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 strengthen its position as a digital financial center. 2) Singapore implements a strict licensing system, prohibiting unlicensed companies from conducting business overseas. 3) Thailand launches G-Tokens, becoming the first country to issue government-issued digital bonds.

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

• Policy Shifts: 1) A stablecoin agenda backed by the Korean Won emerged after the South Korean elections, but regulatory fragmentation remains. 2) Vietnam has achieved a historic transition from a ban to full legalization. 3) The Philippines is implementing a dual-track strategy that combines 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 noting. Asia not only has the world's largest cryptocurrency user base but also remains a core hub for blockchain innovation.

In the first quarter of 2025, regulators 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 continuous improvement and more practical implementation.

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

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

One of the core 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 to apply for Web3-related trademarks in hopes of entering the market.

However, some conflicts have arisen during the policy-making process, the most prominent of which is the debate over jurisdiction 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 of this year, the Democratic Party announced a delay of one to two months in the release of the "Digital Asset Innovation Act." The lack of clear lead policymakers seems to be a major bottleneck, and negotiations among departments remain disjointed. Therefore, although the Korean won stablecoin has become the focus, specific regulatory guidance is still lacking.

Nevertheless, the gradual improvement of 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 rule also requires 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 shown continued investment: a certain cryptocurrency platform has completed Travel Rule integration with two major South Korean exchanges, while another exchange has expressed 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, and more and more international projects are even visiting South 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 exhausted.

2.2. Japan: Institutional and Corporate Adoption Drives 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 company's 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 started collaborating with blockchain companies to prepare for the issuance of stablecoins. In addition, the cryptocurrency subsidiary of a certain e-commerce platform has also begun 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 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, most of these regulatory updates are still in the discussion stage, and specific amendments have been limited so far.

Retail investor participation remains sluggish. Japanese retail investors traditionally tend to adopt conservative strategies and remain 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 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 enhanced 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 come into 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 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 intent 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 in cryptocurrency regulation. Most notably, the Monetary Authority of Singapore (MAS) has fully prohibited 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: 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 and cross-border projects is limited.

2.5. China: Internationalization of Digital RMB and Corporate Web3 Strategy

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 operating center in Shanghai to support the cross-border application of digital currency.

However, there is still a gap between official policy and actual practice. Although cryptocurrency has 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 firms have begun to follow in the footsteps of Japanese companies by increasing their holdings of Bitcoin. Other companies have utilized Hong Kong's licensing system to circumvent 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, Pan Gongsheng, the governor of the People's Bank of China, publicly elaborated on the vision of building a multipolar global currency 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 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 ban on cryptocurrencies, 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 shift 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 Telegram, 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 are 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 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 allowing exchanges to list their own utility tokens—this differs 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 available for payment or speculative trading.

This initiative is a rare example of government directly participating 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.

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 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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