The development of Hong Kong dollar stablecoins is of significant importance to Hong Kong's position in the Web 3.0 field. It can serve as a bridge between traditional finance and the DeFi ecosystem and has the potential to become an indispensable part of the global financial system.
Article Author: 0x9999in1
Source: MetaEra
Recently, MetaEra's Hong Kong section has launched significantly, leading the series of events celebrating the second anniversary of the 'Hong Kong Cryptocurrency New Policy', with an important part being 'High-End Dialogue: Influential Figures in Hong Kong Web 3.0'. The person interviewed in this issue is Qian Fenglei, the chairman of Hengfeng International Holdings Co., Ltd.
Person Introduction
Qian Fenglei, a well-known entrepreneur, senior investor, and philanthropist. He currently serves as the chairman of Zhejiang Hengfeng International Holdings Co., Ltd., with industries spanning Mainland China, Macau, Hong Kong, and Southeast Asia. Qian Fenglei is renowned for his generous donations to charitable causes and has received the 'Top Ten Charity Stars' award, being shortlisted for various charity rankings.
Key Insights
● The core values of Web 3.0 are openness, privacy, and co-construction. It achieves decentralization through technologies such as blockchain and smart contracts, bringing new possibilities to financial services.
● I believe that the policies and measures taken by the Hong Kong government to promote the development of Web 3.0 are very positive and forward-looking.
● The development of Hong Kong dollar stablecoins is of significant importance to Hong Kong's position in the Web 3.0 field. It can serve as a bridge between traditional finance and the DeFi ecosystem and has the potential to become an indispensable part of the global financial system.
● Hong Kong dollar stablecoins and digital Hong Kong dollars (CBDC) can develop complementarily. Digital Hong Kong dollars are suitable for circulation within Hong Kong, while Hong Kong dollar stablecoins are more suitable for cross-border trade and service payment settlements.
● The development of the Web 3.0 industry has transitioned from a grassroots era to an institutional era, moving from disorder to a gradually regulated state.
● The application of blockchain technology in charity and public welfare not only improves transparency and efficiency but also enhances public trust, which is crucial for the sustainable development of charitable causes.
● Our vision for external output is to become a great company like Alipay in the cryptocurrency sector!
Full Interview
MetaEra: Mr. Qian, your Hengfeng International has been relatively low-profile, and there are few related media reports online. Does this interview with our Web 3.0 new media signify a significant change in the company's external strategy?
Qian Fenglei: Hengfeng International has always focused on investment management in traditional finance and the virtual domain. Currently, the company is undergoing an important transformation into a technology-driven financial company, especially in the payment sector based on Web 3. This industry is still in the early rapid development stage, facing many challenges and uncertainties in terms of technological development, business application scenarios, compliance, and regulation. More resources, including funding and human investment, need to be integrated. We are pleased to announce that we have just completed a $100 million special fundraising, aiming to integrate more upstream and downstream resources for the development of the payment industry.
MetaEra: As someone who has deep roots in traditional finance for many years, how do you view Web 3.0? What opportunities and challenges do you think it will bring to you or the traditional asset management industry, and how will you respond?
Qian Fenglei: Web 3.0 is generally considered the next generation of the internet where all data and content are stored on the chain and owned by users. Its core appeal is to create a more decentralized and user-friendly environment and effectively counter the monopolistic giants of centralized internet. The core values of Web 3.0 are openness, privacy, and co-construction. It achieves decentralization through technologies such as blockchain and smart contracts, bringing new possibilities to financial services.
I believe that the opportunities provided by Web 3.0 involve various aspects. In the investment field, Web 3.0 offers new investment areas such as crypto assets, NFTs, and DeFi, which bring new growth points to the traditional asset management industry. In terms of enhancing efficiency, Web 3.0 can reduce transaction costs and improve efficiency through smart contracts and blockchain technology, enabling low-threshold, high-liquidity trading of assets globally. Regarding data assetization, Web 3.0 facilitates the assetization of data, achieving efficient circulation of data, supporting the high-quality development of the digital economy.
