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

Key Points Overview

• Regulatory Trends: Hong Kong will launch stablecoin legislation in August, Singapore is implementing a strict licensing system, and Thailand is issuing government digital bonds called G-Tokens.

• Corporate Activities: Japanese listed companies are igniting a Bitcoin investment boom, while Chinese companies are engaging in overseas Web3 businesses through Hong Kong licenses.

• Policy Changes: Discussions on a won-backed stablecoin have emerged in South Korea, Vietnam has achieved the legalization of cryptocurrencies, and the Philippines has adopted a strategy that balances regulation and innovation.

Asia's Web3 Market in Q2: Stabilizing Regulations and Growing Corporate Investment

Although the focus of the Web3 market is shifting towards the United States, the development of major markets in Asia is still worth paying attention to. As the largest cryptocurrency user base in the world and an important center for blockchain innovation, Asia plays a key role in the Web3 space.

In the first quarter of 2025, regulatory agencies across Asia laid the groundwork by introducing new regulations, issuing licenses, and launching regulatory sandboxes. In the second quarter, these regulatory foundations facilitated substantial business activities and accelerated capital allocation. The policies launched in the first quarter were tested in the market, continuously refined, 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 one by one and assess how policy changes affect the broader global Web3 ecosystem.

Overview of Major Market Development in Asia

South Korea: Intersection of Political Reform and Regulatory Adjustments

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 the market expects significant policy changes following Lee Jae-myung's victory.

One of the core topics of the conference is the launch of a stablecoin pegged to the Korean won. Related stocks surged, and traditional financial institutions have also started applying for Web3-related trademarks.

However, there have been some conflicts in the policy-making process, most notably the debate over jurisdiction between the Bank of Korea and the Financial Services Commission (FSC). The 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 clear lead policymakers appears to be a major bottleneck, with negotiations between departments still operating independently. Therefore, despite the focus on the Korean won stablecoin, 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 settlement. The rule also requires 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 shown ongoing commitment: a certain trading platform's Korean branch has completed the Travel Rule integration with two major local 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 increased dramatically, with more and more international projects visiting South Korea even outside of large conferences. However, the rise of promotional events (which focus more on giveaways than on participation) has left local builders in South Korea feeling fatigued.

Japan: Institutions and enterprises drive Bitcoin strategic expansion

In the second quarter, Japanese listed companies have launched a wave of Bitcoin adoption. This wave was mainly driven by a certain company, which achieved approximately 39 times the return after purchasing Bitcoin for the first time 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 financial group has begun collaborating with blockchain companies to prepare for the issuance of stablecoins. In addition, the cryptocurrency subsidiary of a certain e-commerce platform 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. 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 business operations; the second type refers to general crypto assets. However, these regulatory updates are mostly still in the discussion phase, and so far, specific amendments have been limited.

Retail investor participation remains sluggish. Japanese retail investors traditionally tend to adopt conservative strategies and are still cautious towards 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 boosts early liquidity for new projects. In Japan, an institution-led investment model provides greater stability but may limit short-term growth momentum.

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 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. The licensing system for stablecoin issuers is expected to 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 watching.

The scope of digital financial services has also significantly expanded. The Securities and Futures Commission (SFC) announced plans to allow professional investors to engage in virtual asset derivatives trading. 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.

Singapore: Regulatory tightening 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 banned unlicensed digital asset companies from 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 operational 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.

China: Internationalization of Digital Renminbi and Corporate Web3 Strategy

In the second quarter, China promoted 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 operations center in Shanghai to support the cross-border application of digital currency.

However, there is still a gap between official policies and actual operations. Although cryptocurrencies have 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 government has adopted a pragmatic approach that differs from its official stance.

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

Interest in stablecoins pegged to the Chinese yuan is also growing, especially in the latter half of this quarter. Concerns over the dominance of USD stablecoins and the depreciation of the yuan have intensified, sparking these discussions.

On June 18, the Governor of the People's Bank of China publicly elaborated on 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 research and development of a stablecoin pegged to the renminbi.

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 "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, making the country a potential catalyst for the widespread adoption of cryptocurrency in Southeast Asia. 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 app's 9,600 active channels are 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 scope. While digital assets are now legally recognized, actions involving their use for illegal activities are facing tougher law enforcement.

Thailand: State-led digital asset innovation

In the second quarter, Thailand pushed forward 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—this is different from the previously strict listing rules and is expected to enhance the operational flexibility of the platforms.

It is noteworthy that 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 USD. These tokens will not be used for payments or speculative trading.

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

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 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 begun accepting applications for "StratBox," a sandbox program designed to support crypto service providers in a controlled regulatory environment.