Time flies, and 2024 is coming to an end. According to international conventions, it is time to review the industry developments of the past year.
This year, compliance has always been the main theme of China's Web3.0 development. From the promotion of regulatory systems such as virtual asset service provider (VASP) licenses and stablecoins in Hong Kong, to the exploration of RWA financing by mainland Chinese enterprises, and the cross-border application testing of the digital renminbi, the interaction between policies and markets is continuously driving the standardization process of the Web3.0 industry.
Next, Lawyer Mankun will review the annual hot events and trends based on the compliance keywords of 2024.
Compliance opening, the rise of Asia's Web3 bridgehead
In 2024, the most significant good news for China's Web3.0 is the compliance opening in Hong Kong. The policy centered on virtual asset service provider (VASP) licenses has not only brought clear regulation to the entire Chinese market but has also comprehensively promoted compliance opening, attracting global capital and enterprises, gradually establishing Hong Kong's position as a hub for crypto assets in Asia.
In 2024, virtual asset trading platforms, including HashKey Exchange, OSL, HKVAX, HKbitEX, Accumulus, DFXLabs, and EX.IO, were approved and officially opened trading to retail investors in Hong Kong, marking the maturation of the compliance system in the Hong Kong virtual asset market. Meanwhile, the Hong Kong regulatory authorities further clarified compliance boundaries, with regulatory details for stablecoin issuers, custodians, OTCs, and other sub-sectors being rolled out to ensure market safety and transparency.
These initiatives not only enhance the credibility of Hong Kong's digital asset market but also attract dual inflows of capital and enterprises. As of November 2024, Hong Kong's Cyberport has gathered over 270 Web3 concept companies, with total financing exceeding 400 million Hong Kong dollars. The BTC spot ETF launched in the first half of this year has already completed nearly 500 million dollars in net inflow. Furthermore, Hong Kong actively hosts various Web3 events, attracting global industry participants, such as the Hong Kong FinTech Week held in October this year, which attracted over 500 exhibitors and tens of thousands of attendees.
As of the time of writing, ongoing Web3.0 projects in Hong Kong include the Ensemble sandbox program, e-HKD+ program, and more. Additionally, more virtual asset trading platforms are either applying for or awaiting approval. As Asia's Web3 bridgehead, Hong Kong is gradually opening a compliant virtual asset market through policy leadership and market-driven approaches. In the future, with the collaborative advancement of regulation and technology, Hong Kong is expected to continue leading in Web3 compliance innovation, providing a model and reference for other regions.
Dual-track exploration, banning trading and protecting property concurrently
In 2024, the judicial system in mainland China further clarified its position on cryptocurrency regulation and legal application. Courts across the country delineated legal boundaries for the circulation and use of virtual currencies based on the spirit of the '924 document', while gradually recognizing their economic value in property disputes.
In judicial practice, courts across the country generally emphasize that virtual currencies cannot be used as financing, payment tools, or trading mediums. For example, the Shenzhen court ruled that paying wages with virtual currency is an invalid act; the Xiangyin court determined that the use of virtual currency for debt repayment is invalid. These cases further consolidate the positioning of virtual currency as 'prohibited circulation' within the mainland legal framework.
At the same time, some cases also show the judicial system's flexible handling of property rights protection. The Shanghai High People's Court explicitly recognized the property attributes of virtual currencies in a financing contract dispute case, allowing them to be legally protected as property rights. In addition, in several earlier cases of cryptocurrency theft, judges classified the cases under property theft rather than illegal acquisition of computer data, further reflecting the recognition of virtual currencies' property attributes in judicial practice.
This series of cases not only provides clearer adjudication basis for the legal application of virtual currencies but also emphasizes their circulation restrictions and investment risks.
Policy support, blockchain technology accelerates landing
In stark contrast to the regulation of virtual currencies, mainland China maintains a proactive attitude of support and promotion for blockchain technology and related applications. For instance, during the second session of the 14th National Committee of the Chinese People's Political Consultative Conference held from March 4 to 10, 2024, the widespread application of blockchain technology as a technological innovation was listed as a key topic. During the meeting, proposals were made to strengthen basic research on blockchain technology, enhance independent innovation capabilities, and support its extensive application in key areas such as finance, logistics, and energy.
