Dr. Xiao Feng: A Cool Reflection on Hong Kong's Digital Asset Regulation

Recently, the licensing of stablecoins in Hong Kong has sparked heated discussions. Dr. Xiao Feng, Chairman and CEO of HashKey Group, shared some cold reflections that return to common sense.

The Stringency of Hong Kong Stablecoin Regulation

Hong Kong's regulation of stablecoins is unexpectedly strict. Officials from the Monetary Authority have repeatedly warned that the stablecoin sector is overheated, and licensing and regulation will be very strict, especially in terms of anti-money laundering. As an international financial center, Hong Kong is very concerned about the regulatory loopholes that stablecoins may bring.

The Essence of Stablecoins

Stablecoins were not created for the purpose of payment. They serve more as a trading medium and a measure of value for digital assets. In the future, stablecoins may become a measure of value in the virtual and digital worlds, as well as a trading medium for all virtual assets and digital assets.

The Shift in Attitude Towards Stablecoins in Mainland China

The mainland may start by accepting stablecoins and gradually accept the entire cryptocurrency ecosystem. This is because:

1. In the face of the global wave of cryptocurrency legislation, China cannot continue to turn a blind eye.

2. If we do not embrace these new things, we may be at a disadvantage in the competition of national currencies.

3. After accepting stablecoins, one must inevitably accept public chains; otherwise, stablecoins will lack global competitiveness.

4. After accepting RWA( real-world assets ), it may accept Bitcoin in the future.

Limitations of Consortium Blockchain

Xiao Feng believes that consortium chains are not feasible, as the essence of a chain lies in its built-in token. Most successful applications are generated in an unpermissioned state. If approval and permissions are required, it will greatly affect promotion and usage.

The Potential of Hong Kong as a Digital Asset Trading Center

Hong Kong may become the world's center for digital asset trading again, with its main advantages coming from:

1. China's position in the global cryptocurrency competition.

2. The common law system in Hong Kong under the principle of "one country, two systems."

3. Global capital reallocation, Hong Kong becomes an important hub.

The Trend of Traditional Finance Embracing Cryptocurrencies

The proportion of traditional financial institutions embracing cryptocurrencies is increasing. With U.S. legislation providing legitimacy to the industry, next year is expected to be a period of rapid growth. This could bring about a second growth curve for the crypto industry.

Decentralization and Regulation of Blockchain

The underlying protocol of blockchain should be decentralized, but some degree of centralization at the application level is inevitable. This reflects the balance between fairness and efficiency. Completely decentralized applications are unrealistic.

Outlook on the Future of Digital Assets in Hong Kong

Xiao Feng believes that Hong Kong has a unique advantage in the upcoming development of digital assets. With the global reallocation of funds and China's influence in the cryptocurrency field, Hong Kong is expected to regain its status as an important digital asset trading center. However, a balance in regulation and healthy industry development still require joint efforts from all parties.