Startup Web3, chat every Wednesday!
(Startup Web3.0) is an interview program for Chinese Web3.0 entrepreneurs initiated by Mankiw LLP. Every Wednesday night, we will invite industry leaders, first-line institutions, well-known entrepreneurs, etc. to share their experiences. We hope to promote the compliance development of China's Web3.0 industry through positive voices, rational discussions, and experience sharing.
This issue is themed "China's Web3 Entrepreneurship Opportunities", focusing on the current status and future development direction of the Web3 industry. Lawyers Liu Honglin and Niu Xiaojing combined their rich professional experience and discussed the concept of Web3, industry opportunities and challenges from the perspective of entrepreneurs and the law.
As the founder of Mankiw Law Firm, China's first law firm specializing in Web3, Lawyer Liu Honglin shared his entrepreneurial journey and insights into the industry, analyzed the commercial potential of asset issuance, trading and supporting services, and emphasized transformation barriers such as information asymmetry. This interview is a discussion of the technical essence and practical application scenarios of Web3. This dialogue aims to provide inspiration for fellow lawyers, industry practitioners and entrepreneurs, and reveal the positive construction value and realistic opportunities of Web3 in the Chinese market. From the practice of Mankiw Law Firm to the vision of the future of the industry, it provides a comprehensive perspective for understanding the embryonic stage and potential of Web3, and is a systematic review and outlook on the Web3 entrepreneurial ecosystem.
(The audio transcription has been processed by AI and may contain omissions and errors.)
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(Start-up Web3.0!) Old program restarted
Lawyer Liu Honglin: Tonight feels like a long-awaited reunion. This column has been running for two years, called Entrepreneurship Web3. At that time, the plan was to talk to everyone about entrepreneurial things in the industry every Wednesday night. It was suspended for a period of time due to some reasons. Today is the first episode of the restart of the old program. Starting from next week, we will invite founders or partners of Web3 startups in the Chinese community every Wednesday night to talk to everyone about their entrepreneurial stories and some of their views on the industry from different tracks and projects. Tonight is a special session for two lawyers, and the topics and perspectives will be closer to fellow lawyers.
Lawyer Niu Xiaojing: Without further ado, let’s get straight to today’s topic. Today I want to talk about the entrepreneurial opportunities in China’s Web3, one of the prerequisites being China. Now, please welcome Lawyer Liu, would you like to give a brief introduction?
Lawyer Liu Honglin: We hope to turn this column into a regular activity, where we will chat with you about the entrepreneurial direction in the industry every Wednesday night and let the core founders share. As an entrepreneur of a law firm in the Web3 industry, today I would like to talk to you about my feelings as an entrepreneur in this industry and what I have seen.
Mankiw Law Firm’s Entrepreneurial Journey: Three Years of Deep Exploration into Web3
Lawyer Liu Honglin: I believe that many partners are supporting us online tonight, and they are more familiar with what we are doing and the situation. Simply put, Mankiw began to delve into the Web3 industry three years ago, and it is the only law firm in China that focuses on this field. It can be seen that there has been no substantial development and progress in the industry in the past three years, otherwise fellow lawyers would have come in long ago. The development of an industry means that Party A has sufficient legal service fees. Now everyone is reluctant to come in, perhaps because they think that Mankiw has worked hard for three years and can wait and let the bullets fly. From the perspective of entrepreneurial direction positioning, we have chosen such a track and have been deeply involved in it for a long time. After three years of entrepreneurship, thanks to the support of all our partners, we have teams in Shanghai, Shenzhen and Hong Kong.