Correspondingly, local governments have introduced supportive policies. For example, on February 23, the Hangzhou Municipal Bureau of Commerce formulated and publicized the 'Implementation Plan for Promoting Digital Trade Strong City Three-Year Action Plan (Draft for Comments)', which mentioned guiding the development of new formats such as the metaverse, digital twins, and digital collectibles and promoting the trade of digital products such as digital media and digital publishing; on March 22, the Shandong Provincial Department of Industry and Information Technology released the 'Shandong Province Blockchain Technology Innovation and Industrial Development Action Plan (2024-2025)', which mentioned integrating the application of blockchain, big data, and the metaverse technologies to assist in the development of new cultural and creative products such as digital intangible cultural heritage, digital collectibles, and digital trendy toys.
Meanwhile, the promotion of the digital renminbi (e-CNY) continues to accelerate, especially achieving breakthroughs in cross-border payments and wholesale settlements. In February, the Shanghai Municipal Government released the 'Implementation Plan for Fully Connecting International High-Standard Economic and Trade Rules to Promote the High-Level Institutional Opening of China (Shanghai) Pilot Free Trade Zone', proposing to orderly advance the digital renminbi pilot and expand application scenarios; in November, Shanghai held a working deployment meeting for the digital renminbi pilot application and formulated a new round of action plans. In addition, the pilot scope of the digital renminbi in Hong Kong and Macau has further expanded, with the scale of cross-border transactions steadily increasing, becoming an important component of China's Web3.0 infrastructure.
Overall, in 2024, the policy support surrounding blockchain technology and its applications in mainland China has not only promoted the construction of digital financial infrastructure but also provided new compliant development paths for the Web3.0 ecosystem. In future developments, these innovative applications will continue to deepen, laying the foundation for the digital upgrade of the domestic market and international competitiveness.
RWA, a new paradigm for cross-border financing for Chinese enterprises
In 2024, the tokenization of real-world assets (RWA) gradually transitions from concept to implementation, becoming one of the core trends in the Web3.0 industry. In this wave, Chinese enterprises are also beginning to explore compliant cross-border financing models, providing new solutions for the integration of traditional assets and the digital economy.
In August 2024, AntChain and Longxin Group jointly launched a new energy charging pile RWA project and successfully completed financing of 100 million yuan, opening up new compliance paths for the integration of traditional assets and the digital economy. Subsequently, in October at Hong Kong FinTech Week, AntChain officially launched the RWA infrastructure 'Two Chains and One Bridge' cross-border platform, focusing on the tokenization of traditional assets such as real estate, bills, and supply chain finance, promoting the standardization and compliance construction of asset cross-border circulation.
On the policy front, Hong Kong has taken the lead in exploring the compliance path for RWA. Various measures, including the e-HKD pilot project and the Ensemble sandbox program, are gradually improving the compliance standards of the RWA industry, providing security for cross-border transactions. In contrast, while mainland China has yet to introduce specific policies targeting RWA, it has laid the foundation in blockchain technology and digital financial infrastructure construction. Coupled with Hong Kong's pioneering exploration in the RWA field, it has created conditions for mainland enterprises to participate in this trend through offshore markets.
With the continuous improvement of the regulatory framework and the expansion of cross-border application scenarios, RWA is expected to become an important tool for digital financing and global asset allocation for Chinese enterprises in the future.
Going overseas in crypto, seeking new paths for compliant participation
In 2024, against the backdrop of rapid development in the global Web3.0 industry, Chinese enterprises are gradually turning their attention to Hong Kong and even overseas markets in the face of a strict regulatory environment at home, exploring new paths for compliant participation. In particular, Hong Kong's open policies, mature regulatory system, and shared cultural system undoubtedly make it the most attractive option. At the same time, regions like Malta in Europe, Thailand in Asia, and the UAE in the Middle East have also become important choices for Chinese enterprises to lay out Web3.0 due to their flexible financial policies and open digital economy environments.
However, going overseas does not mean evading regulation. On the contrary, it requires enterprises to pay more attention to compliance requirements, ensuring that global operations are conducted within a legal framework, from building legal structures to cross-border capital flows. For example, flexibly using offshore funds and digital asset custody platforms within the allowable policy range to gradually explore feasible paths for participating in the digital economy.
Summary by Lawyer Mankun
In 2024, China's Web3.0 industry gradually shows a trend of compliance through policy adjustments and market innovations. From the leading VASP licensing system in Hong Kong to the trial of RWA cross-border asset management platforms, and the expansion of crypto going overseas, these keywords not only outline the contours of China's Web3.0 compliance development but also provide a reference for the further evolution of future policies.
For enterprises, compliance is the fundamental prerequisite for embracing the Web3.0 market, while cross-border layout, technological innovation, and policy communication are key breakthrough points. In the context of accelerating global competition, how to flexibly layout within the compliance framework and seize market opportunities will become a core issue that Chinese enterprises must address.