Guest: Xiao Feng, Chairman and CEO of HashKey Group
host:
Liu Feng, founder of @Web3101cast, partner at BODL Ventures, and former editor-in-chief of Lianwen
Jane Hongjun, founder of Silicon Valley 101 and podcast host
Podcast source: Web3 101
Original title: E202｜Dialogue with Xiao Feng: In the boiling moment of Hong Kong stablecoins, some sober reflections on returning to common sense
Air Date: July 31, 2025
Summary of key points
As Hong Kong's stablecoin licensing process progressed, stablecoins and RWA became extremely popular terms in the Chinese-speaking world. Dr. Xiao Feng, Chairman and CEO of HashKey Group, known as the "Godfather of China's Blockchain," shared with us his sober reflections on this trend and some common sense.
Summary of highlights
Hong Kong’s regulation of stablecoins is unexpectedly strict.
Stablecoins themselves are not created for payment purposes.
Mainland China will begin accepting stablecoins and ultimately crypto. Mainland China's discussion of stablecoins focuses on the currency competition between major powers; Hong Kong is more concerned about anti-money laundering loopholes.
Crypto is better at anti-money laundering than traditional finance.
Consortium chains will not work, and stablecoins on consortium chains will not succeed.
Most successful applications are created without permission.
Hong Kong has the potential to once again become a world hub for digital asset trading.
Singapore is positioned as the Switzerland of Asia, while Hong Kong is positioned as the Wall Street of Asia.
Next year will be a period of rapid growth in the traditional financial market’s embrace of cryptocurrencies.
The underlying protocol of blockchain is decentralized, but the application layer is definitely centralized.
Although stablecoins are hot in Hong Kong, regulators are very cautious about this topic, which is a huge gap.
In Beijing, two points of consensus are gradually emerging. The first is that China cannot continue to turn a blind eye to the global wave of US legislation and compliance regarding cryptocurrencies, stablecoins, and blockchains. The second is how to respond. If China remains indifferent and refuses to embrace these new developments, it may be at a disadvantage in the competition among national currencies.
By this time next year, we may be discussing RWA. Mainland China may begin to accept asset tokenization. After RWA, the third step in the future may be to accept Bitcoin.
Since you have begun to accept stablecoins, you must also accept public chains. Otherwise, your stablecoins will not be globally competitive, and you will be wasting your time.
There are three stages of RWA. The easiest is the tokenization of fiat currency. The second stage is financial assets. The last stage is the tokenization of physical assets.
Today, the market interprets stablecoins from the perspective of currency, lacking consideration of the underlying logic changes.
All tokens will not exist without technology, accounting methods and financial infrastructure.
The most important aspect of Hong Kong’s stablecoin legislation for licensed stablecoins is its anti-money laundering protection.
Stablecoins will become a measure of value in the virtual and digital worlds in the future, and a medium of exchange for all virtual and crypto assets.
Trading platforms strive to build very good liquidity for any trading pair. The construction of any liquidity pool requires costs, and these costs need to be amortized.
There are two reasons why Hong Kong has become a favorite of the capital market again. The first is the emergence of DeepSeek, and the second is that due to Trump's policies in the United States, traditional alliances have weakened, and everything has become a business.
A sober reflection on the craze for stablecoins and RWAs
Liu Feng: I've noticed that stablecoins have become a buzzword across Chinese-speaking regions, both in Hong Kong and mainland China. Could you briefly explain to our audience why so much attention is being paid to Hong Kong's stablecoin regulations? Also, if possible, could you highlight some key areas of concern in Hong Kong's cryptocurrency and digital asset regulation?
Dr. Xiao Feng: I personally feel the hype is a bit excessive. A few days ago, I was having coffee with a friend at a hotel cafe, and I noticed that everyone at several tables around me was talking about stablecoins. Not long ago, we also met with officials from the Hong Kong Monetary Authority for a discussion on stablecoins. They repeatedly reminded us that the stablecoin sector is too hot and that Hong Kong won't issue many licenses.
Hong Kong's stablecoin issuance will be very strict in the initial stages. Not only will licensing requirements be strict, but oversight will also be stringent, particularly regarding anti-money laundering regulations for cryptocurrencies using stablecoins. August 1st is merely the date the Hong Kong Stablecoin Act comes into effect, but it doesn't mean anyone can apply for a stablecoin license starting that day. While there are rumors that dozens or even hundreds of companies have applied, I believe the number of applications actually accepted by the HKMA will be very small. This is primarily due to the close scrutiny paid to each applicant's background, particularly their financial risk management background and their anti-money laundering experience and capabilities.
Hong Kong is an international financial center with decades of experience. Therefore, its regulators, whether the SFC or the HKMA (Hong Kong Monetary Authority), are highly sensitive to developments in the international financial market, a stark contrast to mainland China. Mainland China's interpretation of stablecoins, particularly offshore RMB stablecoins, is primarily based on monetary factors, competition between major currencies, and the hegemony of the US dollar. Hong Kong, however, is different. I initially thought that if so many mainland institutions, individuals, and capital were willing to come to Hong Kong—whether developing, issuing, or using stablecoins—it would be a huge benefit for Hong Kong as an international financial center. My impression of Hong Kong's regulators is that their primary concern, or core concern, is whether the issuance of stablecoins outside the bank account system will result in a lack of oversight. In fact, financial regulators currently lack the means to regulate the circulation of stablecoins after the Mint.
Therefore, Hong Kong is more concerned about potential loopholes in its anti-money laundering efforts. As an international financial center, if Hong Kong were criticized by other major global financial centers for its anti-money laundering practices, its reputation as a global financial hub would be significantly impacted. This, in turn, may be completely different from what everyone perceives. While Hong Kong is actively involved, regulators are very cautious about this issue, a significant discrepancy.
Looking back: Being snubbed by Hong Kong regulators
Liu Feng: You've been advocating for and promoting transparency and regulation of digital asset legislation in Hong Kong for years. Could you share your thoughts on the current perception that Hong Kong, as a global financial center, is fully embracing digital assets and cryptocurrencies, while also maintaining significant concerns and a cautious approach? How do you view this contrast, and the contrast over the years: past criticism and rejection, and now a seemingly open embrace, this new attitude?
Dr. Xiao Feng: I can share a personal story that fully illustrates the point you just raised. HashKey was founded in Hong Kong at the end of 2018. We relocated our operations to Hong Kong in 2018 due to stricter regulatory measures in mainland China in 2017, as Hong Kong offers legal and regulatory compliance. In early 2019, I visited the Hong Kong Securities and Futures Commission to apply for a cryptocurrency trading platform license. The official who met me told me, "Mr. Xiao, you don't need a license to open a virtual currency trading platform in Hong Kong, and it's not illegal. You can just turn left and start."