There are more than 30 lawyers, plus other colleagues, a total team of 40 to 50 people. The overall development idea is to delve deeper into the industry, and to link up or set up local offices based on the needs of entrepreneurs in the Chinese-speaking area. This year, the focus is on the Greater Bay Area, and Shenzhen and Hong Kong will be grouped together. The goal is to have a team of about 30 people in Shenzhen in two years. At the same time, in 2025, that is, the end of this year, we will look at opportunities in Singapore. There are Singaporean lawyer colleagues or friends in the live broadcast room today who are interested. Perhaps we can jointly set up a law firm in Singapore that specializes in serving this industry. In addition to Singapore, Dubai, which everyone is paying attention to, now has a more friendly entire crypto industry, Web3 entrepreneurial environment, and regulatory policies. Our idea is that we will go wherever the people need us to be, close to the market, close to customers, mobilize local resources and compliance capabilities, and support the development of entrepreneurs in the Chinese-speaking area. This is the perspective of an entrepreneur, and I will share it with you first.
Attorney Niu Xiaojing: Okay, thank you Attorney Liu. Attorney Liu mentioned that Mankiw has been starting a business in this field for nearly three years. There may be many lawyers, industry practitioners or entrepreneurs in the live broadcast room who want to transform to Web3. Can Attorney Liu first give a brief introduction to Web3 to colleagues or other entrepreneurs in the live broadcast room who don’t know much about Web3? In addition to the cryptocurrency speculation, blockchain, and NFT heard in the news, what is it like? What are the differences between concrete things and the Internet we are exposed to?
Web3 Disassembly: From Bitcoin to the Next Generation of the Internet
Lawyer Liu Honglin: There are three concepts here. Let me talk about them first to help you sort out the relationships. Three terms: the first is cryptocurrency, the second is blockchain, and the third is Web3 or Web3.0. Let me share with you briefly. First of all, when it comes to blockchain, the most popular project is Bitcoin, BTC. The current price is around 85,000 US dollars, and it reached more than 100,000 US dollars some time ago. Bitcoin was born in the 2008 subprime mortgage crisis. An internet user named Satoshi Nakamoto published a white paper, saying that he wanted to create a project that would not require a middleman and could be used for point-to-point cash payments over the Internet. This was his original intention for Bitcoin. He wanted to create a currency system that is not issued by a national central bank and can be used as money on the Internet. Bitcoin came first, then blockchain, and then Web3. This is the origin of all things. For everyone to understand simply, all blockchains come from a set of electronic currencies called Bitcoin, and they come from this origin.
As Bitcoin slowly developed, many people engaged in technology discovered that Bitcoin's underlying technology, distributed storage, incentive mechanisms brought about by blockchain network node maintenance, and encryption algorithms, seemed to be able to do other things besides the Bitcoin network. People extracted a series of underlying technologies of Bitcoin and collectively referred to them as blockchain. Bitcoin is the most successful application of blockchain technology, and it is also the first application. This is the first concept I want to talk about, the relationship between encrypted assets or cryptocurrencies represented by Bitcoin and blockchain technology. One is an application, and the other is a general term for underlying technologies.
In addition to the term blockchain, why does Web3 exist? Web3 is an artificially refined concept. My understanding of Web3 is the third generation of the Internet. The first generation of the Internet, like what people born in the 1980s and early 1990s experienced, was surfing through BBS, Tianya or Yahoo, which was the 1.0 version of the Internet. In the 1.0 era, as netizens, they browsed Internet information more. Websites, pages, and forums came from professional editors or webmasters, such as Ma Huateng and NetEase, who were webmasters who maintained Internet pages. This is Internet 1.0, and users are passive browsers of information. The second generation of the Internet is called Web2.0, which is basically from the same era as mobile Internet today.
The biggest difference between Web2.0 or the mobile Internet era and Web1.0 is that as an Internet user, in addition to passively browsing information, you can also actively interact with other netizens and actively share content. Like the earliest Weibo, Moments, Zhihu, Douyin, and the video account we talked about tonight, we are all content creators. The biggest feature of the Internet 2.0 version is that everyone can produce content on the Internet, deliver it to other netizens, and even watch movies, order takeout, and take taxis. This is our understanding of the Internet in the Web2 era, the mobile Internet, roughly this logic. According to version iterations or 1.0 and 2.0, the next generation of the Internet is called 3.0 from a sequential numbering perspective, which is what we understand as Web3. I shared at CEIBS (Business School) some time ago, and a student asked me, Lawyer Liu, do you think Web3 will come? I said it will definitely come. There are Web1 and Web2, and there will definitely be Web3 in order. Although it is a bit sarcastic, it means that the Internet must evolve and iterate, and there must be a general direction.
