Author: Xiao, PANews
At the recent launch conference of the "2024 Shanghai Web3.0 Innovation Ecosystem Construction Research Report" (hereinafter referred to as the "Report"), representatives from government agencies, universities, research institutes, and related industries agreed that the development of Web3.0 is crucial to the information technology industry. The "Report" was guided by the Shanghai Science and Technology Commission and jointly released by the Jiefang Daily and the School of Economics of Fudan University. It is Shanghai's first industry report on Web3.0.
The industry ecosystem has taken shape, and RWA is about to emerge
In order to fully understand Web3.0, the report writing team conducted extensive research on Web3.0 upstream and downstream companies, including underlying technology development companies Conflux and Artela, security audit companies Certik and ZAN, data analysis company Trusta Labs, infrastructure providers TRON and Binance, and Web3.0 application user COSCO Shipping.
Through in-depth and comprehensive research, the report points out that the global Web3.0 has initially formed an ecosystem with a multi-computing network, a distributed data storage network, and a high-speed communication network as the foundation, and blockchain infrastructure as the core. At present, the core technology innovation of blockchain is active, the scale of the industry is growing steadily, and the strength of enterprises is constantly demonstrated. Ethereum, Solana, Polygon, etc. have formed a rich, high-performance, and secure public chain ecosystem. The global pattern of one super and many strong chains with Ethereum as the main one and multiple chains coexisting is gradually taking shape.
Regarding the next development of Web3.0, both the report and the experts at the meeting mentioned the trend of "RWA".
RWA is the abbreviation of "Real World Asset", which means "tokenization of real world assets". Currency, bonds, trade finance, energy and other assets can become anchors of RWA. The report points out that in the next 5-10 years, with the exploration of governments, regulators and financial institutions, traditional finance and funds will accelerate with RWA, forming multiple tokenized trading networks of funds and assets around the world, and promoting the interconnection of global financial payment transactions.
At present, as policies, technologies and markets continue to mature, Web3.0's financial assets and technologies have begun to be accepted by many governments and mainstream financial institutions. In this context, the tokenization of funds represented by Fiat-based Stablecoins, Tokenized Deposits, and Central Bank Digital Currency (CBDC), and the tokenization of assets represented by Real World Assets (RWA), have developed and grown rapidly.
For example, the IMF is already developing a central bank digital currency (CBDC) platform to enable transactions between countries. In March this year, BlackRock launched its first tokenized fund issued on the Ethereum network, the BlackRock USD Institutional Digital Liquidity Fund (BUIDL).
Among various explorations, Hong Kong's practice is also noteworthy. With the participation of the Bank for International Settlements (BIS), the Hong Kong Monetary Authority, the Bank of Thailand, the Digital Currency Research Institute of the People's Bank of China and the Central Bank of the United Arab Emirates jointly developed the "Multilateral Central Bank Digital Currency Bridge Platform" project to help relevant central banks accelerate the use of CBDC to improve cross-border payment efficiency and solve many bottlenecks in traditional international cross-border payments.
On May 7, the Hong Kong Monetary Authority announced the list of the architecture working group of the wholesale central bank digital currency (wCBDC) project Ensemble to support the interoperability between wCBDC, tokenized currencies and tokenized assets. The initial members include the HKMA, the Securities and Futures Commission, the Hong Kong Center under the Innovation Hub of the Bank for International Settlements, the CBDC Expert Group and 7 corporate institutions, namely Bank of China (Hong Kong), Hang Seng Bank, HSBC, Standard Chartered Hong Kong, HashKey Group, Ant Digits and Microsoft Hong Kong. This move is also seen as a key step for Hong Kong to move towards the RWA market.
When TRON accepted the preliminary research of the "Report", it pointed out that the popularization of stablecoins and RWA is a development process that blockchain and encryption technology must go through. With the approval of the Bitcoin spot ETF, stablecoins and RWA will usher in a period of rapid development and drive the development of the entire Web3 industry.
"RWA will be a trend in the future. It not only involves on-chain and off-chain interactions, but also requires regulatory compliance. Under the premise of clearing up the regulatory level, the advancement speed and efficiency of RWA will be relatively high." Gu Ronghui, co-founder of security agency CertiK, said at the press conference.
Mainstream funds enter the market, and "waiting for the wind to come" is inseparable from top-level design
Along with the development of RWA, ETFs are attracting mainstream funds to the Web3.0 market. In January 2024, the U.S. Securities and Exchange Commission (SEC) approved the Bitcoin spot ETF for the first time in history, authorizing the first batch of 11 ETFs to start trading.