I actually heard this during a visit to the Director and Deputy Director of the Hong Kong Economic and Trade Administration in 2022. I mentioned our desire to apply for a Hong Kong stablecoin license. The Deputy Director replied, "Mr. Xiao, issuing stablecoins in Hong Kong is not illegal, and we have no right to regulate you." I told him we had already invested in a stablecoin company in Hong Kong, but couldn't continue because no bank in the city dared to offer stablecoin services, and clients couldn't deposit or withdraw fiat currency normally.
Why did these two officials say the same thing? Hong Kong is a country with an Anglo-American legal system. Within the framework of common law, the first principle is "anything not prohibited by law may be done." Therefore, in 2019, Hong Kong had no laws regarding cryptocurrencies. You could do anything, including setting up a trading platform. At the same time, both institutions (the Securities and Futures Commission and the Hong Kong Monetary Authority) claimed they had no authority to issue licenses or regulate you. This is because the second principle of common law is "anything not prohibited by law may be done." If you set up a trading platform on the street, they had no right to investigate or punish you.
I joked at the time, "Does that mean no one in Hong Kong will care about me?" He replied, "It's not that no one will care. The Commercial Crime Investigation Division of the police will look after you. Although what you're dealing in isn't a security, it's at least a commodity, and there are people who will take care of consumer protection."
Indeed, people in the industry are saying that compliance costs in Hong Kong are high and that doing so is unprofitable. Compliance does have costs, but there's a reason for them. After all, we're in an emerging financial industry, and the new finance brought about by FinTech has significant externalities. Over the past few hundred years, a set of rules has gradually been established to protect investors and consumers, and these rules naturally come with operational costs.
If our industry is unwilling to bear these costs, it may never grow. If you envision a $10 trillion, $10 trillion, or even $100 trillion market, then you will inevitably be constrained by spillover effects, which you must bear.
New hope: "The mainland will start accepting stablecoins and then the entire Crypto"
Dr. Xiao Feng: So, my view until now is that since 2017, when mainland China began restricting, regulating, and even banning certain crypto-related businesses, I've been wondering: When and where will mainland China begin to accept these things again? For years, there's been no answer. In the last month and a half, I think I've found the answer, thanks to many internal seminars I've attended in Beijing, and also because of the impact of stablecoin legislation in Hong Kong and the United States.
Most of the discussion in mainland China took place after the passage of the Hong Kong Stablecoin Ordinance on May 21st. Subsequently, the US also actively promoted related bills, which sparked a lot of discussion in Beijing. During these discussions, I suddenly had an epiphany and realized that mainland China would start by accepting stablecoins and then accept the entire cryptocurrency industry .
During this period, I participated in numerous discussions that lasted for a month and a half. Although differing opinions persisted in Beijing as of Sunday, two points of consensus were gradually emerging. The first was that China could no longer turn a blind eye to the global wave of US legislation and compliance regarding cryptocurrencies, stablecoins, and blockchains, nor could it fail to take countermeasures. The second point of consensus was: how to respond? As my friends in Beijing put it, it was like, "Should we fight the Huaihai Campaign?" The question was settled; it had to be fought. How should it be fought? Should it be a small-scale or large-scale campaign? Which military unit should be annihilated first? This is the question currently being discussed. From my perspective, I sensed that mainland China would begin to accept this from this point on. If China continues to turn a blind eye and refuses to embrace these new initiatives, it could be at a disadvantage in the competition among national currencies. I believe China's top leaders have recognized this issue, which is why former Central Bank Governor Zhou Xiaochuan recently delivered a speech at the Lujiazui Forum, where his main point was to warn against the impact of US dollar-denominated stablecoins on the dollarization of the international monetary system.
This is clearly a view of the US dollar stablecoin from the perspective of national currency competition, and China clearly has no choice but to respond. I also predict that this is the saying, "There's a first day, and there's a fifteenth day. " Since you've begun to accept stablecoins, you must also accept public chains. Otherwise, your stablecoin won't be globally competitive, and your efforts will be in vain.
So, after accepting RWAs, what might be the next step? I believe that by this time next year, we might be discussing RWAs, and mainland China may begin to accept asset tokenization. After all, RWAs share a common attribute with stablecoins: they can support the real economy. Mainland officials, regulators, and the government are more likely to accept things that support the real economy. After accepting RWAs next year, you'll have to consider the third step, perhaps accepting Bitcoin.
Challenges affecting China’s embrace of digital assets: Increased fraud and deception
Liu Feng: You've outlined a possible path for how China, in the future, might truly embrace blockchain and digital assets. It sounds like we're starting to understand this technology with stablecoins. Because of the currency wars between major powers, we're forced to embrace stablecoins, which don't appear particularly crypto-centric. Then, we'll gradually embrace products like RWAs that leverage blockchain tokenization but can support the real economy. Later, we might find ourselves embracing a broader range of blockchain-based technologies, including product forms, business models, and financial innovations. I'd like to ask, what challenges do you foresee along the way? Could this promising future be impacted?
Dr. Xiao Feng: I think the challenges come from two aspects. On the one hand, whether it's the EU, the US, some developed economies, or international anti-money laundering organizations and the Financial Stability Board of the Bank for International Settlements, they have all expressed concern to Hong Kong about its aggressive promotion of stablecoins, particularly RMB stablecoins. Stablecoins could facilitate oil trade between China and Russia, Iran, and Venezuela, all of which are subject to UN sanctions.
Previously, fiat currency channels were more complex and could be monitored. However, if the stablecoins used are independent of banks and SWIFT, they are completely disconnected from the entire system of financial rules and regulations established in Europe and the United States. This pressure is something they have already begun to pay attention to, and I believe they will continue to exert pressure. However, if we want to issue offshore RMB and stablecoins, there is definitely a demand for this.
Secondly, we're already seeing some signs of this happening. The recent surge in stablecoins in mainland China, spreading from Hong Kong to Beijing—sometimes even more so than in Hong Kong—has led to a surge in fraud and scams. In fact, the current trend of pyramid schemes and scams using stablecoins is no longer limited to a single province; it's already happening across many economically developed regions. As we've seen in the news, financial regulators in various provinces across mainland China have been issuing warnings. This trend is indeed something to be wary of. I often remind myself not to add fuel to the fire. We all clearly remember the ongoing rectification of internet finance, and we must not fall prey to this constant rectification, as it would severely slow the mainland's acceptance of stablecoins or RWAs . The current trend is indeed quite severe, and it's putting pressure on mainland China. For regulators, if they haven't seen improvement, and the first thing they see is the rampant scams in mainland China, they'll obviously slow down their pace.
