Web3 lacks a regulatory framework

Good morning! It is a great pleasure to attend the opening ceremony of the 2023 Hong Kong Web3 Carnival. This four-day carnival is a grand event that brings together global Web3 technology leaders, experts, scholars, and industry elites. I am glad to know that more than 10,000 people have signed up to participate. Everyone communicates and discusses the global development trend and hot topics of Web3, and discusses the future development together. First of all, I would like to express my warm congratulations on the success of the carnival and wish the four-day event a complete success. Friends from afar The journey in Hong Kong has been pleasant and fruitful these days.

The rise of Web3

Speaking of Web3, it can be said that there are different opinions. I think it should be examined from the historical perspective of technological change. Technological changes have always led to the innovation of business operations, and business behavior will in turn drive more technological changes. This cycle often becomes the driving force for economic development.

Computers and the Internet belong to this type of transformative force. Microsoft and Apple were founded in the 1970s, and they gradually made computers a widely used tool. As the computing power and capacity of computers continue to increase, optical fiber is becoming more and more popular as the backbone of communication networks. The superposition of the two actively drives the trend of Internet development and creates huge business opportunities.

Riding on the rapid development of science and technology, the Internet has shifted from being a communication channel for specific institutions to Web1.0, and a number of enterprises based on gathering and distributing information have been created. In the past 20 years or so, the Internet has developed into Web2.0, which also has a social interaction orientation. Coupled with the popularity of mobile terminal devices, a new generation of giant enterprises has been created. However, Web2.0 belongs to the centralized Internet, and user data and information are collected and controlled by large Internet platform companies. They have the advantages of data and information, and thus obtain a lot of advertising revenue and economic benefits.

With the rise of blockchain technology, many people believe that the Internet has entered the Web3 era. The immediacy, transparency, efficiency, disintermediation, and de-platformization of blockchain technology break the situation that the original data and information are controlled by specific Internet platforms. The data will be jointly owned by the builders and users, making the Internet “decentralized” . Of course, Web3 is in its infancy, and the current common applications include

cryptocurrency

, decentralized exchanges, digital identity verification, decentralized financial services (DeFi), blockchain games, and even NFT, etc., but it is conceivable that the future will There will be many more new applications and opportunities.

In fact, with the rise of Web3, many people are gearing up and looking for new opportunities; but at the same time, many people are taking every step, worrying that the future development will be uncontrollable. In my opinion, whether it is at the macro level or at the level of individual enterprises, the key to the real success of Web3 is to better serve the needs of the real economy and the market, and to solve long-standing pain points and difficulties with innovative technologies, models, and applications. , improve efficiency, create a better experience, create new value, and a new model. This can be an improvement on the old basis, or it may be a “disruptive creation”.

Challenges and Opportunities

So what will happen to the development of Web3？ I boldly say that now is a golden opportunity for the development of Web3, and it is also the most thrilling moment.

It's thrilling because looking back at history, at the beginning of every big tide, it will inevitably experience the baptism of shocks. The Internet explosion in 2000, virtual currencies in recent years, and even the recent collapse of virtual asset exchanges have implicated some banks whose main customers are start-ups, and have also brought shocks to the market. Therefore, we must calmly and cautiously view the development of Web3.

It is said to be a golden opportunity, but after the shock, the remaining market participants will become stronger, and investors will become relatively calmer. Market forces will prompt enterprises, technologies, and applications to issue new forces and new models, so that powerful companies can survive the stage of market take-off. On the other hand, the government and regulatory agencies will generally learn from their experiences and formulate appropriate strategies after the shocks to plug loopholes and manage risks so that the market can develop steadily and sustainably.

From a historical point of view, the development of Web3 will grow rapidly again after going through the shock phase. Recent events tell us that the problem with virtual currencies, virtual assets, and trading platforms is not the lack of innovation, but whether they have effectively managed and controlled risks under a proper regulatory framework.

To promote the development of Web3, the premise is that the stability of the financial system and investor protection cannot be damaged. On this point, everyone here is a participant who cares about Web3. I believe you have also learned from recent events: proper supervision is a must, so as to create a “sustainable development” environment and allow everyone to have a better future. Expansion capacity.

Under this premise, Hong Kong actively embraces the development of Web3. As a starting point, we published the “Policy Declaration on the Development of Virtual Assets in Hong Kong” last October. Simply put, we will promote the sustainable and responsible development of the virtual asset market, and allow virtual assets to maximize innovation and development under the regulatory thinking of “same business, same risk, and same rules”. Since the publication of the “Declaration”, friends in the Web3 circle have paid attention to the development of Hong Kong in the past six months, and many of them have settled in Hong Kong; some of them finally decided to set up a site in Hong Kong after a period of observation.

In this year's “Budget”, from the perspective of “high-quality development”, I proposed three major directions, including the digital economy, the development of Web3, and the positioning of an international green technology and financial center. Regarding the development of Web3, I will set up a virtual asset development task force to work with industry representatives to submit recommendations to the government on the sustainable and responsible development of the industry. In addition, I have allocated HK$50 million to Cyberport to accelerate the development of its Web3 base.

Summarize

Distinguished guests and friends, the road of innovation and change has never been smooth. It can be expected that the development of Web3 still has a long way to go. Even so, after analyzing the situation and summarizing the development experience of other places, we believe that the benefits that Web3 can bring to the market and solve the pain points for the market and society are promising, and this is also an irreversible future trend.

The SAR government is full of expectations for the development of Web3 in Hong Kong. I hope that everyone can stick to the core elements of “steady and prudent advancement” and “solve pain points”, and work together to build a thriving Web3 ecosystem in Hong Kong, leading more technological breakthroughs, model innovations, and application innovations. I firmly believe that based on Hong Kong, we will expand our footprint to the ASEAN market, the Asia-Pacific market and even the world, and there will be opportunities everywhere.

There are many discussion sessions in today's conference. I look forward to more in-depth discussions on different topics, such as how to use blockchain technology to promote the better development of green technology and green finance, and how to assist traditional enterprises to take advantage of new technologies. technology to improve operational efficiency, etc. I hope everyone's insights can lead the way of Web3 innovation.

Finally, I once again wish the carnival a complete success! Dear guests and friends, good health, happy work, and great career, thank you!