Consensus 2025 Revelation: Policy and Ecological Fission of Hong Kong Web3｜OKG Research "HK Web3 Frontline"

Nearly 10,000 participants flocked to the Hong Kong Convention and Exhibition Center, which is the first time that Consensus, the top summit in the global Web3 industry, has brought about a grand event. I chose Hong Kong not only because it is a test field for financial innovation, but also a hub for the flow of value in the East and the West. From "tokenized green bonds" to "Hong Kong dollar stablecoin regulatory sandbox", from "RWA ecology" to "decentralized AI", Hong Kong is using policy innovation as an engine to push Web3's narrative from technical experiments to reality The deep integration of the world.

OKG Research has continued to track the development context of Hong Kong's Web3 since 2022, focusing on ecological and technological innovation practices, and has produced more than 30 in-depth articles on hot topics such as VASP, stablecoins, and RWA tokenization, and has also been linked to Hong Kong's mainstream media Sing Tao Group Establish column cooperation with Dagong Wenhui Media Group and other media to continue to export industry insights. Taking the Consensus Conference as an opportunity, we once again focused on the core topic of Hong Kong Web3 and launched the " HK Web3 Frontline " special topic to analyze the past, present and future of Hong Kong Web3 from a differentiated perspective.

**1. Supervision first: Exploring the boundaries of Web3 compliance in

an orderly manner**

If Hong Kong's Web3 ecosystem is compared to a building, a reliable and applicable regulatory framework is the foundation. Since the policy declaration was released at the end of 2022, Hong Kong has continuously reviewed and improved its regulatory system to promote the independent evolution of the virtual asset ecosystem in the boundaries of security and compliance. By developing a comprehensive regulatory framework covering virtual asset exchanges, stablecoin issuers, custodians and OTC trading activities, Hong Kong has paved the way for value interoperability and long-term innovation in the financial markets.

These measures not only enhance the credibility of Hong Kong's virtual asset market, but also continue to attract capital and corporate inflows. As of the end of 2024, Hong Kong Cyberport alone has gathered nearly 300 Web3 companies, with a cumulative financing scale of over HK$400 million.

But the global Web3 landscape has changed dramatically in the past two years. As Trump returns to the White House, the U.S. crypto-regulatory situation is significantly improving. The high-pressure punishment supervision model that has lasted for many years is disappearing, and Singapore, Dubai and other regions continue to send crypto-friendly signals. When the "east rises and west falls" is no longer mentioned, and when the global competition for Web3 becomes increasingly fierce, how can Hong Kong grasp this wave of innovation? OKG Research once proposed that Hong Kong's development of Web3 and virtual assets is not only in vain, but also pragmatic: the Hong Kong government is concerned about technological innovation and application innovation that can have a substantial impact on the economy and society. Hong Kong Securities Regulatory Commission CEO Leung Fengyi also expressed a similar view in her speech at the Consensus Conference, " The second trend to shape the future financial landscape is to integrate Web3 innovation into the real economy. "

But at the same time, although the crypto asset market accounts for less than 1% of the global financial system, its rapid expansion speed and its increasing correlation with mainstream financial assets have led to its risks that cannot be ignored. In the past, Hong Kong and the United States seemed different at many time points, but in fact they both ended up being the same: while maintaining innovative activities, they both prevented the potential financial risks brought by this new category of assets.

2. Hong Kong dollar stablecoin: Hong Kong 's "financial" ambitions

Stablecoins are a hot topic at this Consensus Conference and are also a key area that Hong Kong has continued to pay attention and invest in in the past two years. Standard Chartered Hong Kong, Amps Group and Hong Kong Telecom were recently reported to establish a joint venture, hoping to apply for a license from the Hong Kong Monetary Authority under the new regulatory system to issue stablecoins pegged to the Hong Kong dollar. USDC issuer Circle has previously announced that it will cooperate with the three major Hong Kong banknote issuing banks to launch HKDCoin 1:1 anchored with the Hong Kong dollar.

Although it is impossible to determine how much cake the Hong Kong dollar stablecoin can eventually share in the current environment where the US dollar stablecoin accounts for absolute market share, for Hong Kong, developing Hong Kong dollar stablecoin is an inevitable choice to seize the initiative in Web3 development and seize future financial opportunities. . The connection channel with fiat currency is the most worthy and easy to accumulate value in the crypto ecosystem at this stage, and stablecoins are an indispensable infrastructure for building channels. At the same time, the focus of the development of Hong Kong Web3 in the next stage is to break the virtual world and reality. The world is estranged, while stablecoins are the core link connecting the traditional finance and the crypto world and may become a widely accepted payment tool.

But how should the Hong Kong dollar stablecoin be issued? How should Hong Kong manage? Which institutions will become the first "campaign"? " Seven Questions about Hong Kong Dollar Stable Coins: Issuance Logic, Regulatory Rules and Potential Impact " gives an answer, and believes that non-USD-backed stablecoins at this stage cannot compete with USD stablecoins in the short term, but through mechanism innovation (such as income generation) Stablecoins) and application innovations (such as RWA), Hong Kong dollar stablecoins are expected to avoid direct competition with US dollar stablecoins, thereby attracting more diverse institutions and users to participate.