Re-understanding the three stages of RWA (real world assets): fiat currency tokenization; financial asset tokenization and physical asset tokenization
Liu Feng: For example, innovative applications like RWA are leveraging new blockchain technology to drive financial innovation. You also mentioned the potential for fraud. Could you share your thoughts on the correct, promising, and truly valuable use cases or directions for blockchain technology applications like RWA?
Dr. Xiao Feng: I call RWA asset tokenization, and I divide it into three phases. The first phase can be traced back to 2014, with the tokenization of USDT fiat currency. The second phase, which should begin in 2024, will see the tokenization of financial assets, with US companies like BlackRock, Fidelity, and Franklin Templeton tokenizing their US dollar bond funds and US dollar money market funds and putting them on the blockchain.
However, most people in the market are interested in discussing the tokenization of physical assets. I believe that the most crucial issue in the tokenization of physical assets remains unresolved: the oracle. How can you ensure that an off-chain physical asset corresponds to its on-chain digital twin, maintaining a permanent anchor and guaranteeing the existence of the offline asset?
Currently, there's no definitive solution for this technology, though DePin offers a promising solution. DePin has been a premature development, having failed to establish a viable business model in 20 years. While DePin may offer a future solution for tokenizing physical assets, the technology is still immature, so the tokenization of physical assets still has a long way to go. Large-scale adoption and adoption will require resolving the oracle problem.
The three stages are like the flow of water, from easy to difficult. The easiest ones are of course legal tenders like the US dollar, euro, and RMB , which have very simple trust endorsements and are recognized by everyone.
The second step, from the perspective of trust endorsement, is easier to solve with financial assets. Their issuers and custodians are both licensed financial institutions, subject to strict regulation, making the digitization and tokenization process much easier. Tokenizing physical assets is a very difficult task, and I don't believe a perfect solution has been found yet; I believe it will take time.
Therefore, I recommend that those interested in RWAs first transform physical assets into financial products, and then tokenize those financial products. For example, if a gold miner told me they produced 8 tons of gold annually, I wouldn't believe it. However, when you produce this gold, according to financial standards, there are standards for what kind of gold bars can be used as currency anchors or collateral assets.
Once completed, a licensed financial institution will issue a gold fund or gold ETF. These gold bars are inspected and placed in a vault by a reputable bank, which also serves as the custodian for these gold assets. The custodian will issue instructions to us, indicating that it has received gold that meets the standards. Then, they will help them mint a token for circulation on the blockchain. This is probably the best solution to date.
Liu Feng: This makes it very easy to understand and implement when issuing tokens. Your point reinforces that, while RWAs are real-world assets, not all real-world assets can be simply mapped onto a blockchain. Instead, they should undergo a highly standardized process early on. First, they must be verifiable and auditable, and second, structured as much as possible. This will facilitate future transactions and facilitate transactions between parties. This is the key to an effective RWA.
However, I believe that in this process, the so-called RWA is not creating a new asset; it is simply moving from physical objects to existing financial ledgers and then onto the blockchain . This sounds more like a simple use case for using blockchain to complete settlement and transactions. In itself, it actually utilizes the real-time settlement and consensus of blockchain or cryptocurrency.
Return to common sense: What problems does blockchain solve?
Three Changes in Human Accounting Methods
Liu Feng: So the core of RWA isn't about issuing coins or assets. This brings us back to your call from a decade ago: Why do you believe blockchain and the crypto assets that rely on it are a true financial innovation of the future? Could you please go back and explain the most fundamental reasons you've been talking about for the past decade, or even more than a decade, about why we need blockchain?
Dr. Xiao Feng: Recently, when discussing stablecoins, most people have viewed them from a macro perspective, interpreting them from a monetary perspective. This lacks an underlying logic or technical foundation . Stablecoins, and indeed all tokens, are based on a new set of technologies. This new technology is primarily based on the blockchain distributed ledger, which itself represents an evolution of human accounting methods.
Human accounting methods have undergone three evolutionary changes. The earliest counting method dates back to 3500 BC in Sumer, in what is now Iraq. A 3,500-year-old clay tablet was unearthed at that time, and later research revealed it to be a ledger recording income and expenses. This was the earliest simplified or single-entry accounting system, recording only income and expenses, ignoring everything else.
By 1300 AD, new accounting methods emerged in the northern Italian city-states, particularly Florence and Venice. These methods not only recorded income and expenditure but also assets and liabilities. So, why did this new method of calculation emerge in Italy around 1300 AD? It's related to technological developments, such as papermaking, and especially mathematics. Around 1200 AD, an Italian mathematician wrote a book called "Principles of the Abacus," which is very significant. Without certain mathematical inventions, there would be no new methods of calculation.
The third significant change was the replacement of medieval Roman numerals with Arabic numerals. The introduction of Arabic numerals was linked to the Renaissance, when much ancient Greek and Roman knowledge was preserved in Arabic and later translated. Technological advances, particularly the introduction of Arabic numerals, made it possible to invent new accounting methods. Furthermore, the complexity of economic activity also led to new demands. Shakespeare's The Merchant of Venice depicts the complex maritime trade of Italy at the time, which required partnerships, borrowing, and chartering ships. This also led to the introduction of taxation by city-states, complicating accounting.
This need led to the creation of double-entry bookkeeping, which began to separate cash flows: cash flows from operations, cash flows from investments, and cash flows from bank loans. The complexity of human economic and commercial activities necessitated changes in bookkeeping methods. Over 730 years later, in 2009, the launch of the Bitcoin mainnet, a blockchain-based distributed ledger, ushered in a new bookkeeping method we call distributed ledger.
From a technical perspective, this is related to asymmetric encryption algorithms from the 1970s, the development of the internet, and distributed databases. The evolution of computer programming languages and smart contracts as computer programs are all results of this technological development. On the other hand, needs are also changing. Human society is becoming increasingly virtualized and digitized, and activities in the digital world are increasing. A fundamental characteristic of the digital world is that it transcends time, space, organizations, entities, and jurisdictions.
When these transitions occur, accounting methods must also adapt, because you can't use Chinese or US accounting standards. Human society has created a parallel universe for itself. In this parallel universe, what accounting methods will you use? Which currency will you use? Which country's accounting standards will you adopt, and which country's laws will you enforce? If mistakes are made, will you be subject to Chinese or US law? All of these become unfeasible, or the cost is so high that the parallel universe cannot function. Therefore, new accounting methods—distributed ledgers and double-entry bookkeeping—came into being. The key difference is that prior to double-entry bookkeeping, accounting methods were all private ledgers, where individuals kept their own accounts and expected others to trust their own records. To ensure the authenticity of these ledgers, society as a whole needed to establish a comprehensive system to deter and punish falsifiers.