We must answer the question, what is the core difference between the next generation Internet and the Internet such as the video account and butterfly account used at this moment? This is the core point of Web3 and Web2, and it is also an important reason why we entrepreneurs choose to dig deep into the industry. There are two revolutionary events in the next generation Internet. The word combination is a bit exaggerated, but they are two very big breakthroughs. The first point is to solve the problems existing in the current Internet. What is the problem? Traffic privacy information protection. For example, the core used tonight, whether it is the X social platform or the butterfly account platform, are we WeChat users or commodities? It is a bit of a speculative question. WeChat founder Zhang Xiaolong has always said that WeChat is built for users, but from a business perspective, we belong to WeChat commodities. The number of WeChat users exceeds 1 billion every day, and 1 billion people use the service on Douyin every day, and a lot of attention is paid to it. Correspondingly, you will see that someone inserts an advertisement in the fourth post of the Moments, a large number of advertisements are embedded in public account articles, and various advertisements are also placed in videos. The biggest way to realize the traditional Internet is through advertising. We are Internet users. All browsing records and personal information are mastered during the use of the Internet. With these, we can deliver precise advertisements to advertisers.
It sounds fine. No commercial Internet company can provide services for free forever, but problems will arise in the process. This year's 315 Gala talked about AI robots making harassing calls. Someone bribed China Telecom and China Unicom operators to accurately obtain the information of people who called medical beauty institutions, and then sold it to other commercial organizations. This is a large number of problems that exist in the Web2 era. As an Internet user, information and privacy cannot be well protected. To solve this problem, China attaches great importance to it and has established a national data bureau. There is a data bureau department in each place. Our office is in the Xuhui Data Bureau’s administrative park. The country has discovered that data is very valuable and needs to protect its value and commercial value. There is no good way to solve it in traditional Web2, and something else is needed to solve it. We see that the solution is blockchain. This is my understanding of the first blockchain version iteration, and the focus of repairing the current Internet. The second point returns to the original intention of the birth of Bitcoin, hoping to create an online or Internet currency system.
The Web2 era is the information Internet. Web1 browses information, Web2 creates information, and sends information to other friends at the same time. But there is no way to solve the problem of value transfer. I often give an example. We are users of China Merchants Bank. In theory, if a manager of China Merchants Bank has the authority, he can remove a zero from all user bank accounts at two o'clock in the morning. We don't care because we don't know how much the account has two decimal places. Of course, China Merchants Bank will not do this based on its reputation or some other reasons, but there is an opportunity from a technical perspective. The problem can be solved well through blockchain. A crypto asset in the wallet is transferred from my account to Lawyer Niu's account. I have one less in my account and one more in Lawyer Niu's account. The entire transfer process cannot be tampered with or changed. Due to its non-tamperable nature, value transfer is achieved to some extent. This is what I think is a great charm or opportunity point for Web3, the next generation of the Internet, compared to the traditional Web2 Internet. The foreshadowing is a bit long.
Attorney Niu Xiaojing: Lawyer Liu is indeed a loyal fan of Web3. He explained Web3, blockchain, and the cryptocurrency Bitcoin in a very simple way from the underlying technology. I would like to ask, as a lawyer and founder of Mankiw, you have come into contact with many Web3 industries and practitioners. Which directions do you think are worth trying and entering at the moment?
