Q2 2025 Asia Web3 Market Review: Policy Implementation and Corporate Practices

Key Points Summary

• Regulation and Government: 1) Hong Kong will introduce stablecoin legislation in August to solidify its position as a digital financial center. 2) Singapore implements a strict licensing system prohibiting unlicensed companies from operating overseas. 3) Thailand launches G-Tokens, becoming the first country to issue government digital bonds.

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

• Policy Changes: 1) Stablecoins in South Korea have become an election issue, but regulatory fragmentation still exists. 2) Vietnam has achieved a historic transition from a ban to full legalization. 3) The Philippines is implementing a dual-track strategy, with strict regulation running parallel to a sandbox framework.

1. Overview of the Asia Web3 Market in the Second Quarter

Despite the shift of the Web3 market focus 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 is also an important hub for blockchain innovation.

In the first quarter of 2025, regulatory agencies across Asia will lay the groundwork by introducing new legislation, issuing licenses, and launching regulatory sandboxes. Efforts for cross-border cooperation will also begin 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, continuously improved, and implemented more effectively.

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

2. 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 in South Korea's presidential election in June. Candidates actively shared commitments related to Web3, and after Lee Jae-myung's victory, the market expects a significant shift in policy.

One of the core topics of the meeting is the launch of a stablecoin pegged to the Korean won. Related stocks have surged, and traditional financial institutions are also beginning to apply for Web3-related trademarks in hopes of entering the market.

However, there were some conflicts in the policy-making process, the most prominent of which was 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, the Democratic Party announced a delay of one to two months for 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 operating independently. Therefore, although the Korean won stablecoin has become a focus, specific regulatory guidance is still lacking.

Nevertheless, the gradual improvement at the institutional level 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 sales to be conducted in a manner that minimizes market impact.

Throughout the second quarter, interest in South Korea remained strong in the market. Global exchanges have shown continuous investment: one trading platform has completed the Travel Rule integration with two 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 greatly increased, and more international projects are even visiting Korea outside of large conferences. However, the rise of promotional events (which place more emphasis on giveaways rather than participation) has begun to exhaust local builders in Korea.

2.2 Japan: Institutions and enterprises drive the strategic expansion of Bitcoin

In the second quarter, Japanese listed companies have sparked a wave of Bitcoin adoption. This wave is primarily driven by one company, which achieved approximately 39 times the return after its first purchase of Bitcoin in April 2024. The performance of this company has become 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 well-known e-commerce platform has also started supporting XRP trading, significantly enhancing the accessibility of cryptocurrency on the platform (with over 20 million monthly active users).

As 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 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 phase, and so far, specific amendments are limited.

Retail investors' participation remains sluggish. Japanese retail investors traditionally tend to favor conservative strategies and remain cautious towards crypto assets. Therefore, even with new market participants entering, retail capital is unlikely to flow in immediately.

This contrasts sharply with markets like South Korea, where active retail participation directly facilitates 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, solidifying its position as a leading digital finance center in Asia. 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: Tightening regulation between control and protection

In the second quarter, Singapore took 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 sustain operations.

This change has brought increasing pressure on local Web3 companies. These companies now face a binary choice: either establish fully compliant operating entities or 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 renminbi, with Shanghai being 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 still exists a gap between official policy and actual operations. Although cryptocurrencies have been banned nationwide, it has been reported that some local governments (such as Jiangsu Province) 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 have also demonstrated a similar pragmatic spirit. Some logistics companies have begun to follow the lead of Japanese companies by increasing their holdings in Bitcoin. Other companies have utilized Hong Kong's licensing system to bypass restrictions in the mainland, entering the global Web3 market—effectively breaking through regulatory boundaries and participating in the digital asset economy.

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 are intensifying, sparking these discussions.

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

2.6 Vietnam: Legalization of Cryptocurrencies and Strengthening Digital Regulation

Vietnam officially announced the legalization of cryptocurrency in the second quarter, marking a significant policy shift. On June 14, the National Assembly of Vietnam passed the "Law on Digital Technology Industries," 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, making the country a potential catalyst for the widespread adoption of cryptocurrency in the Southeast Asia 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 strengthened its control over digital platforms. Authorities ordered telecom operators to block a certain instant messaging application, citing that the app was 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 strictly monitored framework. While digital assets are now legally recognized, their use for illegal activities is facing stricter law enforcement.

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 that allows exchanges to list their own utility tokens, which differs from the previously strict listing rules and is expected to enhance the operational flexibility of the platforms.

Notably, the Thai government has announced plans 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 regarded as 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 enhanced 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 the regulations could 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 U.S. Securities and Exchange Commission (SEC) has begun accepting applications for "StratBox," a sandbox program designed to support crypto service providers in a controlled regulatory environment.