To enforce these laws, you need lawyers, accountants, police, procuratorates, courts, and even prisons. Otherwise, how can I trust that your accounting is accurate? In reality, the cost of this entire system is extremely high. Even with the safeguards and regulations of this system, almost no company's accounting is 100% accurate.
Distributed ledgers are reshaping financial market infrastructure
Liu Feng: This is the core and foundation of our entire credit and financial systems today. This is also why, when Bitcoin emerged, the earliest crypto natives, or cryptocurrency nativists, challenged the very core of this system.
Dr. Xiao Feng: Yes, this challenge has an overly idealistic side. For example, regarding anarchism, I believe human society cannot become an anarchic state. A small number of people can live in a utopia, but for the 99% of people, utopia is impossible. The emergence of distributed ledgers stems from the combination of this need and technology, leading to the creation of such a thing in 2009. This ledger, first and foremost, means that a new financial market infrastructure has been rebuilt based on distributed ledgers.
Financial market infrastructure, as defined in classic textbooks, can be summarized in one sentence: a comprehensive set of institutional arrangements for trading, clearing, and settlement. Whether you're trading stocks, funds, bonds, or anything else, the fundamentals are the same. Traditional financial market infrastructure utilizes central registration, central depository, central counterparty, and central clearing. Any transaction cannot be completed without the assistance of three or more intermediaries. For example, in stock trading, fund settlement on brokerage trading platforms, and share clearing, four intermediaries are required to complete a single transaction.
The new record-keeping method established on a distributed ledger eliminates these intermediaries, transforming transactions into peer-to-peer transactions. Peer-to-peer transactions are possible because of a different accounting method. On a public ledger, both Zhang San and Li Si record their information on the same ledger, and the data is consensus-based. The blockchain distributed ledger is an open and transparent global public ledger. Everyone in the world records on a single ledger, and everyone in the world can see all the information on it. Therefore, there is no need for intermediaries, and transactions become peer-to-peer, eliminating the previously mentioned central registration, central depository, central transaction, and central settlement. This allows peer-to-peer transactions, instantaneous settlement, and virtually zero fees.
From a business perspective, if a new financial market infrastructure can achieve higher efficiency, lower costs, and fewer links, it will undoubtedly be viable. Over time, it will undoubtedly replace the old system. If it cannot be replaced, it would violate the laws of business.
Traditional financial market infrastructure relies on net settlement. Net settlement means that all financial institutions, such as the banking system, essentially halt at 5:00 PM, and no further transactions are processed thereafter. What does "halt" mean? Everyone settles their accounts, and once that's done, the day's settlement is complete. New financial market infrastructure settles on a transaction-by-transaction basis. Goods and cash are exchanged, and settlement is complete once the trade is confirmed. This is why you see a significant difference between stock trading platforms and cryptocurrency trading platforms. Crypto trading platforms are built on a transaction-by-transaction settlement system, allowing them to operate 24/7 without the need for cessation or settlement.
Why can't stock trading operate 24/7? Because it's a net settlement system, there's a deadline by which accounts must be settled before trading can conclude. That's why the New York Stock Exchange announced plans to implement 5+23-hour trading this year. Why 23 hours, not 24?
Because it must stop, otherwise the accounts won't be clear. Therefore, changes in distributed ledgers have brought about changes in financial market infrastructure. Stablecoins and other tokens are all based on this infrastructure: blockchain technology, a new accounting method for distributed ledgers, and a new financial market infrastructure built on this technology and accounting method. We should view stablecoins from this perspective, not just from the perspective of currency.
Liu Feng: This is something I'd particularly like to hear from you. I've noticed that when people discuss stablecoins, they're often focused on their convenience as a payment method. Many people would argue that they're not as good as the mobile payment systems we use, like WeChat or Alipay. However, only by truly understanding the distributed, decentralized ledger behind stablecoins can we grasp their true significance .
While WeChat and Alipay are incredibly convenient for Chinese users, when it comes to cross-border, cross-country transactions within a vast global financial system, even within the securities market, we find fundamental differences between today's system and the new financial system powered by blockchain, public blockchains, or cryptocurrencies. Therefore, understanding the significance of stablecoins is crucial to understanding why they represent a profoundly new financial innovation.
Dr. Xiao Feng: Explain the three layers of technology, accounting methods, and financial infrastructure clearly. Without these three foundations, no tokens will exist. Not only stablecoins, but other tokens and even RWA will not exist.
Key points of Hong Kong's crypto asset regulation
Changes and core framework of Hong Kong's crypto asset anti-money laundering regulatory policies
Hongjun: Here are a few questions about stablecoins.
First, how do Hong Kong's policies, regulations, and legislation require us to develop stablecoins in order to establish a comprehensive anti-money laundering mechanism? Second, developing a stablecoin that complies with regulations is already extremely difficult. I think another major issue is how to ensure liquidity and expand the market size of your stablecoin.
Dr. Xiao Feng: The core issue of Hong Kong's stablecoin legislation for licensed stablecoins is actually anti-money laundering. Other technical issues can be addressed. Anti-money laundering standards are fully consistent across the entire financial market; there are no separate AML standards for crypto. Hong Kong pursues the highest or latest global standards in anti-money laundering. Around 2021, the International Anti-Money Laundering Organization revised its AML standards for the first time, incorporating cryptocurrency AML regulations. This prompted the Hong Kong Legislative Council to quickly begin revising its own AML regulations. Very early on, around 2022 and 2023, Hong Kong amended its AML regulations, adding two new sections.
The first step was to incorporate the crypto anti-money laundering guidelines of international anti-money laundering organizations into Hong Kong's anti-money laundering regulations. Anti-money laundering regulations for gold were also added. This revision directly led to crypto asset trading platforms like HashKey initially applying for a Type 7 ATS license, or alternative asset trading license.