China's Web3 opportunities: three major tracks and lawyers' perspectives
Lawyer Liu Honglin: I think that by 2025, the time node, blockchain technology will have developed for 14 years, and some things will be implemented seriously. From a logical point of view, the industry has several major business points to do. The first is asset issuance, Web3 projects, projects with tokens, overseas architecture, drawing tokens, and implementing a similar traditional IPO method. Traditional listing is called listing on an exchange now. This is asset issuance. But the biggest problem is that Chinese entrepreneurs are very passive in doing this in China. China is very sensitive to the issuance of encrypted asset tokens and ICO fundraising, which is not easy to do. If you want to issue assets, you can only go overseas. This is the first point.
Second, if there is asset issuance, there must be asset trading. The most popular or star project in the entire industry is the crypto asset exchange. I looked at the data last week. From January 2020 to February 2025, the financing data of the entire crypto asset or Web3 industry, the first is the underlying protocol public chain, and the second is Cefi, centralized exchanges and other institutions. The underlying public chain has raised about 28 billion US dollars in fourteen years, and the crypto asset exchange has raised 23 billion US dollars. At the current industry practice node, CEX is leading. I understand that 60% of the top ten crypto asset exchanges in the world are Chinese, or were once citizens of mainland China, and then went overseas for some reasons. Trading is a long-term track with clear commercial profits, whether it is traditional centralized or decentralized trading.
The third point is supporting business services. At the 2025 time node, in addition to making money from asset issuance and asset trading, the only thing we can see is supporting business services. When I looked at the industry as an entrepreneur in 2021, I found that I had no plan to leave mainland China, and I hoped to stay in the country. I can’t issue assets, I can’t trade assets, I can only provide peripheral business services. This is my consideration or thinking path for choosing the track and direction. From a micro perspective, what business services can a lawyer provide? Legal compliance is the old business. The entire legal industry was like this three years ago, and it will still be like this three years later in 2025. A large number of legal professionals or colleagues around me have three dissatisfactions with the industry.
The first one is looking down on you. When you mention crypto assets, blockchain, and Web3, they say you are engaging in fraud and money laundering, and they have filters and tinted glasses. The second one is not understanding. Many partners in the live broadcast room today are at this stage. What does it mean to not understand? The industry seems to be run by people outside, but people around me say that there are all kinds of people, and I don’t know how to get involved. I don’t know what kind of business lawyers can do in the industry. I participated in lawyer exchange activities. Everyone knew that we were in this industry, so they asked directly what kind of business lawyers can do in this industry. The simple understanding of the industry is that we can only unfreeze bank cards, or rescue someone when their bank card is caught for suspected fraud or fraud when they leave the country.
Everyone is stuck in single-point business. It is true that on video accounts and Douyin, there are a lot of lawyers doing this kind of business because the base is very large. But there are many overseas that cannot be prompted, and a large number of gray and black industries use cryptocurrencies, which often leads to bank cards being frozen. In our opinion, this cannot represent the needs of the industry. What we do is more positive and supports entrepreneurs. We help project parties or entrepreneurs from domestic Internet giants, such as Tencent, NetEase, and Alibaba, who want to use blockchain technology to support their entrepreneurial direction. We help with compliance. If you want to develop overseas, we help with overseas services, company registration structure building, and license application. Internet company startup teams or traditional Internet giants have done a lot of Web3 transformation. Web3 business is too novel. The novelty is that it is an emerging industry and it is very early. Entering the industry as a lawyer, all social phenomena can return to the perspective of legal relations and the perspective of traditional legal business.
A large number of criminal cases in the industry is one of our core businesses, and we have a dozen lawyers who specialize in this industry. We use cryptocurrency or blockchain to do projects, and understand encrypted assets as one of the tools of crime. We use the blockchain's concept of both good and evil to commit fraud or something. When it comes to virtual currency, criminal lawyers have a very large business space. The funny thing is that many lawyers told me that there is a lot of money laundering and fraud in this industry, so they can't come. But the problem is that if you are a criminal lawyer, shouldn't this be an industry and client that you particularly like? Because there are a large number of similar scammers or behaviors in the industry, there is a need for you to help with risk prevention and criminal defense. In addition to actual justice, there must be procedural justice. It depends on how you view the industry.
