Overview of the Web3 Market in Asia for Q2 2025: Policy Implementation and Practical Progress

Key Points Overview

• Regulation and Policy: 1) Hong Kong will launch stablecoin regulations in August to strengthen its position as a digital financial center. 2) A certain country has implemented a strict licensing system, limiting unlicensed companies' overseas operations. 3) A certain country has introduced government digital bonds, becoming a pioneer in this field.

• Corporate News: 1) Japanese listed companies are initiating a Bitcoin investment boom, leading to increased institutional participation. 2) Chinese companies are adopting pragmatic strategies to participate in the global Web3 market through overseas licenses.

• Policy Evolution: 1) South Korea's stablecoin policy has experienced fluctuations due to elections. 2) A certain country has transitioned its cryptocurrency policy from prohibition to legalization. 3) A certain country has adopted a dual-track strategy, balancing strict regulation with innovation.

1. Overview of the Asian Web3 Market in the Second Quarter: Stable Regulations and Increased Corporate Investment

Although the focus of the Web3 market has shifted to the United States, the development of major markets in Asia is still worthy of attention. 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, regulators across Asia laid the groundwork by introducing new regulations, issuing licenses, and launching regulatory sandboxes. In the second quarter, these policies 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 concretely.

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 the impact of policy changes on the global Web3 ecosystem.

2. Development Trends in Major Asian Markets

2.1 South Korea: Intertwining Political Reforms 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 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 Korean won stablecoin. Related stocks have surged, and traditional financial institutions are also beginning to apply for Web3-related trademarks.

However, there are some conflicts in the policy-making process, the most prominent being the jurisdictional dispute between the central bank and the Financial Services Commission (FSC). The central bank advocates for early involvement in the approval process, incorporating stablecoins into a broader digital currency ecosystem.

In July, the ruling party announced a delay in the implementation of the "Digital Asset Innovation Law." The lack of a clear policy maker has become a bottleneck, and negotiations between departments remain fragmented. 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 ongoing. In June, new regulations allowed non-profit organizations and exchanges to sell donated crypto assets and settle immediately, requiring this to be done in a way that minimizes market impact.

Throughout the second quarter, interest in South Korea remained strong in the market. Global exchanges demonstrated sustained investment: one platform has completed the integration of travel rules with a major local exchange, while another stated plans to return to the South Korean market after meeting regulatory requirements.

Offline events have significantly rebounded. Compared to last year, the number of meetups has increased dramatically, with more and more international projects visiting Korea outside of large conferences. However, the rise of promotion-focused activities has left local developers in Korea feeling fatigued.

2.2 Japan: Institutions and enterprises adopt strategies to promote the expansion of Bitcoin.

In the second quarter, Japanese listed companies initiated a wave of Bitcoin adoption. This wave was primarily driven by a certain company, which achieved about a 39-fold return after its first purchase of Bitcoin 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 certain financial group has begun collaborating with blockchain companies to prepare for the issuance of stablecoins. In addition, a 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 from the private sector advance, regulatory discussions continue to unfold. Financial regulatory agencies have introduced a new classification system that divides crypto assets into two categories: the first category includes tokens used for financing or commercial operations; the second category refers to general crypto assets. However, most of these regulatory updates are still in the discussion phase, with limited specific amendments.

Retail investor participation remains sluggish. Japanese retail investors traditionally favor conservative strategies and are still cautious about 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 promotes early liquidity for new projects. In Japan, an institution-led investment model offers 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 a leading digital financial center in Asia. Regulators announced that the new stablecoin regulatory legislation will come into effect on August 1. It is expected that the licensing system for stablecoin issuers will be established 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 regulatory sandbox are expected to become pioneers, and their progress is worth paying attention to.

The scope of digital financial services has significantly expanded. Regulators have announced plans to allow professional investors to trade virtual asset derivatives. At the same time, licensed exchanges and funds are authorized to provide 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 A certain country: Tightening of regulation between control and protection

In the second quarter, a certain country took significant tightening measures regarding cryptocurrency regulation. Most notably, regulators completely banned unlicensed digital asset companies from conducting business overseas, indicating their strong opposition to regulatory arbitrage.

The new regulations apply to all entities providing digital asset services to global users in the country, 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 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 and cross-border projects is limited.

2.5 China: The Internationalization of Digital Renminbi and Enterprise Web3 Strategy

In the second quarter, China advanced the internationalization process of the digital renminbi, with Shanghai being the center of this work. The central bank 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 policies and actual operations. Although cryptocurrency has been banned nationwide, it has been reported that some local governments have liquidated confiscated digital assets to make up for fiscal shortfalls. This indicates that the government has adopted a pragmatic approach that differs from its official stance.

Chinese companies have also demonstrated a similar pragmatic spirit. Certain logistics groups and other companies have begun to follow the footsteps of Japanese enterprises by increasing their holdings in Bitcoin. Other companies have taken advantage of Hong Kong's licensing system to bypass mainland restrictions and enter the global Web3 market—effectively breaking through regulatory boundaries to participate in the digital asset economy.

Interest in the renminbi stablecoin is also growing in the market, especially in the latter half of this quarter. Concerns about the dominance of the US dollar stablecoin and the depreciation of the renminbi have intensified, triggering these discussions.

On June 18, the central bank governor publicly articulated 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 development of a renminbi stablecoin.

2.6 A certain country: Legalization of cryptocurrency and strengthening digital regulation

A certain country officially announced the legalization of cryptocurrency in the second quarter, marking a significant policy shift. On June 14, the Congress passed the "Digital Technology Industry Act", which recognizes digital assets and outlines incentives for fields such as artificial intelligence, semiconductors, and digital infrastructure.

This marks a historic reversal of the country's ban on cryptocurrencies, making it a potential catalyst for the widespread adoption of cryptocurrencies in the Southeast Asian region. Given the previous restrictive stance, this move signifies a major adjustment 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 9,600 active channels on the app were related to illegal activities.

This dual approach - legalizing cryptocurrencies while cracking down on digital abuses - reflects the country's intention to allow innovation within a strictly monitored framework. While digital assets are now legally recognized, their use for illegal activities is facing harsher law enforcement actions.

2.7 Certain Country: State-led Digital Asset Innovation

In the second quarter, a certain country promoted government-led initiatives in the digital asset sector. Regulatory agencies announced they are reviewing a proposal that allows exchanges to list their own utility tokens—this differs from the previous strict listing rules and is expected to enhance the operational flexibility of the platforms.

It is worth noting that the government of the country has announced plans to issue its own digital bonds. On July 25, "G-Tokens" will be issued through an approved ICO platform, with a total issuance size 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, the country's approach can be regarded as an early model of tokenized financial digital innovation led by the public sector.

2.8 A certain country: Dual track system of strict regulation and innovation sandbox

In the second quarter, a certain country implemented a dual-track strategy that combines strengthening regulation with supporting 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). 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. Violations of 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 SEC has begun accepting applications for "StratBox", a sandbox program designed to support crypto service providers in a controlled regulatory environment.