Introduction
Over the summer, I spent weeks on the ground across Asia—meeting investors, founders, and LPs in markets from Shanghai to Hong Kong to Singapore. Each city offered a different lens: Shanghai’s AI passion, Hong Kong’s stablecoin momentum, and Singapore’s measured institutional caution.
These conversations gave me a firsthand view of how institutions are approaching crypto today—the questions they ask, the hesitations they hold, and the genuine opportunities they see. Beyond the headlines, what stood out most were the unique challenges and opportunities shaping adoption across the region.
Key Themes from the Road
1. Tokenization: The Common Language
Across every meeting, stablecoins and RWAs came up, spurred by the institutional push in the West and ongoing momentum from the Trump administration. Even traditional players and corporates in Asia are now exploring their potential.
That said, much of the activity is still driven by hype and short-term optimism. In reality, adoption will take time, with inevitable ups and downs. Significant infrastructure gaps, liquidity fragmentation, and real use cases must be addressed before tokenization can scale. Simply tokenizing an illiquid asset doesn’t create liquidity by itself—demand and standards must come first.
The bigger challenge is education: helping institutions understand what these tools can and cannot do, and preparing for the operational complexities of tokenization—from compliance and custody to valuation and settlement.
2. GP and LP Preference for More Liquid Investments
Compared to the U.S., Asia’s investor ecosystem has been more selective on venture allocations, with both GPs and LPs leaning toward liquid strategies, OTC flows, and DATs (Digital Asset Treasuries). This reflects a preference for quicker liquidity, especially given extended venture vesting schedules.
Another factor is the investor base itself. Asia still lacks the depth of institutional allocators—such as large fund-of-funds, endowments, and other permanent capital pools—that anchor long-term venture commitments in the U.S. This gap has pushed capital toward shorter-duration products but also creates an opportunity for managers to help institutionalize the region’s LP base.
As a result, venture deal activity has been quieter. But this isn’t a weakness—it reflects local market priorities. It also creates space for differentiated managers to re-introduce long-term venture strategies, especially those bridging Western innovation with Asia’s growing institutional landscape and talent base.
3. Emerging Markets Opening Fast
Beyond Hong Kong and Singapore, markets like Vietnam are quickly emerging as hotspots for crypto adoption. Trading activity is high, mobile-first behavior dominates, and youthful demographics are driving these markets forward at speed.
These ecosystems are still early, and regulatory frameworks uneven, but their growth trajectory is steep. What they lack in institutional depth, they make up for in adoption velocity—creating unique opportunities for first movers and early investors.
Market Snapshots
Hong Kong
Hong Kong has taken a decisive step forward with the passage of its Stablecoin Ordinance in May 2025, which came into effect on August 1. The law sets out one of the most comprehensive licensing regimes globally, requiring issuers to maintain fully backed reserves, guarantee redemption rights, and meet strict risk controls. Alongside this, the Hong Kong Monetary Authority (HKMA) launched a sandbox for stablecoin issuers, drawing participants including Standard Chartered, Animoca Brands, Hong Kong Telecom (HKT), and JD Coinlink.
These moves position Hong Kong as a potential hub for regulated stablecoin activity, but the approach remains highly conservative. Every stablecoin transaction requires full KYC, even for unhosted wallets. This reassures regulators and institutions but undermines the frictionless appeal that made stablecoins popular in the first place. The HKMA has also signaled that only a handful of licenses will be granted initially, keeping the market small and tightly controlled.
Given Hong Kong’s limited domestic scale, success will depend on cross-border use cases—from RMB/HKD settlement corridors to enterprise payment networks. For institutions, this compliance-first approach is a feature, not a drawback, and positions Hong Kong as a testbed for regulated adoption that could influence broader regional frameworks.
Singapore
Singapore continues to project itself as the “Switzerland of Asia”—a trusted, neutral hub for institutional finance. This year, MAS reinforced that positioning with a June 30, 2025 deadline: Singapore-incorporated firms serving only overseas clients must either obtain a DTSP license under FSMA or shut down, with no grace period.
These rules reflect Singapore’s compliance-first philosophy. While MAS still supports enterprise adoption, custody solutions, and institutional infrastructure, it has made it clear that regulatory arbitrage isn’t welcome.