In addition to commercial and criminal services, we also help the industry explore compliance for cutting-edge projects. For example, using USDT to solve cross-border payment and collection issues, how to do anti-money laundering in the process, applying for licenses in specific countries and regions, and solving business flow and cash flow issues. This is what lawyers in the early stages of the industry can do. Conversely, lawyers can do things in these scenarios, and entrepreneurs in the industry can also do a lot of things.
Attorney Niu Xiaojing: Attorney Liu just introduced the Web3 industry observations. I can tell that Attorney Liu’s original intention in founding Mankiw was to build and explore the Web3 industry in a positive way, not just to defend criminal cases such as unfreezing bank cards. If an industry really wants to develop in the future, it will not always be on the edge or incomprehensible. I would like to ask Attorney Liu, based on more than three years of exploration, what barriers and challenges will traditional industries or traditional Internet industries face if they want to transform into Web3?
Barriers to Traditional Industry Transformation to Web3: Information Asymmetry
Lawyer Liu Honglin: The biggest problem is the elimination of information asymmetry. In the early days of the industry, there were a lot of real situations that only insiders or practitioners knew about. Let me give you a personal example. I started to enter the industry in 2022 and first focused on NFT.
There is a personal example in 2022, when NFT was very popular. As a lawyer, I wonder what legal needs and legal issues entrepreneurs and users in the NFT industry have? I searched this morning and found that most of my fellow lawyers discussed the nature of NFT intellectual property rights at a theoretical level, what legal relationship is the circulation transaction from a legal perspective, and whether it is protected by similar copyright law. Most lawyers focus on this perspective or point. But I joined dozens of NFT exchange groups and communicated with several entrepreneurs in the industry who were doing NFT, and found that no one paid attention to intellectual property rights. The question everyone is concerned about is what business qualifications are required if the secondary market is opened? If 10,000 collections are sold, and 4-5% of them are kept in your own pocket and sold in the secondary market through operations, will it constitute a front-end warehouse? Is there any criminal risk? This is what entrepreneurs in the industry are most concerned about. I want to express that when most of my fellow lawyers want to enter the industry and find business directions and opportunities, the most important thing is to get close to users and look at their real legal problems and needs. This is better.
Are there any compliance issues in centralized quantitative hedging business? The core issue is whether the investment trader has custody or has touched the client's funds, which is the biggest problem. Now a large number of quantitative funds are isolated through API. If the user's assets are taken publicly, there will be great risks.
Back to the point just now, if you want to do business in the industry, the most important thing is to get close to the industry first. We brag that if you are a lawyer who wants to do Web3 business in the Chinese community or in China, joining Mankiw is the best strategy. The Mankiw team is the team with the highest content of Web3 lawyers, legal affairs, and practitioners. We chat, pay attention to, and research real customer problems in the industry every day.
For everyone, we must first break the information asymmetry. This information asymmetry cannot be solved by reading books on blockchain and Web3 on the market. I started reading in 2017 and read until 2025, and there were no books written from a lawyer's perspective. We still have something. As a fellow lawyer or industry practitioner, if you really want to understand the real legal issues and compliance requirements in the industry, reading this thing is the most valuable. (A Guide for Players in the Cryptocurrency Circle to Avoid Pitfalls) The booklet describes different scenarios in the industry. This was researched and coded using a stupid method over the past three years, and it is also an important part of offline courses. All courses are built around this system. If you want to understand the industry situation, I recommend getting this book first. You can participate in the lucky bag or follow my account and join the group to receive it. If you want to further study systematically, the class is highly cost-effective, more systematic, and practical.
