Has the Era of Web3's Prosperity Arrived?

These past few days have been crazy.

From the surge of Guotai Junan to the explosive rise of Shengli Securities,

to the explosive rise of OK Group this morning,

followed by Hong Kong releasing its cryptocurrency policy 2.0 in the afternoon, igniting the entire market.

Some say that the current cryptocurrency and stock market is like the era of prosperity.

If a prosperous era has truly arrived, everyone has a chance to become a tycoon.

I am not a policy expert, but I will make some layman’s observations:

The Hong Kong government's policy:

On August 1, a stablecoin issuance license was issued.

The intensity of this move is very high, and the pace is fast.

It lays the groundwork for compliance in cryptocurrency trading, custody, information services, and stablecoin issuance.

RWA is also ready to go.

Digital asset custody services surprisingly had no licenses issued in Hong Kong before.

I find this a bit surprising.

Such a fundamental aspect had no license issued before.

The larger picture still shows a strong West and a weak East; the U.S. is still likely to be the dominant force in Web3.

Hong Kong may just be a regional financial service center for Web3.

All the positive news today should be viewed from this perspective.

On the policy level, the U.S. is at the forefront. The relaxation we see in Hong Kong

is more like a timid experimental field.

The U.S. is betting with its largest economy; it is the world's largest single financial market.

We are trying this with Hong Kong, which only has 7.5 million people.

If these licenses in Hong Kong cannot serve users from mainland China or overseas, and only revolve around the 7.5 million people in Hong Kong, it remains largely insignificant.

What excites us about Hong Kong today is something that Americans practiced ten years ago.

Why is Hong Kong a financial center?

Hong Kong's value does not lie in its local market,

but in its connectivity, in the low friction costs for financial capital to flow in and out, and in being able to invest in assets in some small country in Africa from Hong Kong.

A bank card from Hong Kong can handle multiple currencies and invest in hundreds of countries worldwide.

In India, it’s one currency, only able to invest in India.

Hong Kong's value lies in its openness; what does this openness mean?

It means that from Hong Kong, one can easily enter the chains of other countries with low gas fees,

transforming funds from global nations as well as various yielding and equity opportunities into chains.

Hong Kong is a cross-chain bridge.

Because the cross-chain bridge itself also has TVL, and based on this TVL, it can provide top-notch financial services.

Can Hong Kong's crypto licensed businesses extend to overseas?

Trading can. Anyone can come to Hong Kong, provide KYC to open an account at an exchange, or even open an account remotely. The flow of crypto assets is not restricted by the local government.

Custody, I think it can. Cryptos from various countries can be custodied in Hong Kong. However, there are many other places around the world that can provide custody.

Stablecoin issuance, I think has a very strong ability to extend.

Since it is backed by a stable Hong Kong dollar or USD, many institutions will recognize it. Even if the government does not acknowledge it, it cannot stop institutions from liking it.

Trading + stablecoin issuance will both be very impressive licenses.

The business potential is enormous.

Now Hashkey already supports user account openings from 17 countries.

How to explain why Hashkey hasn't thrived?

It’s not that Hashkey can only operate in Hong Kong,

but that compliance itself does not constitute an advantage for crypto exchanges at this stage.

If only compliance allows business to be conducted, then compliance is an advantage. If one can operate without compliance, then compliance becomes a disadvantage.

This statement can be reversed: as long as mainstream countries in the world are still in a rough state regarding cryptocurrency trading, and one can operate without compliance,

then Hashkey does not have a compliance advantage.

Coinbase is in the same predicament.

Coinbase supports clients from over 100 countries. It is compliant in the U.S. Why can’t it win against Binance and OK?

It’s because it can only be powerful in the U.S., and outside of the U.S., it feels restrained.

In the end, compliance does not mean leniency.

It may be very strict compliance.

Some friends say that opening accounts for compliant contracts in Hong Kong requires 6 million HKD + company structure, and KYC is very difficult.

If it is very strict compliance, it may be less free than a rough state.

I personally look forward to lenient compliance.