After the Hong Kong Anti-Money Laundering Ordinance came into effect on June 1st of last year, we had to apply for a Virtual Asset Service Provider (VATP) license under the Hong Kong Anti-Money Laundering Ordinance. Therefore, trading platforms operating in Hong Kong essentially hold two sets of licenses: one is the Alternative Asset Trading License Type 7 under the Hong Kong Securities Ordinance, and the other is the VATP license under the Hong Kong Anti-Money Laundering Ordinance. Because the Hong Kong Anti-Money Laundering Ordinance was revised to include anti-money laundering regulations for cryptocurrencies, the specific responsibility for these anti-money laundering duties was assigned to the Securities and Futures Commission (SFC). The SFC became the responsible authority for anti-money laundering in cryptocurrencies in Hong Kong and was required to have supervisory measures. Therefore, the Virtual Asset Service Provider (VATP) license was established in the Anti-Money Laundering Ordinance and officially took effect on July 1st of last year. This led to many trading platforms announcing the closure of their Hong Kong operations on June 1st of last year.
The Type 7 license has always existed in the Securities and Futures Commission (SFC). Before the SFC amended its anti-money laundering regulations and was given the responsibility for anti-money laundering in the crypto sector, it only issued Type 7 licenses under the SFC. This is a very unique situation in Hong Kong.
In addition to adding another license, this regulation has also led to significant changes in Hong Kong's regulation of money exchange licenses over the past year and a half. In Hong Kong, money exchange outlets are licensed by the Hong Kong Customs and Excise Department, which naturally includes crypto-to-fiat currency conversions in its business scope. Consequently, these businesses began operating rapidly, leading to rapid growth, prompting Hong Kong Customs and Excise Department to consider potential money laundering issues. Consequently, Hong Kong Customs and Excise Department drafted its own anti-money laundering requirements for these outlets and revised the requirements for money exchange licenses .
After the revisions were completed, Hong Kong's new legislation clarified that the Securities and Futures Commission (SFC) holds the primary responsibility for anti-money laundering in the cryptocurrency sector. Therefore, the Customs' claim no longer holds sway, as the law does not grant them the authority to regulate cryptocurrency anti-money laundering. Consequently, a proposal proposed last year called for currency exchange licenses to be jointly reviewed and issued by the Customs and Futures Commission (SFC), but this was merely a proposal from both parties.
In May of this year, the law governing currency exchange point licenses, also known as VA OTC licenses, was enacted. Following public opinion, the new law no longer involves Customs in oversight, leaving the Hong Kong Securities and Futures Commission (SFC) solely responsible for reviewing and issuing VA OTC licenses. The international anti-money laundering organization's anti-money laundering regulations regarding cryptocurrencies led to revisions to Hong Kong's Anti-Money Laundering Ordinance, impacting the entire Hong Kong crypto industry.
Why are crypto asset anti-money laundering measures more effective than traditional finance?
Hongjun: So, what does anti-money laundering specifically refer to in business or practical terms? For example, does it refer to bank deposits and withdrawals from stablecoins or cryptocurrencies to fiat currency? Or, assuming that all stablecoins are on-chain in the future, will real-name registration be required on-chain? Is there a specific definition?
Dr. Xiao Feng: Traditional finance and cryptocurrencies have different approaches to anti-money laundering due to differing technical logic. This is a very debatable issue. Traditional finance believes that cryptocurrencies are completely unsuitable for anti-money laundering due to their anonymity. Traditional finance's anti-money laundering relies on identity, but on-chain identities are either non-existent or anonymous, so they believe this presents significant challenges and makes anti-money laundering impossible.
After I explained it to them, many people in traditional finance believed that crypto's anti-money laundering efforts were superior . This is because crypto's anti-money laundering efforts track wallet addresses, allowing for the tracking of fund flows, such as where the money has and hasn't gone. Within a single country, anti-money laundering is relatively easy, as judicial authorities can access all bank records. However, in Hong Kong, accessing data from other banks can be much more complex, and identity-based discovery is far more difficult than in mainland China.
However, if the transaction involves two or more countries, and an individual's money flows across multiple jurisdictions, anti-money laundering efforts become nearly impossible, as other countries will not cooperate unless lengthy and complex legal procedures are followed. Furthermore, national laws restrict the disclosure of customer information. Traditional finance's anti-money laundering system is inherently inefficient, costly, and difficult to enforce, but crypto eliminates these restrictions. For example, on the HashKey trading platform, whether it's a stablecoin or a token, technically we can track the token's creation date and its movement path. Global crypto anti-money laundering agencies are tasked with labeling wallet addresses as blacklisted or legitimate. If an address appears on a blacklist, we deem it a suspect of money laundering and will refuse to accept it.
This is a more effective anti-money laundering mechanism. Traditional finance has gradually come to understand and recognize this approach, believing it to be the best solution currently available.
Real use cases for stablecoins
Liu Feng: Why do financial institutions in Hong Kong, interested in stablecoins, insist on choosing them? While we can understand this from a broader perspective, considering currency wars and the struggles for monetary power among sovereign states, why should we, as participants, consumers, and users, get involved?
Dr. Xiao Feng: I once posited that stablecoins address the last mile of financial inclusion . Stablecoins are easier to access than the US dollar, requiring no bank account or reliance on banks. Imagine a country with a severe dollar shortage. Even if you have a bank account and want to exchange it for US dollars, the bank might not be able to provide services because it doesn't have US dollars. Currently, Nigeria, Africa, has the largest population of US dollar-denominated stablecoin holders. Of its population of over 200 million, 30% to 40% hold US dollar-denominated stablecoins, and most of these individuals likely don't have bank accounts. They can't open bank accounts, and banks can't provide them with services.
Now, as long as they have a mobile phone, they can exchange their local currency for USDT at currency exchange points in Nigeria. After exchanging for USDT, anyone has the ability to make global payments and can send money around the world.
For example, a Filipino domestic worker in Hong Kong remits HK$1,000 to HK$2,000 per month to her parents in rural Philippines. The current system takes 15 days and incurs fees of 7% to 10% for her parents to receive this money. If a stablecoin is used, whether it's a Hong Kong dollar stablecoin, a US dollar stablecoin, or an offshore RMB stablecoin, her parents will have a mobile phone. Currently, about 80% to 90% of people have a mobile phone. Payments made with stablecoins arrive within seconds, eliminating the need for the 7% to 10% fee. Crucially, the funds arrive in just tens of seconds. This is true financial inclusion. Therefore, new technologies and financial market infrastructure can actually contribute to the realization of financial inclusion.
Liu Feng: Why are these institutions so eager to apply for licenses? What do they see?
Dr. Xiao Feng: If you were an institution that started preparing three or four years ago, I believe you saw the huge potential. If someone hastily announced a stablecoin this month, I think most of them are speculators who simply don't understand how to actually run a stablecoin system.
Liu Feng: Even if they have long-term plans, if we look back, if a Hong Kong stablecoin were launched today, who would want to use it? And what about the much-anticipated RMB stablecoin? Given that capital accounts are still closed, what are the real use cases for RMB stablecoins?
