In the rapidly evolving world of cryptocurrencies, jurisdictions like Hong Kong, Singapore, and Dubai are vying to become the go-to destinations for crypto businesses.

As a solutions provider that builds white-label crypto exchanges, wallets, and other platforms for clients, we acknowledge that there are pros and cons with each of these jurisdictions.

Below, we dig into what each city has to offer for aspiring crypto exchanges.

Hong Kong: A Rapidly Emerging Crypto Hub

As an international hub for traditional financial services, it only makes sense that Hong Kong be an attractive place for one to set up a crypto business.

That being said, existing regulatory frameworks have been more focused on catering to institutional and professional investors, and critics have pointed to the low number of crypto exchange licenses granted in the jurisdiction.

In 2023, the Securities and Futures Commission (SFC) introduced a new licensing regime, allowing licensed exchanges to offer trading services to both professional and retail investors, though retail investors can only invest in non-security tokens. This means that while they can invest in popular crypto assets such as Bitcoin or Ethereum, they cannot invest in tokenized securities that reflect the value of traditional security assets.

Currently only ten licensed exchanges are operating in Hong Kong, though it appears that more licenses may be granted this year. Crypto exchanges must possess Type 1 and 7 licenses to operate, and must adhere to strict AML/KYC, custody, and audit requirements, as well as abstain from providing leveraged trading and futures for retail investors.

In general, licensing, capital, and compliance costs are considered high, and there are a limited number of banks that are willing to work with crypto companies, though this appears to be changing. The Hong Kong arms of Bank of Communications, Bank of China and Shanghai Pudong Development Bank have started offering banking services to local crypto firms; fintech bank ZA Bank also started offering conversion and settlement services in 2023.

The SFC's new ASPIRe framework, announced in February 2025, aims to take Hong Kong's virtual asset industry to the next level, emphasizing robust regulatory oversight and compliance measures and pledging to establish licensing regimes for OTC trading, crypto custody, and more. A new stablecoin bill up for debate and expected to pass this year will also establish a regulatory framework for stablecoin issuers, who are expected to work closely with the Hong Kong Monetary Authority.

In short, it looks like Hong Kong is taking steps to become more competitive in the industry and attract more crypto players.

Singapore: Strong Banking Access with High Compliance Costs

To operate a crypto exchange in Singapore, companies must obtain a license from the Monetary Authority of Singapore (MAS) under the Payment Services Act (PSA) 2019. This act requires exchanges to register as either a Standard Payment Institution (SPI) or a Major Payment Institution (MPI), depending on the scale of their operations.

Both licenses allow for the exchange of fiat currencies and cryptocurrencies, but place limits on derivatives trading and differ in terms of capital requirements and transaction limits. For instance, a Standard Payment Institution requires a minimum paid-up capital of SGD 100,000, while a Major Payment Institution needs SGD 250,000.

One of the advantages of setting up an exchange in Singapore is the access to banking services; banks are more open to providing services for exchanges, and this is essential for facilitating fiat-to-crypto transactions. Of course, exchanges must implement robust anti-money laundering (AML) and combat the financing of terrorism (CFT) measures to ensure compliance with regulatory standards.

Setting up a crypto exchange in Singapore involves significant costs and regulatory requirements. The licensing application fee ranges from SGD 1,000 to SGD 1,500, and overall setup costs can vary widely, typically between SGD 30,000 to SGD 300,000, depending on the complexity of the operation and compliance needs.

Companies must prepare detailed business plans, AML policies, and risk assessments as part of the regulatory filing process. The process of obtaining a license can take several months, emphasizing the need for thorough preparation and compliance with MAS guidelines to ensure a successful application.

Dubai: A Pro-Crypto Haven with Fast-Track Approaches

Dubai has emerged as a leading destination for cryptocurrency businesses due to its progressive regulations and government support for blockchain and digital assets. To operate a crypto exchange in Dubai, companies must obtain a VASP license from the Virtual Asset Regulatory Authority (VARA), which takes 3-6 months. This timeline is relatively shorter than the application processes for Hong Kong and Singapore.

This license allows businesses to facilitate buying, selling, and trading of cryptocurrencies within the UAE, ensuring compliance with global financial standards, anti-money laundering (AML) policies, and cybersecurity laws.That being said, compliance requirements are lower than those of Hong Kong and Singapore, with lower costs and even better access to local banking services.

Additionally, this particular license is unique in that it enables exchanges to offer regulated derivatives trading; late last year, leading options exchange Deribit announced plans to move all of its spot and derivatives trading services to Dubai. This explains why exchanges from around the world are flocking to Dubai to set up local entities.

To set up a crypto exchange in Dubai, businesses must register a legal entity and choose a jurisdiction, either in a free zone or on the mainland. The minimum authorized capital for a crypto business in Dubai is typically around $13,600, though specific requirements can vary depending on the jurisdiction and type of license.

The cost of obtaining a crypto exchange license includes application fees, annual fees, and other operational expenses, which can range from tens of thousands to hundreds of thousands of dollars. Businesses must also comply with AML/KYC regulations and maintain robust security measures to protect customer data and assets.

Conclusion

In conclusion, each jurisdiction offers unique advantages tailored to different business needs. Hong Kong has thus far focused on catering to institutional and professional crypto investors, though regulators appear to be rolling out more clear regulatory frameworks to attract businesses. Singapore provides strong banking access but requires significant compliance investment, and Dubai offers a flexible and pro-crypto environment perfect for startups and innovators.

As the crypto landscape continues to evolve, understanding these differences will be crucial for businesses looking to establish a presence in these regions. If you're interested in launching a crypto business in any of these jurisdictions, contact us here and we'll see how we can help!