintech and blockchain, and its regulatory approach to digital assets reflects a desire to foster innovation while maintaining financial stability and combating illicit activities.19 The Monetary Authority of Singapore (MAS) is the primary regulator.20

 

What investors and founders need to know about Singapore:

• Payment Services Act (PSA): The PSA is the cornerstone of Singapore’s digital asset regulation, covering a wide range of payment service providers, including those dealing in Digital Payment Tokens (DPTs).21 VASPs providing services related to the transfer, exchange, or custody of DPTs are required to obtain a license from MAS.22
• Licensing and Compliance: The MAS licensing regime ensures stringent regulatory obligations, particularly concerning AML and CTF measures.23 From June 30, 2025, DTSPs providing services solely to customers outside Singapore relating to digital payment tokens and capital market products will need to be licensed, with a high bar for approval due to higher money laundering risks.24
• Classification of Digital Tokens: MAS classifies digital tokens based on their function.25 DPTs are covered under the PSA, while security tokens fall under the Securities and Futures Act (SFA), ensuring investor protection laws apply similarly to traditional securities.
• Stablecoin Regulations: Singapore has also developed stablecoin regulations, mandating issuers to maintain sufficient reserves and ensure price stability.26
• No Capital Gains Tax: Similar to Hong Kong, Singapore generally does not impose capital gains tax on cryptocurrencies.

Conclusion: Making Informed Decisions

The regulatory landscape for cryptocurrencies is a patchwork of approaches, each with its own nuances and implications. While Hong Kong is making strong strides to be a global crypto hub with its clear licensing and tax advantages, Taiwan is steadily building a robust framework focused on investor protection, and Singapore continues to be a cautious innovator.

For investors and founders, understanding these differences is crucial for strategic planning and compliance. Whether you’re looking to launch a new crypto venture, invest in digital assets, or simply navigate the evolving legal terrain, expert guidance is invaluable.

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