Dr. Xiao Feng: Stablecoins are often framed in a narrow context, which I believe is incorrect. Stablecoins are more than just a payment tool. While US legislation recognizes dollar-denominated stablecoins as a payment tool, it also leaves a loophole, authorizing stablecoin regulators to submit a research report on non-payment dollar-denominated stablecoins within one year of the law's entry into force.
In reality, 99% of current US dollar stablecoins are used not for payments but for transactions. This can be seen as transactions driven by payments, but primarily between crypto assets and stablecoins. The estimated value of stablecoin payments in 2024 is $73.2 billion, a modest figure, primarily driven by crypto asset transactions.
Stablecoins are already trending towards becoming a medium of exchange and a measure of value. They will become a measure of value in both the virtual and digital worlds, serving as a medium of exchange for all virtual and crypto assets. In the future, Hong Kong dollar and offshore RMB stablecoins will largely be used as a medium of exchange like RWA. I believe this is their primary use case. While they can certainly be used for payments, it won't be their primary use case for at least three years.
Re-exploring the development of the world of crypto assets
Liu Feng: The application in the payment field that everyone is thinking about now will actually take a longer time.
Dr. Xiao Feng: Yes, payment certainly has its attendant functions. Stablecoins weren't created for payment purposes per se , but rather because crypto assets are so volatile. Therefore, we need a relatively stable currency to price and trade these volatile assets. Stablecoins are stable relative to Bitcoin's volatility, not relative to the US dollar. Some people explain stablecoins by saying they're pegged to the US dollar at a 1:1 ratio, but that's not their purpose.
When stablecoins emerged in 2014, the entire market was complaining about excessive volatility. They said they couldn't use Bitcoin or other currencies as a medium of exchange. They needed something with a stable value to price these volatile assets. For example, what's the value of one Bitcoin? $120,000. You're actually talking about 120,000 USDT, which you then use for transactions.
Stablecoins on consortium chains will not succeed
Liu Feng: When USDT, or the US dollar-denominated stablecoin, was first introduced, it was practically unused for several years. At that time, all crypto assets were priced in fiat currency. Whether it was the US dollar or the RMB, the RMB was actually the primary pricing currency for all crypto assets for a long time.
In fact, today, a key use case for the internationalization of the RMB is the pricing of crypto assets. However, regulatory policies later halted this trend, prompting the emergence of stablecoins. Today, we're discussing the return of stablecoins. This topic was discussed 10 years ago. Back then, there was a wave of support for blockchain, not Bitcoin. Today, it seems we want both blockchain and Bitcoin, but even more so, stablecoins.
Dr. Xiao Feng: I remember that around the beginning of 2015 or the end of 2014, the UK Chief Scientist's Office released a policy report titled "Blockchain and Distributed Ledgers." The argument was that blockchain and distributed ledgers are great, but it's just that cryptocurrencies are not. Therefore, the concept of consortium blockchains was proposed. So where have these consortium blockchains gone to today? Both the market and technology have proven that consortium blockchains don't work. The essence of a blockchain lies in its own token. Without a token, it's still just the internet. In fact, we're seeing that even those who were most opposed to coined blockchains are gradually accepting them. If you accept stablecoins, they're just tokens on a chain.
Liu Feng: Is it possible that the stablecoins we are talking about today, or in the Chinese context, will be issued on the alliance chain in the future? Is this possible?
Dr. Xiao Feng: Some people have been trying to do this, but I believe it's impossible. Who would use a consortium blockchain? If this required an application, permission, and approval, just imagine how difficult it would be to promote from a market perspective. First, I have to apply, and then you have to spend a tremendous amount of effort to review each one individually, just like Know Your Customer (KYC) in traditional financial markets. The permissionless nature of blockchain is a crucial feature of its development. It's a permissionless network, allowing anyone to join and leave freely. I can make my own decision. A classic example of this is Bitcoin miners. I buy a mining rig, find a place with electricity and internet, and join when I want. If I don't, I can shut down the entire rig. This is how Bitcoin miners came to be.
Most applications, or successful ones, are created without permission. As we discussed earlier, the digital economy spans time, space, jurisdiction, and entities. Who authorizes this? And what standards govern such licensing? Therefore, if you truly want to promote and succeed, you must adhere to the fundamental principles of blockchain, just as there are fundamental principles for whether or not to use a cryptocurrency. If a bank were to build a public or open consortium blockchain, wouldn't finding customers be even more challenging than with offline operations? Without customers, what's the point of such a blockchain? Ultimately, these problems stem from inefficiencies and low costs, preventing anyone from truly implementing it.
Competition and cooperation between traditional brokerages and crypto asset trading platforms
Liu Feng: Besides stablecoins and the other topics we just discussed, could Dr. Xiao please discuss the current issuance of trading licenses? This is a hot topic in the market, and many traditional brokerages are actively entering the cryptoasset trading system. How are these licenses issued? How do you view their value? And how can traditional brokerages effectively engage in cryptoasset trading now and in the future?
Dr. Xiao Feng: From the perspective of securities firms, they are applying for an upgrade to their existing securities brokerage licenses. They originally provided services for trading stocks on behalf of clients, but now they hope to extend their license to also allow them to trade crypto assets. Crypto simply does this. Individual securities firms rarely apply for, for example, a Type 7 trading platform license or a VATP license.
In Hong Kong, our HashKey trading platform is considered an independent third party. Almost all brokerages, after upgrading their brokerage licenses, aggregate their orders through us. We are a trading system. However, if you are a brokerage firm setting up a trading platform, other brokerages will not come to you. This creates a problem: how do you solve your liquidity problem? You need to build your own liquidity pool, which is very costly. But how can you build this liquidity pool if there are no orders? In this case, it is almost certain that you will never make money, unless you are the only one operating in this market. Other brokerages are forced to trade with you and send orders to you.
Trading platforms strive to build very good liquidity for any trading pair. Building any liquidity pool requires costs, and these costs need to be amortized. Therefore, if 40 brokers take over those 10 trades, everyone benefits.
What is the value of a compliant digital asset trading platform?
Liu Feng: With the continuous issuance of licenses, have you seen an improvement in the business volume and liquidity of Hong Kong's local cryptocurrency trading platforms?
Dr. Xiao Feng: Judging from the data from our trading platform, not only is trading volume growing, but customer growth is also very rapid, including the asset accumulation on our trading platform. This growth is very significant. This is because we have very strict Know Your Customer (KYC) procedures when anyone registers as a client. Clients who have passed strict KYC are considered high-value customers. We also have our own offshore trading platform, which we categorize into two types: offshore and onshore. The Hong Kong trading platform is an onshore platform. Offshore trading platforms naturally have faster customer growth because KYC standards are less stringent. However, we have ultimately found that onshore trading platforms are 10 times more valuable than offshore platforms, primarily in terms of trading volume and commissions.