The first step is to break the information asymmetry in the industry, and the second step is to find a niche track or business field from an entrepreneurial perspective. If you are a criminal lawyer, now is the best practical node to switch to Web3 business. There are a large number of cases involving virtual currency and blockchain in China. Last night, a lawyer friend in a county in Henan, my hometown, called me and said that he had recently received many cases involving virtual currency in Zhengzhou. Many people in the county are doing online orders to collect U or duplicate U. They make one or two hundred yuan for each U collected. It is very comfortable to make 10,000 or 20,000 yuan a month in fourth- and fifth-tier cities. But the process may involve money laundering, helping letters or fraud. This is the business point of criminal lawyers. My friend has been a criminal lawyer for nearly ten years. When the client’s family told him about this, he was confused. He didn’t know what USDT was or how to trade U. Curious about how there could be victims of this thing, he called me for advice, and I restored the real business scenario of the industry to him. As a lawyer, if you don’t understand the industry business scenario or how everyone plays, it is difficult to serve clients well. Understanding the industry and understanding business are the differentiated competitive points of lawyers.
After resolving the information asymmetry in the industry, you need to find business opportunities in the industry to truly enter the industry. Lawyers and entrepreneurs cannot just do it based on faith and passion. It can be a hobby, but it cannot be a startup project. Business positive feedback is needed, and the best way to achieve this is to help clients solve problems and create value, and they will pay you. This is an important point for long-term entrepreneurship and finding direction in the industry.
Attorney Niu Xiaojing: Thank you Attorney Liu for your sincere sharing and answering my next question, how to gain insight into user needs. Attorney Liu said that we need to resolve information asymmetry to gain insight into needs. Sometimes lawyers or other industry professionals solve problems based on their industry expertise, but what clients really care about is not what method or means are used to solve the problem, but how to solve the problem. The process includes legal or other means, which clients do not care about. I would like to ask Attorney Liu to briefly talk about what stage Web3 is currently in?
The current state of Web3: a reflection of the 1990s Internet
Lawyer Liu Honglin: If we use historical comparison, I think it is a bit like the Internet in the 1990s. Why? The Internet in the 20th century was useful, but not that useful. When I was in elementary school, 10 years old before the year 2000, the Internet was just surfing the Internet. The computer at home required dial-up to the Internet, which was slow and difficult to browse text content. It was difficult to have consumer entertainment or browse freely. It cost 5 or 10 yuan to surf the Internet for an hour, which is very expensive, and it is very similar to the current transfer of assets on the Web3 chain. If you use the Ethereum network, the amount is about 10 US dollars or more, which is very similar. The second point is that the application scenarios are very weak. In the 1990s, the hottest Internet websites were portal websites, novel websites, and news and information websites. What is the hottest Web3 industry now? Is the exchange a blockchain? In my opinion, it is not, it is Web2 logic. The hottest Internet now may be stablecoins, cross-border payments, or using blockchain technology for evidence storage and electronic signatures. From an application perspective, it is very similar to the Internet in the late 1990s. It is useful, but only in niche areas or scenarios.
The third point is that it is very similar from the perspective of concepts and user intuitive feelings. In the 1920s, everyone said that the Internet was a liar, not knowing that there was a dog on the other side, and only bad boys went to Internet cafes to surf the Internet. Similarly, at this time point, ordinary people feel that Web3 is a liar and CX, and no serious person would go to Web3. From the perspective of technology, application, and the acceptance of the people, it is very similar to the Internet at that time. Conversely, from the perspective of entrepreneurship, we must have a perspective of the times. If at the end of the 20th century, people like Zhang Chaoyang and Li Yanhong, who came from serious companies and institutions in Silicon Valley overseas, gave up their annual salaries of one million and returned to China, set up a grass-roots team to make small applications, and started an Internet business. From an entrepreneurial perspective, this is our opportunity.