Nevertheless, Web 3.0 still faces many challenges, the three main challenges being regulatory uncertainty, technological risks, and market volatility. Regulatory uncertainty refers to the involvement of multiple financial regulatory policies in the actual operation of decentralized lending. Regulatory policies in various countries are still in the research and exploration stage, lacking a mature regulatory model, thus posing risks of regulatory policy uncertainty to the industry. Technological risks include potential issues such as smart contract vulnerabilities and blockchain network scalability. Additionally, market volatility is a concern for many, as decentralized lending based on the logic of rising token prices might amplify overall market price fluctuations during price increase and decrease periods.
Our response strategy includes strengthening regulatory cooperation, collaborating with regulatory agencies, and actively participating in the establishment of regulatory frameworks to ensure business compliance. You may have seen that we are currently actively cooperating with relevant regulatory agencies of the Hong Kong government, and all business operations are being conducted in compliance. Another point is technological innovation and risk management, continuously focusing on and investing in key technologies such as blockchain and smart contracts, while establishing corresponding risk management systems to address technological risks.
MetaEra: We see that Hengfeng International, as a licensed asset management company in Hong Kong, has sent positive signals to virtual assets. Can you inform us what virtual asset allocations you have made? Does Hengfeng International have an estimated proportion for crypto asset allocation?
Qian Fenglei: Hengfeng International will enter this emerging market as a dedicated entity focused on the Web 3 field. We have actively allocated mainstream virtual assets in the market and expect to further increase our positions in the future, but this is just our basic asset allocation. Our core direction remains in financial technology, focusing on heavy investments in the infrastructure development of Web 3, especially in payment products and practices. Currently, we have already started proactive actions through self-research and mergers and acquisitions, and we will soon announce a series of our acquisition plans to achieve rapid resource and industry integration.
MetaEra: Considering the Hong Kong government's positive attitude and policy support for the Web 3.0 industry since the issuance of cryptocurrency policies in October 2022, industry activities have been held frequently. As a traditional financial practitioner in Hong Kong, how do you evaluate the policies and measures taken by the Hong Kong government to promote the development of Web 3.0? What areas do you think can be further strengthened?
Qian Fenglei: As a traditional financial practitioner in Hong Kong, I believe that the policies and measures taken by the Hong Kong government to promote the development of Web 3.0 are very positive and forward-looking. Below is my evaluation of the Hong Kong government's policies and areas that I believe can be further strengthened.
First, let's look at policy support and market response. Since the Hong Kong government issued the (policy declaration regarding the development of virtual assets in Hong Kong) in October 2022, it has shown a positive attitude and policy support for the Web 3.0 industry. This series of policies not only indicates the government's stance and guidelines on Web 3.0 but also sets the direction for future policy development, such as policies on stablecoins and tokenized assets (RWA). The market has responded enthusiastically, demonstrating the positive impact of the policy.
Next is the essential regulatory framework and industry development. The Hong Kong government has gradually introduced a series of supportive and regulatory policies, including the establishment of the Web 3.0 Association, the Web 3 Hub Fund, and the implementation of a new licensing system for virtual asset service providers. These all provide a new starting point for the development of the Web 3.0 ecosystem and help establish a more regulated and healthy market environment, promoting the sustainable development of the industry.
To ensure the healthy development of Web 3.0, talent policies and resource investments are also important. The Hong Kong government has proposed several talent-related policies in its policy report, such as establishing a 'Talent Service Office' and expanding the 'High-end Talent Pass Scheme'. These policies help attract and cultivate the technological talents needed in the Web 3.0 industry. Meanwhile, the government has allocated HK$62 billion for areas that contribute to the future economy, including financial technology (including virtual assets, Web 3), demonstrating the government's emphasis and investment in the Web 3.0 industry.
In summary, the Hong Kong government has already taken a series of positive policies and measures to promote the development of Web 3.0, but there is still room for further improvement, especially in regulatory coordination, international cooperation, and public education.