We chose to do things in compliance with regulations. I believe that since Bitcoin started trading in 2009, or around 2011, I have three observations.
First, starting in 2009, Bitcoin and ETH were called digital natives. Thanks to distributed ledgers, many things were created out of nothing. With the emergence of USDT and the development of digital twins to today, the digital native stage gave rise to offshore trading platforms, which were very profitable. But now, with the beginning of the digital twin stage, it will create a new type of trading platform: onshore trading platforms. Because anything that is a digital twin is considered a securities offering, it requires licensing, compliance, and regulation. Any issuance of RWAs without the approval of the Securities and Futures Commission (SFC) could face significant challenges in the future. This is not the era of ICOs, when Hong Kong could not regulate you. But now that there are legal regulations, if you don't change your trading platform model, you will face significant challenges. At the same time, digital twins also present us with tremendous opportunities. Digital twins could potentially increase the market size of tokenized assets from 3 trillion to 30 trillion, which would otherwise be impossible. Assuming the market size reaches 30 trillion US dollars and remains unregulated, can such a market exist? No country would accept such a market. Therefore, this is the first observation: the transition from digital natives to digital twins brings...
The second observation is the change in trading platforms. From offshore to onshore, the first phase of offshore trading platforms was successful. At Hashkey, we don't believe we can imitate them, as that would be a dead end. Therefore, we are embracing the second wave of booming digital twin token assets as an onshore trading platform and providing services.
The third observation is the convergence of on-chain and off-chain assets. Since last year, Bitcoin and ETH have seen a surge in digital native tokens, with many of them shifting from on-chain to off-chain. Once on trading platforms, they've become exchange-traded funds (ETFs), effectively unrelated to the blockchain. Meanwhile, companies like BlackRock have also transitioned their off-chain assets to on-chain. The tokenization of various funds, and even the now-hotly discussed tokenization of stocks, can be summarized as three key trends since 2009.
Hong Kong vs. Singapore
Hong Kong is expected to become a digital asset trading center
Liu Feng: Under this trend, do you think it is possible for Hong Kong to really become the world center for digital asset trading again?
Dr. Xiao Feng: Hong Kong has great potential, or rather, it possesses unique advantages. The core factor behind this advantage is China. From the internet, AI, to cryptocurrencies, the primary global competition comes from China and the US. Of the top 20 internet platforms established by the US, half are in the US, the other half are in China, and virtually none are in Europe or other countries. The same is true in the field of AI: aside from the US and China, few other countries are developing large-scale models.
It's said that 40% to 50% of any major modeling team in the United States is Chinese, particularly first-generation international students. The same is true for the development of Python. Globally, Europe has made virtually no contribution to the development of underlying technologies. When it comes to the application layer, specifically the application of digital twins, virtually no one in Europe is working on this either. The real work is either in the United States, China, or within the Chinese community.
Therefore, this is a core factor in Hong Kong's potential to become a global crypto hub. Furthermore, Hong Kong's common law system under the "One Country, Two Systems" framework, combined with its Anglo-American legal structure, distinguishes it from mainland China and offers unique advantages. Mainland China adheres to a continental legal system, requiring a license for everything. Hong Kong, on the other hand, adheres to a common law system. Therefore, under the "One Country, Two Systems" framework, Hong Kong is more likely to take a more proactive role on behalf of China in this regard.
Two reasons why Hong Kong has become the darling of the capital market again
Liu Feng: What you just said makes perfect sense today. But if it were said last year or the year before, many people might have called it nonsense, as Hong Kong's situation wasn't so good back then. Now, it seems Hong Kong has become a favorite of the capital market again. Could you explain the changes you've observed and the key factors behind them?
Dr. Xiao Feng: I think there are two main factors. The first is that I sometimes joke that DeepSeek saved China. The emergence of DeepSeek has led to a dramatic shift in global valuations of Chinese assets. When you don't like it, you give it an 8x price-to-earnings (P/E) ratio; when you like it, you give it an 80x P/E ratio. This is because valuations of Chinese assets have suddenly become optimistic, leading to a significant adjustment. Previous pessimism was indeed excessive, so the rebound has been significant. Before DeepSeek, people believed that Chinese AI could not succeed, which led to a downward adjustment in overall valuations of Chinese assets.
Secondly, due to Trump's policies, traditional US alliances have weakened, and everything has become a business matter. This has led to a reallocation of funds previously concentrated in the US, with many no longer being fully invested in the US due to the high level of uncertainty. Therefore, during this reallocation process, some funds have naturally flowed to China.
Many Chinese people had previously moved their money to the United States with great difficulty. Now, seeing the tension in Sino-US relations, they are worried that the United States may freeze their funds, so they have also begun to move some funds out, and Hong Kong has become a place to transfer them.
Another source of this is the Russo-Ukrainian war, which led Switzerland to abandon its neutrality stance and support Ukraine. This abandonment of its neutrality led to a rebalancing of funds previously held in Switzerland. Now that Switzerland is no longer neutral, those funds no longer necessarily remain in Switzerland.
So you can see that there are actually two places that have become targets for capital influx: Hong Kong and Dubai. Dubai has also attracted a lot of capital because Middle Eastern money has begun to flow out of Europe. Originally, Middle Eastern money was managed through London, but now that London has left the EU, much of this Middle Eastern money has returned to Hong Kong and Dubai. Dubai is now also a place where capital is flowing in.
Singapore is positioned as the Switzerland of Asia, and Hong Kong is positioned as the Wall Street of Asia.
Liu Feng: For a long time, people in the Chinese-speaking world have been more optimistic about Singapore, seemingly viewing it as a significant challenger and alternative to Hong Kong's position as a financial center. We've seen large financial institutions relocate their regional centers from Hong Kong to Singapore, financial media outlets have also migrated from Hong Kong to Singapore, and even some core cryptocurrency institutions have done the same.
Dr. Xiao Feng: Both are international financial centers, but they each have completely different positionings. Singapore positions itself as the Switzerland of Asia, while Hong Kong positions itself as the Wall Street of Asia. There's little to trade in Singapore; Hong Kong boasts the most active trading markets for various assets. If you position yourself as the Switzerland of Asia, you want social stability and a calm market, avoiding dramatic ups and downs to avoid criticism. This is why Singapore is willing to let unlicensed institutions that don't serve Singaporeans leave, as they only cause reputational damage without paying taxes, bringing little benefit to Singapore. If you position yourself as the Wall Street of Asia, the situation is different. You must maintain a vibrant market, offering numerous investment and trading opportunities; otherwise, it's not Wall Street. These are the different choices made by the two places.
