Q2 2025 Asian Web3 Market Review: Policy Implementation and Practical Advancement

Key Points Summary

• Regulatory Trends: 1) Hong Kong will implement stablecoin legislation in August to consolidate its position as a digital financial center. 2) Singapore is enforcing a strict licensing system, prohibiting unlicensed companies from conducting overseas business. 3) Thailand has launched government digital bonds, G-Tokens, becoming the first country to attempt this.

• Corporate News: 1) The Bitcoin investment strategy of a Japanese listed company has sparked a wave of institutional investment. 2) Chinese companies are taking a pragmatic approach, using Hong Kong licenses to circumvent domestic restrictions and increase their Bitcoin holdings.

• Policy Changes: 1) South Korea's stablecoin agenda is progressing slowly due to regulatory disagreements. 2) Vietnam has transitioned from banning cryptocurrencies to legalizing them. 3) The Philippines is adopting a dual-track strategy, with strict regulation running parallel to an innovation sandbox.

1. Asia's Web3 Market in the Second Quarter: Regulatory Stabilization and Increased Corporate Investment

Despite the shift of the Web3 market focus to the United States, the development of major markets in Asia remains noteworthy. Asia not only has the largest cryptocurrency user base in the world but is also a core hub for blockchain innovation.

In the first quarter of 2025, regulatory agencies across Asia laid the groundwork - introducing new regulations, issuing licenses, and launching regulatory sandboxes. Efforts for cross-border cooperation also began to take shape.

In the second quarter, this regulatory foundation facilitated substantial business activities and accelerated capital allocation. The policies launched in the first quarter were tested in the market, leading to their continuous improvement and more practical implementation.

The participation of institutions and enterprises has significantly increased. This report will analyze the development situation of various countries in the second quarter one by one and assess how changes in national policies affect the broader global Web3 ecosystem.

2. Key Developments in Major Asian Markets

2.1. South Korea: The Intersection of Political Transformation and Regulatory Adjustment

In the second quarter, cryptocurrency policy became a hot topic ahead of the presidential election in South Korea in June. Candidates actively shared commitments related to Web3, and after Lee Jae-myung's victory, the market expects significant changes in policy.

One of the core topics of the meeting is the launch of a stablecoin pegged to the South Korean won. Relevant stocks have surged, and traditional financial institutions are also starting to apply for Web3-related trademarks in an effort to enter the market.

However, some conflicts have arisen during the policy-making process, most notably the debate between the Bank of Korea and the Financial Services Commission (FSC) regarding jurisdiction. The South Korean central bank advocates for early involvement in the approval process, positioning stablecoins as part of a broader digital currency ecosystem alongside CBDCs.

In July of this year, the Democratic Party announced a delay of one to two months for the release of the "Digital Asset Innovation Act." The lack of clear leading policymakers seems to be a significant bottleneck, and negotiations among various departments are still fragmented. Therefore, despite the focus on the Korean won stablecoin, specific regulatory guidance remains lacking.

Nonetheless, the gradual improvement of the institutional framework is still ongoing. In June, new regulations allowed non-profit organizations and exchanges to sell donated cryptocurrency assets and permitted immediate liquidation. The rules also require that sales be conducted in a manner that minimizes market impact.

Throughout the second quarter, interest in the South Korean market remained strong. Global exchanges have continued to show sustained investment: a certain trading platform's South Korea branch has completed the Travel Rule integration with two major local exchanges, while another trading platform has stated plans to return to the South Korean market after meeting regulatory standards.

Offline events have also significantly rebounded. Compared to last year, the number of meetups has increased dramatically, with more and more international projects even visiting Korea outside of major conferences. However, the rise of promotional events (which focus more on giveaways rather than participation) has left local builders in Korea feeling fatigued.

2.2. Japan: Institutional and corporate adoption drives the strategic expansion of Bitcoin.

In the second quarter, Japanese listed companies experienced a wave of Bitcoin adoption. This wave was primarily driven by one company, which achieved approximately 39 times the return after making its first Bitcoin purchase in April 2024. The performance of this company became a benchmark, prompting other companies to follow suit and allocate their own Bitcoin.

At the same time, progress has also been made in the construction of stablecoins and payment infrastructure. A large financial group has begun collaborating with blockchain companies to prepare for the issuance of stablecoins. In addition, a cryptocurrency subsidiary of an e-commerce giant has also started supporting XRP trading, significantly enhancing the accessibility of cryptocurrencies on the platform (with over 20 million monthly active users).

As initiatives in the private sector continue to advance, regulatory discussions are also ongoing. Japan's Financial Services Agency (FSA) has introduced a new classification system that divides crypto assets into two categories: the first category includes tokens used for financing or business operations; the second category refers to general crypto assets. However, most of these regulatory updates are still in the discussion stage, and so far, specific amendments are limited.

The participation of retail investors remains low. Japanese retail investors traditionally tend to adopt conservative strategies and are still cautious about crypto assets. Therefore, even with new market participants entering, retail capital is unlikely to flow in immediately.

This stands in stark contrast to markets like South Korea, where active retail participation directly fosters early liquidity for new projects. In Japan, an institution-led investment model provides greater stability but may limit short-term growth momentum.

2.3. Hong Kong: Expansion of regulated stablecoins and digital financial services

In the second quarter, Hong Kong improved its regulatory framework for stablecoins, consolidating its position as Asia's leading digital financial center. The Hong Kong Monetary Authority (HKMA) announced that the new stablecoin regulatory legislation will take effect on August 1. It is expected that the licensing system for stablecoin issuers will be introduced by the end of the year.