MetaEra: The Hong Kong government is exploring the possibility of turning the digital Hong Kong dollar (e-HKD) into a stablecoin. We have seen that Hengfeng International has also strategically invested as one of the first three institutions in the 'sandbox' testing of Hong Kong dollar stablecoins. Can you share more details? How do you view the development of Hong Kong dollar stablecoins?
Qian Fenglei: We have signed confidentiality agreements with investors and are currently unable to disclose more details.
The development of Hong Kong dollar stablecoins is of significant importance to Hong Kong's position in the Web 3.0 field. It can serve as a bridge between traditional finance and the DeFi ecosystem and has the potential to become an indispensable part of the global financial system.
Although the stablecoin market is currently mainly dominated by USD-supported tokens, with the consolidation of regulatory frameworks, stablecoins supported by more fiat currencies are expected to grow. The development of Hong Kong dollar stablecoins faces challenges in competing with USD stablecoins, but it also has immense market potential, especially in cross-border payments and trade financing.
Hong Kong dollar stablecoins and digital Hong Kong dollars (CBDC) can develop complementarily. Digital Hong Kong dollars are suitable for circulation within Hong Kong, while Hong Kong dollar stablecoins are more suitable for cross-border trade and service payment settlements.
The development of Hong Kong dollar stablecoins is a complex but opportunity-filled field. The Hong Kong government has already taken a series of positive measures to promote the development of this area, but further exploration and innovation are needed in terms of technological implementation, market promotion, and regulatory coordination.
MetaEra: In the face of the rapidly innovating Web 3.0, the speed of new project emergence is very fast. Are your companies or individuals considering increasing investments in the primary sector? Will you establish a venture capital institution focused on investing in the Web 3.0 field?
Qian Fenglei: Hengfeng International has entered this field through specialized fundraising, particularly in Web 3 payments. Both at the company and personal levels, we will maintain an ALL-IN attitude in this field to continue contributing to the industry's development. We have already begun investing in related companies in the industry chain and are planning to establish a professional investment institution focused on the Web 3 field.
MetaEra: Considering the rapid development and wide application of Web 3.0 technology, what strategic planning does your company have in the next five years to ensure competitiveness in this emerging field?
Qian Fenglei: First, we will strategically focus on the Web 3 payment sector. The development of the industry from infrastructure, public chains, and protocol to the prosperity of DAPPs inevitably revolves around payment, which aligns with the development path of Web 2. This is a significant market that requires substantial resource investment. The development of this industry is transitioning from a grassroots era to an institutional era, moving from disorder to a gradually regulated state. Hengfeng has emerged at such a pivotal time, leveraging our past deep background and resources in traditional finance and just completing a $100 million fundraising. This is just the beginning of our integration of traditional industries and the crypto sector, and our vision for external output is to become a great company like Alipay in the cryptocurrency sector!
MetaEra: You are personally passionate about charity and have been listed on the Forbes charity list, ranking among the top hundred philanthropists. In the era of Web 3.0, do you believe that blockchain technology can better serve charity and public welfare?
Qian Fenglei: Blockchain technology provides a decentralized database, and its transparency and immutability ensure that the processes of donations and resource allocation are more transparent and trustworthy. The public can track the flow of funds, ensuring that donations are used correctly, reducing the risks of corruption and misuse of funds.
Blockchain technology can create decentralized fundraising platforms, allowing donations to flow directly to beneficiaries, reducing intermediaries. Smart contracts can ensure that donations are automatically released according to agreed conditions, eliminating trust issues associated with traditional platforms.
Smart contracts can record and execute charitable donation agreements in a programmed manner. Once specific conditions are met, such as raising a certain amount, donations can be automatically released to beneficiaries. This not only reduces the risk of human intervention but also improves the efficiency of the donation process.
The traceability capability of blockchain can ensure the traceability of donations. Donors can track how their donations are used, ensuring that donations are correctly allocated to projects, which increases public trust in charitable organizations and promotes the sustainable development of public welfare.
In summary, the application of blockchain technology in charity and public welfare not only improves transparency and efficiency but also enhances public trust, which is crucial for the sustainable development of charitable causes. With further technological advancements, we have reason to believe that blockchain will play a more significant role in social welfare and charity.