Liu Feng: For example, we're sitting in an office in Central, which was once part of the world's financial center. In your observation, how many bankers and wealth managers around you have truly embraced cryptocurrencies and digital assets?
Dr. Xiao Feng: Currently, the percentage of traditional financial markets embracing cryptocurrency is relatively low. It's like a bottle of water with half of it left. Some say it's only half, while others say it's still half. The trend I see is that while the percentage is still small, it's increasing. I believe next year will be a period of rapid growth. The most fundamental reason is that US legislation provides legitimacy and compliance for the entire crypto industry.
Traditional finance previously had a low profile, primarily due to compliance concerns; they were wary of losing out on the bigger picture. Despite the current high returns on this asset class, most financial institutions, especially those managing other people's funds, are hesitant to take the risk, as any compliance issues would be their responsibility. However, once legal backing is in place, coupled with the Trump administration's push, traditional financial institutions and investors will be able to enter this sector en masse. Therefore, we anticipate a boom next year following the passage of the US law this year.
Whether the entire crypto industry will experience a second growth curve depends on US legislation this year. Such legislation will have a global impact, prompting other countries to follow suit and even forcing China to reform. As an international financial center, Hong Kong is highly sensitive to changes in the international financial market. Hong Kong's regulators and developers, with decades of operational experience, will closely monitor these developments.
Hongjun: Regarding the bankers you mentioned, I'm wondering if Hong Kong's current regulatory and licensing policies are too strict. Blockchain, a place where transactions can transcend borders, has benefited many overseas projects, making it more difficult for local projects to gain compliance and licenses?
Dr. Xiao Feng: Obtaining a license and being regulated in a particular jurisdiction is inevitable. The offshore space will gradually shrink, primarily due to two factors: legal and regulatory requirements, and operational resources. Assets with securities are unlikely to be traded in completely unregulated locations because securities regulators would disapprove.
Furthermore, the number of digital natives is shrinking. The world doesn't need hundreds of blockchains. Ideally, a single Bitcoin and Ethereum blockchain would be sufficient. The underlying internet protocol is globally unified. If there were two protocols, the world would become complex, and cross-chain issues would arise.
The underlying blockchain protocol should be open source, decentralized, and globally uniform. The application layer must be centralized , as it addresses specific scenarios, needs, and consumer protections. In the future era of RWAs, stablecoins, and digital twins, allowing for arbitrary profiteering will be impossible.
Liu Feng: Dr. Xiao, you've consistently emphasized decentralization and permissionlessness, yet you've also mentioned the need to embrace regulation and conduct compliant business. This seems to contradict the primalist spirit of cryptocurrency. How do you view this contradiction?
Dr. Xiao Feng: From a layered perspective, this isn't a contradiction. The underlying protocol must be decentralized, while at the application layer, some degree of centralization is inevitable. Centralization and decentralization can be explained from the economic perspective of fairness and efficiency. Emphasizing fairness requires decentralization, allowing for more people to participate in voting; emphasizing efficiency requires centralization, as the highest efficiency is often achieved when one person has the final say. Most commercial applications should strike a balance between fairness and efficiency.
At the application level, 100% decentralization is unrealistic. This is something I've been pondering, reflecting the unity of contradictions. I recently read a book about Huawei by Professor Tian Tao of Renmin University, titled "Advancing Through Paradox," which discusses the importance of paradox.
HashKey's listing goals and options
Liu Feng: Have you considered listing on the Hong Kong market?
Dr. Xiao Feng: We've had this goal since we established our presence in Hong Kong in 2018, so we maintain very strict compliance requirements. We are one of the few groups globally that can provide audit reports from the Big Four accounting firms for at least three consecutive years. Therefore, we certainly hope to realize our dream of an IPO, and we ourselves should become a public company and operate in a more transparent manner.
Unforgettable moments in the crypto world
Liu Feng: I'd also like to hear about your past experiences. You're a veteran in the financial industry, coming from traditional finance, and you've been advocating for the importance of blockchain for nearly a decade. Ethereum's tenth anniversary is coming up soon, on July 30th.
Specifically, you and the Wanxiang Blockchain behind you were the most important funder before Ethereum launched. Could you briefly reflect on some of the most insightful moments you've witnessed in the industry's development over the past decade?
Dr. Xiao Feng: That probably goes back to 2014. I started exploring and researching blockchain in 2013, and in 2014 we took a trip overseas. That year, I went to San Francisco and visited Ripple. At that time, Justin Sun had just been appointed Chief Representative.
After a series of journeys, my indirect understanding of Ethereum in China became firsthand experience. From New York to Silicon Valley and back again, I firmly believed this new technology had the potential to reshape the financial industry. So, after returning in 2014, we began taking action in 2015. At the end of 2014, I spoke about Ethereum at a financial magazine forum, which was live-broadcasted by Sina Finance. Afterward, Shen Bo introduced me to Vitalik. We met in 2015, and the investment proposal came about shortly thereafter. I felt the narrative Vitalik presented to me was worth pursuing. First, it was logically sound; second, if there were challenges, it was worth supporting. So, I didn't initially calculate the potential return on my investment; it wasn't even a consideration.
Supporting the Ethereum Developers Conference in Shanghai for 16 years, and seeing the faces of the attendees
Dr. Xiao Feng: We donated $500,000 in 2015. By 2016, ETH had already launched on the mainnet and was priced at tens of dollars per coin. I continued to ask the Ethereum Foundation, "Do you still need money this year?" They replied, "No." I said, "But I promised you we'd continue supporting you in 2016, so I plan to spend this money."
We negotiated a deal: If Devcon were held in Shanghai, I would cover all expenses, with advertising and other ticket fees going to the Taiwan Foundation. Under these circumstances, the 2016 Devcon was held in Shanghai, with all expenses covering $500,000. I thought this was a good deal; we fulfilled our commitment, not only providing $600,000 in 2015 but also continuing our support in 2016. I also felt that conference was truly impactful. When I walked into the venue, I saw over 800 attendees, 90% of whom were foreigners. I doubt any international conference held in China has such a high proportion of foreigners.
Liu Feng: We're deeply moved by the fact that a few years ago, China was actually one of the centers of the blockchain world. I raise this question because, amidst the debate over monetary sovereignty among major powers, blockchain has become a widely embraced technology. But in fact, for a long time, our country has been one of the centers of blockchain technology.
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