As the blockchain conference in Hong Kong got underway, Lan Kwai Fong finally returned to its bustling state a few years ago.
01Hong Kong's traditional finance fails
In recent years, people in the crypto circle know that Hong Kong has begun to embrace crypto, but what people in the crypto circle may not know is that Hong Kong’s traditional financial sector has actually not been doing well in recent years.
This is a table compiled by a well-known data expert (Lao Man, the same below) based on the data released by the Hong Kong Stock Exchange.
The scale of IPOs of the Hong Kong Stock Exchange this year may be just over HK$100 billion.
Perhaps this year, the ICO scale of Hong Kong's crypto projects will exceed the IPO scale.
Many people say that the environment in Hong Kong has changed in recent years. There are external reasons, such as the withdrawal of European and American capital from Hong Kong, or the inclusion of Hong Kong in the scope of sanctions; of course, there are also internal reasons.
But the good thing about the crypto industry is that you are allowed to do it, unlike some places where there are barbaric acts of forcibly arresting people and stealing coins.
The crypto industry does not have many requirements for other environments:
The team is distributed and has no requirements for the office environment
Most of the income and expenditure are paid through encryption, and traditional financial facilities are not required to support it.
When it comes to regulation, most decentralized projects operate under a compliance framework, and the scams that really make a big splash are all centralized projects.
02The Hong Kong government is running out of food
Affected by various factors, the Hong Kong government has not had a good time and has been living off its past capital in recent years.
The Hong Kong government is different from the Chinese/American governments. The deficits of the Chinese and American governments can be repaid by printing their own money.
However, the Hong Kong government's deficit can only be repaid by earning US dollars while maintaining the linked exchange rate system between the Hong Kong dollar and the US dollar.
The Hong Kong government currently has a total asset of more than 600 billion yuan, which has been halved from its peak. At this rate of consumption, the assets can still last for 2 to 3 years.
03 Other industries cannot be relied upon
Hong Kong's retail industry has also shrunk significantly. On weekends, all the people from Hong Kong come to Shenzhen to buy things, and Sam's Club is packed with Hong Kong people.
Mainland Chinese people don't go to Hong Kong to consume much anymore. Hong Kong prices are high and service is poor. Wouldn't it be better for high-end customers who need to consume in Europe and the United States? It's also convenient to go to Southeast Asia.
If it weren’t for the crypto industry, I wouldn’t go to Hong Kong very often.
Hong Kong's foreign trade is also in trouble. Hong Kong itself has no manufacturing industry, and its foreign trade mainly relies on mainland China's re-export trade:
Other industries are not good, and Hong Kong's real estate is certainly difficult to do:
04 Apart from encryption, Hong Kong has few options
In this way, everyone can see the situation currently faced by the Hong Kong government.
Apart from encryption, there are actually not many other industries to choose from, and it seems difficult at present whether encryption can provide blood transfusions to the Hong Kong government in the short term to make up for the blood loss in other industries.
Currently, most projects just hang a sign in Hong Kong, raise funds in Hong Kong, and finally go to major exchanges.
The biggest move by the Hong Kong government at present is to issue licenses to several exchanges. To be honest, global crypto investors do not really recognize the value of the Hong Kong government's licenses, and the liquidity of these licensed exchanges is also pitifully low.
This year, as dex is gaining momentum, the trading volume of dex supported by mainstream public chains is stronger than that of many centralized exchanges. In this case, it is not very wise to still fantasize about supporting centralized exchanges with a local license.
I personally suggest that the Hong Kong government should focus on maintaining its linked exchange rate system and leave everything else to the market.
I will continue running in the afternoon. Bye~