From a lawyer's perspective, Chinese lawyers need to make great efforts and contributions. Can they come up with a solution similar to the VIE system solution that helped Sina solve its overseas listing? China does not allow ICO issuance, but there are a large number of Internet talents and projects. Can they solve the problem of mainland Chinese entrepreneurs going global or going to Qianhai backstage through compliance solutions? Can lawyers help solve compliance solutions? This is also what we are exploring. Lawyers Wang and Mao in the team are studying the RWA track, which is to some extent the VIE structure of the Web3 era. Either the research is not successful, or the research is successful and benefits entrepreneurs in the Internet or Web3 era. In my opinion, as a pioneer in the industry and a practicing lawyer, in addition to doing business to earn lawyer fees, we may also be able to do things to promote the development of the industry. This is an important reason that motivates us entrepreneurs to delve into the industry.
Lawyer Niu Xiaojing: I was quite moved when Lawyer Liu talked about his original intention. Now seems to be a time when it is not very profitable, but as Lawyer Liu said, if we look at the present from the future, the industry that is not understood by most people may be in its infancy. It is a good opportunity and condition for young people and entrepreneurs without resources to start a business.
Lawyer Liu Honglin: Tonight I will talk to you about the industry from the perspective of an entrepreneur. I often share Mankiw's entrepreneurial story on occasions, and I want to tell you about my own case. It is still possible in mainland China. Correspondingly, I want to tell you today that if you want to work in the industry for a long time, it is important to control risks when solving industry know-how. Recently, my friends around me have encountered compliance problems, which are very passive. There are many pitfalls to avoid. If you want to avoid pitfalls, you can read (Coin Circle Players' Guide to Avoiding Pitfalls). If you want to learn systematically, you can purchase our offline courses.
My Web3 friend asked me what I should pay attention to if I want to start a wool-pulling studio? I shot a short video a few days ago to talk about this. The essence of wool-pulling is to take advantage of others, which is essentially the same as receiving red envelopes from Pinduoduo and letting others cut down the price to make 100 yuan. If you use your own account, time, and money to do this, it is completely legal and compliant, and there is no problem. On the other hand, if you take advantage of Pinduoduo, buy other people’s mobile phone numbers and QYC information on the Internet, break into other people’s websites and protocols in order to become bigger and stronger, or hire more people to invest in equipment, and raise funds from non-acquaintances. There are three crimes in the traditional Internet: illegal sale of personal information, illegal intrusion into computer information systems, and illegal fundraising. If you do this in Pinduoduo, it is a crime, and you face the same risks in a wool-pulling studio. If you don’t do the three things just now, it is legal.
Lawyer Liu Honglin: Starting from next week, Lawyer Niu will be in charge of the Entrepreneurship Web3 column, and it will get better and better. There is no shortage of braggarts in the industry, and there is no shortage of activities to teach people how to do things, but this is not what we want to do. We want to discover outstanding entrepreneurial players and projects in the industry, and let everyone see that this is a serious industry. This is why I talked with Lawyer Niu yesterday and wanted to continue the Entrepreneurship Web3 column. OK, Lawyer Niu, I have a question for you. I want to know how Lawyer Niu switched to Web3. I remember you went to stock up on Bitcoin in 2017?
Lawyer Niu Xiaojing: About how to switch to Web3. In fact, Lawyer Liu also mentioned this problem, which is the problem of information asymmetry. I think that in the current Internet era or the upcoming Web3 era, information problems can be solved through self-search and continuous thinking. The bottleneck lies in whether there is curiosity and courage to explore outward, which is the most important issue at the moment. As long as you are full of curiosity, you will find the entrance to the future.
Finally, we invited Lawyer Liu to talk about the prospects of Web3.
The future of Web3: a 5-10-year trend
Lawyer Liu Honglin: Lawyer Niu talked about his vision for the industry. I have always told everyone that if blockchain really enters the homes of ordinary people, like the current mobile Internet makes users happy, it will take at least 5-10 years, and everyone should have psychological expectations. But it will not starve to death in the next 1-5 years, but in the next 5-10 years. The combination of blockchain applications and business is a gradual process. By the time node of 2025, blockchain and the payment industry have been effectively combined. Many domestic businesses, especially those in the coastal areas of Jiangsu, Zhejiang, and Fujian, will use USDT encrypted assets as a payment method. The problem is that he receives payments in USD, and domestic expenses and payments are in RMB. How to solve the legality and compliance of the process? It is a very realistic business demand. Domestic cross-border acquiring and third-party payment companies that used to support this are now all flocking to Singapore and Hong Kong to do Web3 payments, and even individual C-end users like USDT encrypted bank cards.