Therefore, the first regulated stablecoins are expected to be launched in the fourth quarter, possibly as early as this summer. Companies that previously participated in the Hong Kong Monetary Authority's regulatory sandbox are expected to be the pioneers, and their progress is worth paying attention to.

The scope of digital financial services has also significantly expanded. The Securities and Futures Commission (SFC) announced plans to allow professional investors to trade virtual asset derivatives. Meanwhile, licensed exchanges and funds are permitted to offer staking services.

These developments reflect the clear intention of regulators to establish a more comprehensive and institution-friendly digital asset ecosystem in Hong Kong.

2.4. Singapore: Regulatory tightening between control and protection

In the second quarter, Singapore implemented significant tightening measures in cryptocurrency regulation. Most notably, the Monetary Authority of Singapore (MAS) has comprehensively prohibited unlicensed digital asset companies from operating overseas, indicating its firm opposition to regulatory arbitrage.

The new regulations apply to all entities providing digital asset services to global users in Singapore, effectively mandating the formal issuance of licenses. The environment has changed: simple business registration is no longer sufficient to maintain operations.

This change has put increasing pressure on local Web3 companies. These companies now face a binary choice - either to establish fully compliant operating entities or to consider relocating to more lenient jurisdictions. While this move aims to enhance market integrity and consumer protection, it is undeniable that its impact on early-stage and cross-border projects is limited.

2.5. China: The Internationalization of Digital Renminbi and Corporate Web3 Strategies

In the second quarter, China advanced the internationalization process of the digital renminbi, with Shanghai as the center of this work. The People's Bank of China announced plans to establish an international operation center in Shanghai to support the cross-border application of digital currency.

However, there is still a gap between official policy and actual operations. Although cryptocurrency has been banned nationwide, it has been reported that some local governments have liquidated seized digital assets to fill fiscal gaps. This indicates that the Chinese government has adopted a pragmatic approach that differs from its official stance.

Chinese companies are also demonstrating a similar pragmatic spirit. Some companies have started to follow the footsteps of Japanese firms by increasing their holdings in Bitcoin. Other companies are utilizing Hong Kong's licensing system to circumvent the restrictions on the mainland and enter the global Web3 market—effectively breaking through regulatory boundaries to participate in the digital asset economy.

Market interest in stablecoins pegged to the renminbi is also growing, especially in the latter half of this quarter. Concerns over the dominance of US dollar stablecoins and the depreciation of the renminbi have intensified, prompting these discussions.

On June 18, the governor of the People's Bank of China publicly elaborated on the vision of building a multipolar global currency system, hinting at an open attitude towards issuing stablecoins. In July, the Shanghai State-owned Assets Supervision and Administration Commission initiated discussions on the development of a stablecoin linked to the renminbi.

2.6. Vietnam: Legalization of Cryptocurrencies and Strengthening Digital Control

Vietnam officially announced the legalization of cryptocurrency in the second quarter, marking a significant policy shift. On June 14, the Vietnamese National Assembly passed the "Digital Technology Industry Law," which recognizes digital assets and outlines incentives for areas such as artificial intelligence, semiconductors, and digital infrastructure.

This marks a historic reversal of Vietnam's ban on cryptocurrency, positioning the country as a potential catalyst for the widespread adoption of cryptocurrency in the Southeast Asian region. Given Vietnam's previous restrictive stance, this move signifies a significant shift in the region's cryptocurrency policy.

At the same time, the government has strengthened its control over digital platforms. Authorities have ordered telecom operators to block a certain instant messaging application, citing that the app is suspected of being used for fraud, drug trafficking, and terrorist activities. A police report found that 68% of the 9,600 active channels on the app were related to illegal activities.

This dual approach—legalizing cryptocurrency while cracking down on digital abuse—reflects Vietnam's intention to allow innovation within a strictly monitored framework. While digital assets are now legally recognized, their use in illegal activities is facing harsher law enforcement actions.

2.7. Thailand: State-led Digital Asset Innovation

In the second quarter, Thailand promoted government-led initiatives in the digital asset sector. The Securities and Exchange Commission (SEC) of Thailand announced that it is reviewing a proposal to allow exchanges to list their own utility tokens—this is different from the previously strict listing rules and is expected to enhance the operational flexibility of the platforms.

It is worth noting that the Thai government has announced a plan to issue its own digital bonds. On July 25, Thailand will issue "G-Tokens" through an approved ICO platform, with a total issuance scale of 150 million USD. These tokens will not be usable for payment or speculative trading.

This initiative is a rare example of direct government involvement in the issuance of digital assets. Globally, Thailand's approach is considered an early model of tokenized financial digital innovation led by the public sector.

2.8. Philippines: Dual-track system of strict regulation and innovation sandbox

In the second quarter, the Philippines implemented a dual-track strategy that combines strengthening regulation with supporting innovation in the cryptocurrency sector. The government has implemented stricter controls on token listings, with regulatory authority shared between the central bank and the Securities and Exchange Commission (SEC). The registration and anti-money laundering compliance requirements for Virtual Asset Service Providers (VASP) have also been significantly relaxed.

A particularly striking initiative is the introduction of influencer regulation rules. Content creators promoting crypto assets must now register with the relevant authorities. Violations may result in penalties of up to five years in prison, making it one of the strictest enforcement regimes in the region.

In addition to these measures, the government has also launched a framework to promote innovation. The Securities and Exchange Commission ( SEC ) has begun accepting applications for "StratBox," a sandbox program designed to...