Of course, we also need to distinguish the difference between the Hong Kong dollar stablecoin and the digital Hong Kong dollar. Although there may be potential competition between the CDD and the HKD stablecoin in the short term, it is expected to achieve resource sharing and complementary advantages in the future: the utilization, expansion and friendliness of the HKD stablecoin in the virtual asset market will be far better than that of the CDD, while the CDD It will be in the leading position in value support and reliability.

3. RWA tokenization: From concept to the fission of the trillion-dollar market

RWA is undoubtedly the hottest concept of this year's Consensus. “ RWA tokenization is not a trend, but an inevitable. ” John Cahill, head of digital assets at Morgan Stanley, revealed the general strategic shift of traditional financial giants today.

OKG Research proposed in 2023 that RWA is an important area worthy of long-term attention and investment in Hong Kong. How to tokenize huge traditional assets is the biggest development opportunity for Hong Kong's virtual asset industry. Today, Hong Kong is actively embracing the wave of RWA tokenization. The 2024 Policy Address proposes to promote the construction of RWA tokenization and digital currency ecosystem, while the Hong Kong Monetary Authority has launched the "Digital Bond Funding Program" to encourage the capital market to adopt tokenization technology. Hong Kong Special Administrative Region Government Financial Affairs and Treasury Secretary Xu Zhengyu also said when attending the Consensus conference that Hong Kong is considering promoting gold tokenization.

However, the initiative of tokenization narrative at this stage is not Web3, but depends more on Web2 institutions. To see if they have enough motivation to change the status quo and tokenize the assets they hold. This is not easy for traditional institutions: any new technology attempting to move traditional assets/business to new areas is often difficult to succeed quickly, because the incremental value it creates may not be large enough, but the cost is often high. The same is true for RWA. However, as Wall Street in the United States accelerates its layout of the tokenized market, Hong Kong urgently needs more institutions with resources and assets to actively participate in tokenized innovation in order to gain more initiative in change and avoid being defeated in competition with the United States Quickly open your body. How to stimulate market vitality is still an important proposition.

In addition, how long does OKG Research have to leave RWA tokenization for Hong Kong? 》 also suggested that Hong Kong should focus on the most suitable tokenized standardized financial assets in the short term, and give full play to the geographical and institutional advantages of Hong Kong as an international financial, trade and shipping center, focusing on the generations in trade and cross-border related scenarios. Monetization application, quickly expand the scale of Hong Kong 's RWA tokenization market.

4. ETFs and OTC: "bright and dark clash" between capital channels

Another key measure for the development of Hong Kong Web3 in 2024 is the launch of virtual asset spot ETFs. From the clear acceptance of relevant applications by the end of 2023, to the official listing of six virtual asset spot ETFs officially approved by the Hong Kong Securities Regulatory Commission on the Hong Kong Stock Exchange by the end of April, it is only more than a hundred days before and is enough to reflect the "speed" and "efficiency" of Hong Kong regulatory authorities. . The launch of virtual asset spot ETFs has opened another funding channel for investors to lay out crypto assets. As of the end of 2024, the total asset management scale of Bitcoin spot ETF in Hong Kong has exceeded HK$3 billion, accounting for 0.66% of the total Hong Kong ETF market.

Compared with the United States, the main advantages of Hong Kong virtual asset spot ETFs are to support physical redemption and be the first to launch Ethereum spot ETFs, but these have not brought about continuous incremental growth. Although the share of ETFs purchased in physical form accounts for more than 50% of the initial issuance scale, the Bitcoin holding group is not willing to easily release liquidity, while the Ethereum spot ETF is affected by not supporting pledge. Investor enthusiasm. Although the current yield on Ethereum pledge is only about 3%, whether from a narrative or economic perspective, the additional benefits brought by pledge are likely to be an important factor in attracting investors, especially traditional financial investors. It is also the main feature that distinguishes Bitcoin from Ethereum.

In addition to the ETF channel, Hong Kong has gradually formed a three-layer funding network of "licensed exchanges-compliant OTC-banks" . OKG Research in " How to improve liquidity in the Hong Kong crypto market? 》 stated that the focus of liquidity at this stage is off-site. Although trading platforms are still the most important infrastructure in the crypto market, observing the recent trends, it will be found that crypto liquidity is gradually gathering into the OTC (overseas trading) market. Currently, the transaction volume processed by the Hong Kong OTC market is as high as nearly 10 billion US dollars each year. At the same time, thanks to the crypto store change, a physical product with regional characteristics, it not only attracts young investors from all over the world, but also has the same effect on participants in the middle and upper age groups. Attractive. In recent years, the Hong Kong OTC market has also attracted the attention of many users and institutions in the fields of international trade and cross-border payments, becoming another important channel for Hong Kong to gather global funds.

Hong Kong Government is considering including OTC in the regulatory scope. Although it may have an impact on transaction activity in the short term, it can help Hong Kong attract more influx of compliant funds in the long term, and also help Hong Kong increase its licensed VATP. Another channel for free flow of funds. Perhaps in the near future, a safe and compliant OTC market will not only help the Hong Kong market improve liquidity, but will also become an important channel for the crypto market and the Web3 ecosystem to connect the real liquidity market.