Institutional allocators in Singapore are typically methodical and data-driven. They may move slower than their Hong Kong counterparts, but once trust is earned, commitments are durable and long-term. Singapore’s domestic market is modest, but its strategic strength lies in its regional role—as both a meeting place for global investors and a gateway into Southeast Asia. The focus is less about hype and more about building finance-grade infrastructure with credibility.
South Korea
South Korea is undergoing a major regulatory shift, moving from one of Asia’s most restrictive environments to a more open stance for institutions. In 2025, the Financial Services Commission (FSC) lifted its long-standing ban, now allowing non-profits, listed companies, universities, and professional investors to trade cryptocurrencies under regulated conditions.
A roadmap has also been set for spot Bitcoin ETFs, which could provide institutions and retail investors a trusted way to gain exposure once approved. Meanwhile, Bitplanet (formerly SGA) made headlines in August 2025 by launching the country’s first institutional Bitcoin treasury allocation, deploying US$40 million into BTC reserves—signaling rising legitimacy for corporate balance-sheet adoption.
The next battleground is Won-based stablecoins. Lawmakers are pushing for a relatively open issuance framework, but the Bank of Korea favors a gradual, bank-led rollout, warning of systemic risks. This tug-of-war will shape how quickly adoption unfolds.
South Korea is on the cusp of institutional mainstreaming. ETFs, treasuries, and stablecoins are entering the conversation, and firms that align early with evolving custody and compliance requirements will have a first-mover edge.
Japan
Japan’s approach to digital assets is methodical and policy-driven, anchored by clear regulation and government-led pilots. The Financial Services Agency (FSA) has expanded rules for security token offerings (STOs) and allowed trust banks to custody digital assets, giving institutions a defined path to participate.
Financial groups like MUFG, SBI, and Nomura are piloting tokenized bonds, funds, and settlement systems, while MUFG Trust’s Progmat platform has launched yen-linked stablecoins under Japan’s 2023 stablecoin law. The country also continues to raise its profile as a regional convening point, with the recent WebX 2025 event in Tokyo underscoring Japan’s global relevance.
Progress remains slow but steady. Japan is unlikely to produce breakout consumer-facing crypto products in the near term, but it is building the foundation for a durable, institutional-grade tokenization ecosystem with long-term credibility.
Southeast Asia
Vietnam is one of the region’s most dynamic retail crypto markets, with trading deeply integrated into daily life. Anecdotally, more than 80% of young people are aware of crypto—and many actively trade or hold it.
Earlier this year, Vietnam’s National Assembly passed the Digital Technology Industry Law, set to take effect on January 1, 2026. This landmark legislation officially recognizes crypto assets, introduces licensing and tax incentives for blockchain startups, and creates regulatory clarity around digital ownership and exchange operations. As part of this effort, the country is also launching its first state-backed crypto exchange, slated to go live in 2026.
With low living costs, lean startup dynamics, and high crypto penetration, Vietnam offers fertile ground for founders looking to scale regionally.
Elsewhere, Thailand has introduced a five-year capital gains tax exemption for licensed crypto trading. In Malaysia, regulators have licensed over a dozen digital asset operators—strengthening infrastructure for exchanges, custody, and tokenization. Frameworks are still evolving, but these markets are early and fast-moving, with adoption fueled by youthful demographics, mobile-first behavior, and supportive policies.
They may lack deep institutional infrastructure today, but their adoption velocity creates singular opportunities—especially for investors who can provide capital, compliance expertise, and cross-border reach to help founders scale internationally.
Closing Thoughts
Institutional adoption in Asia is moving from exploration to selective deployment. Tokenization and stablecoins are the entry points, but adoption will take time, with cycles of hype and recalibration. Mature hubs like Hong Kong and Singapore are focused on regulated frameworks, while Southeast Asia stands out as one of the most dynamic retail crypto regions globally, with crypto activity increasingly embedded in everyday financial life.
This mix creates unique opportunities for funds positioned to bridge East and West—to identify underserved Asian markets and projects, and help them scale globally. tmr Ventures’ deep cross-border networks and institutional relationships give us an edge in backing projects that can scale beyond local ecosystems and shape the next phase of institutional and consumer adoption in Asia.