Q2 2025 Asia Web3 Market Review: Policy Implementation and Practical Progress

Key Points Summary

• Regulation and Government: 1) Hong Kong will introduce stablecoin legislation in August to consolidate its position as a digital financial hub. 2) Singapore has implemented a strict licensing system prohibiting unlicensed companies from operating overseas. 3) Thailand has launched government-issued digital bonds, G-Tokens, becoming a pioneer in this field.

• Corporate Dynamics: 1) Japanese listed companies are driving a wave of Bitcoin funding strategies, leading to a surge in institutional investment. 2) Chinese companies are taking a pragmatic approach by bypassing domestic restrictions through Hong Kong licenses to increase their Bitcoin holdings.

• Policy Shift: 1) There is a growing support for a stablecoin pegged to the Korean Won in South Korea, but progress is slow due to fragmented regulation. 2) Vietnam has achieved a historic shift from prohibition to full legalization. 3) The Philippines is implementing a dual-track strategy, combining strict regulation with a sandbox framework.

1. Asia's Web3 Market in Q2: Regulatory Stabilization and Increased Corporate Investment

Although the focus of the Web3 market has clearly shifted to the United States, the development of major markets in Asia is still worth paying attention to. Asia not only has the largest cryptocurrency user base in the world but also remains a core hub for blockchain innovation.

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

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

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

2. Main Development Status of Major Markets in Asia

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 with Lee Jae-myung's victory, the market anticipates a significant shift in policy.

One of the key topics of the conference is the launch of a stablecoin pegged to the Korean won. Related stocks surged significantly, and traditional financial institutions have also begun applying for Web3-related trademarks in hopes of entering the market.

However, some conflicts have emerged in the policy-making process, most notably the debate over jurisdiction between the Bank of Korea and the Financial Services Commission (FSC). 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 in the introduction of the "Digital Asset Innovation Act." The lack of a clear leading policymaker seems to be a major bottleneck, and negotiations between departments are still fragmented. Therefore, although the Korean won stablecoin has become a focal point, specific regulatory guidance is still 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 crypto 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 Korean market remained strong. Global exchanges have continued to demonstrate ongoing investment: one trading platform has completed the Travel Rule integration with two major exchanges, while another trading platform has indicated plans to return to the Korean market after meeting regulatory standards.

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

2.2. Japan: Adoption by institutions and businesses 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 saw approximately 39 times returns after its first Bitcoin purchase in April 2024. The performance of this company set 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 a major e-commerce giant has also started supporting XRP transactions, significantly enhancing the accessibility of cryptocurrencies on the platform (with over 20 million monthly active users).

As the initiatives from the private sector continue to advance, regulatory discussions are also ongoing. The Financial Services Agency (FSA) of Japan has introduced a new classification system that categorizes crypto assets into two types: the first type includes tokens used for financing or commercial operations; the second type refers to general crypto assets. However, most of these regulatory updates are still in the discussion stage, and so far, specific modifications have been limited.

Retail investor participation remains sluggish. Japanese retail investors traditionally lean towards conservative strategies and maintain a cautious attitude towards crypto assets. Therefore, even with new market participants coming in, retail capital is unlikely to flow in immediately.

This stands in sharp contrast to markets like South Korea, where active retail participation directly promotes early liquidity for new projects. In Japan, an institution-led investment model offers 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 finance hub. 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 watching.

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 took significant tightening measures regarding cryptocurrency regulation. Most notably, the Monetary Authority of Singapore (MAS) has imposed a comprehensive ban on unlicensed digital asset companies operating overseas, indicating its strong 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: Internationalization of Digital Renminbi and Corporate Web3 Strategy

In the second quarter, China advanced the internationalization process of the digital yuan, 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 operation. Although cryptocurrency has been banned nationwide, it has been reported that some local governments have liquidated confiscated digital assets to make up for budget shortfalls. 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 logistics companies have begun to follow in the footsteps of Japanese enterprises by increasing their Bitcoin holdings. Other companies are using Hong Kong's licensing system to circumvent restrictions in the mainland and enter the global Web3 market—effectively breaking through regulatory boundaries and participating in the digital asset economy.

The market's interest in stablecoins pegged to the Renminbi is also growing, especially in the latter half of this quarter. Concerns over the dominance of USD stablecoins and the depreciation of the Renminbi have intensified, sparking these discussions.

On June 18, the Governor of the People's Bank of China publicly articulated the vision for building a multipolar global monetary system, suggesting an open attitude towards the issuance of stablecoins. In July, the Shanghai State-owned Assets Supervision and Administration Commission initiated discussions on the research and development of a stablecoin pegged to the Renminbi.

2.6. Vietnam: Legalization of Cryptocurrency and Strengthening Digital Regulation

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

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

At the same time, the government has tightened its control over digital platforms. Authorities have ordered telecommunications 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 cryptocurrencies while cracking down on digital abuse—reflects Vietnam's intention to allow innovation within a tightly monitored framework. While digital assets are now legally recognized, activities involving their use for illegal purposes are facing stricter enforcement.

2.7. Thailand: State-led Digital Asset Innovation

In the second quarter, Thailand advanced government-led initiatives in the digital asset sector. The Securities and Exchange Commission (SEC) of Thailand announced that it is reviewing a proposal that would 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.

Notably, 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. These tokens will not be available 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 public sector-led tokenized financial digital innovation.

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 strengthened regulation with support for innovation in the cryptocurrency sector. The government has imposed stricter controls on token listings, with regulatory authority shared between the central bank and the U.S. Securities and Exchange Commission (SEC). 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. Violating these regulations could lead to penalties of up to five years in prison, making it one of the strictest enforcement regimes in the region.

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