Overview of the Asian Web3 Market in Q2 2025: Policy Implementation and Practical Advancement

Key Points Overview

• Regulatory Trends: 1) Hong Kong plans to launch stablecoin legislation in August to solidify its status as a digital financial hub. 2) Singapore implements a strict licensing system to restrict unlicensed companies from conducting overseas business. 3) Thailand introduces government digital bonds G-Tokens, setting a precedent.

• Corporate News: 1) Japanese listed companies are igniting a Bitcoin investment boom, driving growth in institutional investment. 2) Chinese companies are adopting pragmatic strategies to participate in the global Web3 market through Hong Kong licenses while increasing their Bitcoin holdings.

• Policy Changes: 1) South Korea is exploring the issuance of a won-backed stablecoin, but the issue of fragmented regulation remains. 2) Vietnam has transitioned from banning cryptocurrency to comprehensive legalization. 3) The Philippines adopts a dual-track strategy, with strict regulation running parallel to an innovation sandbox.

1. Overview of the Asian Web3 Market in Q2: Regulatory Stability Gradually Increasing, Corporate Investments Continuing to Rise

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 is also an important hub for blockchain innovation.

In the first quarter of 2025, regulatory agencies across Asia established a foundation, including the introduction of new legislation, issuance of licenses, and the launch of 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, prompting continuous improvements for better implementation.

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

2. Important Developments in Major Asian Markets

2.1 South Korea: The Intersection of Political Reform and Regulatory Adjustment

In the second quarter, cryptocurrency policies became a hot topic ahead of the presidential election in South Korea in June. Candidates actively shared commitments related to Web3, and with the election of a new president, the market anticipates a significant shift in policies.

One of the core topics of the meeting is the launch of a stablecoin pegged to the Korean Won. Related company stocks have surged, and traditional financial institutions are also starting to apply for Web3-related trademarks in order to enter the market.

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

In July, the ruling party announced that the introduction of the "Digital Asset Innovation Act" would be postponed by one to two months. The lack of clear leading policymakers seems to be a major bottleneck, and coordination among departments still needs to be strengthened. Although the Korean won stablecoin has become a focal point, 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 cryptocurrency assets and permitted immediate liquidation. The rule also requires sales to be conducted in a manner that minimizes market impact.

Throughout the second quarter, interest in South Korea remains strong in the market. Global exchanges are showing continued investment: a certain trading platform's South Korean subsidiary has completed the integration of the Travel Rule with major local exchanges, while another international trading platform has stated its plans to return to the South Korean market after meeting regulatory standards.

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

2.2 Japan: Institutions and enterprises adopting strategies to promote Bitcoin expansion

In the second quarter, Japanese listed companies experienced a wave of Bitcoin adoption. This wave was primarily driven by one company, which achieved about 39 times its return after making its first Bitcoin purchase in April 2024. Its performance 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 a blockchain development company to prepare for the issuance of stablecoins. In addition, the cryptocurrency subsidiary of a well-known e-commerce platform has also started supporting XRP transactions, significantly enhancing the accessibility of cryptocurrencies on the platform (which has over 20 million monthly active users).

As initiatives in 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 specific modifications have been limited so far.

Retail investor participation remains sluggish. Japanese retail investors traditionally tend to adopt conservative strategies and maintain a cautious attitude 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 promotes early liquidity for new projects. In Japan, the 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 batch of regulated stablecoins is 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 expanded significantly. 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 imposed a comprehensive ban on unlicensed digital asset companies conducting business 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: a simple business registration is no longer sufficient to sustain 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 Enterprise 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 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 local governments have adopted a pragmatic approach that differs from the official stance.

Chinese companies are also showing a similar pragmatic spirit. Some companies have begun to follow in the footsteps of Japanese enterprises by increasing their holdings of Bitcoin. Other companies are utilizing Hong Kong's licensing system to bypass restrictions on the mainland and enter the global Web3 market—effectively breaking through regulatory boundaries and participating 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, 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, hinting at 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 cryptocurrency in the second quarter, marking a significant policy shift. On June 14, the National Assembly of Vietnam 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 cryptocurrency ban, making the country a potential catalyst for the widespread adoption of cryptocurrencies 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 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, actions related to their use for illegal activities are facing harsher 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 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.

What's more noteworthy is that the Thai government announced plans to issue digital bonds for its own currency. 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 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. Violating these 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 Securities and Exchange Commission ( SEC ) has started accepting applications for "StratBox", which is a sandbox.