Similarly, the Hong Kong Securities and Futures Commission approved the Bitcoin ETF and Ethereum ETF products of China Asset Management (Hong Kong), Harvest Global, and Bosera International in April. Just on June 20, the Bitcoin ETF was listed on the Australian major stock exchange for the first time. The report believes that the listing and trading of spot ETFs is a significant step in the Web3.0 industry, which will greatly improve the liquidity of the market and further stimulate the innovation and development of the ecosystem.
The report believes that with the listing of cryptocurrency ETFs, Hong Kong's goal of becoming a Web3.0 hub is becoming clearer. However, it can also be seen that the Hong Kong market has been adhering to the principle of steady and sustainable development for mainstream funds entering the Web3.0 market from the beginning, including the passage of the Anti-Money Laundering and Terrorist Financing (Amendment) Bill 2022 and the introduction of credible regulatory agencies to supervise exchanges with "double licenses". At present, only HashKey Exchange and OSL Digital Securities have obtained Hong Kong virtual asset licenses.
Referring to the practices of the Hong Kong market, the report and participants believe that they reflect that strengthening top-level design is one of the top priorities for the current development of Web3.0.
Meng Yan, the director of SFT Labs, pointed out that Web3.0 is in the early stage of great development, "having one condition and waiting for two trigger points". "One condition" mainly refers to technological development, that is, high-performance blockchain, privacy computing, ZK zero-knowledge proof, security audit and other technologies have made great progress; one of the "two trigger points" is the external financial environment, mainly macro-monetary policy, and the other is regulatory policy. He also added: "Web3.0 is currently dormant, waiting for a loose macro environment. In addition, since the world has not established a unified regulatory system, there are always many risks of speculation and fraud in this market, which poses a long-term challenge to the healthy development of Web3.0."
Experts suggest studying “Token Economics”
"I am in Melbourne to communicate with you about the development of WEB3.0 overseas." Meng Yan, the manager of SFT Labs and co-author of the ERC-3525 token standard, expressed his views via video link. In his view, WEB3.0 is on the eve of great development, just like the Internet before 2005, which is optimistic about it, but has not yet entered the fast lane of development. At present, the technical reserves in this field are relatively rich, and high-performance blockchain, privacy computing, real-world assets... have laid a solid foundation for the future development of the industry. However, in terms of external conditions, macro-monetary policy and regulatory policy are also needed. "It is recommended that domestic government departments speed up the research and formulation of Token regulatory policies to provide security for the 'Token economy' and digital assets."
Speaking of "Token Economy", Xu Xiaoyu, managing partner of Amino Capital from Silicon Valley, said that as the WEB3.0 era is approaching, "Token Economics" is emerging. Governments, universities and research institutions can conduct in-depth research on this economics to provide academic support for the prosperity of the next generation of the Internet and the construction of an innovative regulatory system.
Li Chao, deputy director of the Blockchain Research Institute of the Shanghai Academy of Sciences, also said: "How to balance supervision and innovative applications of Web3.0 is the key to the healthy and rapid development of Web3.0."
Because of this, professional organizations and industry insiders are optimistic about the opportunities in the development of Web 3.0 in China and Shanghai.
In the preliminary research of the report, TreeGraph Company expected that mainland China would issue clear policies to support Web3.0. “Only with clear policy guidance will funds support Web3.0 start-ups, and corporate compliance costs will be greatly reduced.”
How can Shanghai develop Web3.0?
The report believes that Shanghai has carried out beneficial explorations in the development of Web3.0 in a systematic, institutionalized, market-oriented and legalized manner. Under the guidance of supporting policies and plans such as the "14th Five-Year Plan for the Development of Shanghai's Digital Economy" and the "Shanghai Blockchain Key Technology Research Special Action Plan (2023-2025)", Web3.0-related industries represented by blockchain technology have continued to progress, promoting the rapid development of the digital economy, and assisting the construction of Shanghai International Science and Technology Innovation Center, achieving remarkable results.
Based on this, the report believes that in the Web3.0 era, Shanghai can make a difference in the following six aspects: First, give full play to the advantages of Shanghai's digital economy and provide a solid foundation for the construction of the Web3.0 ecosystem. Second, introduce special support policies around the Web3.0 field and carry out the top-level design and system construction of Web3.0. Third, increase financial support for the development of Web3.0. Fourth, actively promote the construction of the standard system in the Web3.0 field. Fifth, create a highland for innovation in the Web3.0 industry ecosystem. Sixth, innovate the construction of the Web3.0 regulatory system.
In short, Shanghai can utilize its advanced technologies and rich experience in financial technology, artificial intelligence, cloud computing, etc., combine the characteristics of the industrial structure, take industrial digitalization as the guide, upgrade traditional productivity to new quality productivity, and promote the implementation of Web3.0 industry with a good digital economy foundation.