By 2025, Web3 payment has become an entrepreneurial project with great commercial value, stable cash flow income, and is carried out in full legality and compliance. This year is cross-border acquiring payment, and next year stablecoins may do better. The Hong Kong dollar stablecoin regulatory sandbox has come out, but the real project has not been launched. In the next 1-5 years, the financial industry or payment track will slowly develop, and there will be others. Okay, this is my vision of the industry. It will take 5-10 years for everyone to find the right small business points and small entrepreneurial directions to cut in, and wait for the wind to come.
Lawyer Niu Xiaojing: Tonight’s theme is “Waiting for the Wind to Come”. Some friends left a message asking how is Mankiw Law Firm in Hong Kong? As far as I know, we have an office in Hong Kong. Please introduce it.
Lawyer Liu Honglin: We do not handle litigation cases in Hong Kong, but mainly provide financial compliance services. This includes the E49 license plate that is often mentioned in the news, and a large number of crypto-asset-related licenses under the EU framework at the end of last year. This is what the Hong Kong team mainly does. Judging from the composition of customers, about 30% come from overseas business. We have established business partnerships with many projects in this area in Hong Kong, Singapore, and the EU, helping to make compliance plans, supporting compliance frameworks on the global side, and looking for cost-effective places to apply for licenses. This year, the obvious feeling is crypto funds. After the United States passes the Bitcoin ETF in 2024, Hong Kong will follow suit and pass the BTC and Ethereum ETFs. Today I saw Lao Xue post on WeChat Moments saying that the price of Bitcoin is sluggish, around US$84,000, down 20-30% from the high point, but up 50% from this point last year. This is the case in terms of time.
Why have crypto funds become popular this year? Now a large number of family offices are paying attention to crypto assets. Next Thursday in Guangzhou, more than 100 people will share courses offline, and more than 100 domestic family office friends are all paying attention to this. It’s very simple. Their clients give their money to the family office, which helps with asset allocation and management. At the end of the year, they tell them that they have made a profit of 6% through unremitting efforts. People say that Bitcoin can reach 100,000 US dollars, so why don’t they allocate Bitcoin or crypto assets? This is a question that more and more high-net-worth individuals are asking the second party. Facing the stock market and traditional investment products, should traditional high-net-worth individuals, family offices, and fund managers look for industries with growth potential? This is an important point, and it is also the reason why they are paying attention to this track.
From the perspective of business services, this is our differentiated competitive point or entrepreneurial point. Now we are doing family offices, traditional identity planning, tax planning, and wealth inheritance. Hong Kong is very good in terms of what you can say or do. It is a good choice to focus on the Web3 track. Hong Kong will begin to slowly develop the businesses that were originally shady or underwater in 2023, such as cryptocurrency exchanges. There are at least 8 or 10 companies in Hong Kong, such as HashKey and OSL from Shanghai, which are cryptocurrency exchanges. Starting from 21 years, mainland China cannot trade assets, but Hong Kong can conduct business legally and compliantly. The supporting facilities are crypto funds, which means the logic of traditional US dollar funds or private equity funds, but the fundraising methods and investment targets are all crypto assets, which is also completely legal and compliant. If you have a Hong Kong brokerage account, you can buy Hong Kong stocks, or you can use your account to buy cryptocurrencies directly. It is a great existence. Knowing that ZhongAn Bank is cooperating directly with HashKey, you can buy BTC directly at ZhongAn Bank. This is what is already happening in the industry. It is not an underwater gray state, but a victory in the sun.
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