Last week, the Web3 Carnival in Hong Kong took place. Although I didn't go there, I was looking forward to it and paid close attention to the new ideas and insights. I have learned a lot, but one thing I am particularly dissatisfied with is that no one has mentioned one of the most important issues in public discussions: What is the decision-making logic behind the Hong Kong Web3 New Deal?
So I raised this issue on Twitter, and there was an unprecedented situation, that is, although I received a lot of replies from tweeters on Twitter, a lot of communication happened through private messages and chat tools, and there were still many people Ask me, what opinions have been expressed by other people who chat with you privately? These exchanges made me feel more and more that this issue is worth turning to the table for discussion.
However, everyone has concerns, and I also have them, so I only publish an abridged version on the official account, which only contains opinions suitable for publication in China. If you are interested in reading the full text, please go to my Medium column.
The first thing to consider is the context of the times.
The current general situation of the world is entering into a new cold war stage, with a duration of 10-30 years, most likely around 20 years.
This is a cold war with low intensity and gray scale. Both sides of this new cold war have no illusions about returning to cooperation, but they are both afraid of the consequences of fierce confrontation, so they hope to control the intensity of the confrontation. Therefore, their attitudes are not firm, and there will be many swings and ambiguities over time. There is a lot of room for blending.
The main battlefields of this new Cold War are technological innovation and the real economy. China hopes to expand upwards by virtue of its advantages in the real economy, obtain advantages in technological innovation, and realize the independence of the entire supply chain from innovation to manufacturing, while the United States hopes to use its advantages in technological innovation to recover key links in the manufacturing industry downwards, so as to promote the return of the real economy to its homeland and re-establish itself globally. Configure the supply chain.
The United States and China have their own risk points. Therefore, in a cold war in which neither side is firm enough, the intensity is limited, and each has its own weaknesses and risk points, the two sides are bound to reserve relatively large communication channels, coordination mechanisms, room for maneuver, and room for collusion. The greater this space, the greater the opportunities for surrounding economies, especially those at the border of competition.
The second is about the current technological revolution.
A new round of technological revolution is taking place in the United States. The core technologies of this round of scientific and technological revolution include: strong artificial intelligence, unmanned vehicles, robots, new human-computer interaction technology (brain-computer interface, etc.), quantum computing, new generation aerospace technology, satellite Internet, biological and genetic engineering , new energy and new materials. Blockchain is an institutional technology that will also play an important role in this round of technological revolution. However, due to its high degree of openness and low barriers to technology diffusion, blockchain technology is not the focus of competition.
A technological revolution may transform into a new industrial revolution. The current technological revolution in the United States is only in its infancy. It remains to be seen whether the simultaneous technological breakthroughs in multiple fields can interact chemically and stimulate a new industrial revolution. But if the new industrial revolution happened in the United States, most of the economic and social problems currently plaguing the United States would be wiped away.
China will do its best to track the technological revolution. China does not have the option of losing the technological competition, because if it loses the technological competition, the industrial chain advantages it has acquired before will disappear. Therefore, China must do everything possible to not lag behind in this technological revolution. The United States also has a clear understanding of this, so it has implemented a blockade of cutting-edge technologies against China, trying to ensure that key technological fields will not flow into China or be overtaken by China. Conversely, China will inevitably do its best to break through the blockade and achieve breakthroughs in key technologies, at least not to be left behind in a generational fashion.
Then there are some views on monetary and financial aspects.
With the current US dollar raising interest rates and returning to the market, its global status is indeed declining. The BRICS countries proposed to de-dollarization, the direct reason is that the Federal Reserve raised interest rates.
China's acceleration of RMB internationalization at this point in time can indeed achieve twice the result with half the effort.
Another consequence of accelerating the internationalization of the renminbi is that China's dollar reserves have declined, putting pressure on the Hong Kong dollar.
After the preparation of the above background, we can discuss the topic.
The blockchain has four functions: the first is to serve as the infrastructure for digital currency and digital assets. The second is to serve as the infrastructure of Web3 to create a next-generation Internet with shared ownership. The third is to serve as a tool for humans to control and restrain artificial intelligence in the historical stage of peaceful coexistence between humans and artificial intelligence. The fourth is the infrastructure for the allocation of important resources such as governance rights, energy, computing power, and data in a super-large-scale distributed network composed of humans, artificial intelligence, and robots. Therefore, the blockchain is also a key technology in the next generation of technological revolution, and it is a battleground for military strategists.
However, the competition in the blockchain is not mainly competition at the level of equipment, technology, technology, algorithms, etc., but how to use the tool of blockchain to create new structures and new mechanisms. It is a competition for system innovation, not for innovation of tools dispute.
It is difficult for the digital asset market to develop in a big country, but it will find a hotbed at the junction of competition between big countries. As far as digital currency and digital assets are concerned, it is undeniable that after more than ten years of development, a free gray financial market has been formed on the blockchain. A chaotic lawless place. In the historical period of international competition, the big countries in the competition will not allow such a gray financial market to deconstruct and disrupt the financial order in their own countries, so they will tend to strictly control internally. But at the same time, there is a gray virtual economic zone with a limited scale and controllable impact outside the borders of the country, especially in the frontier areas of competition, which is conducive to some exchanges, coordination and blending between the two camps, so that each can get what it needs.
Therefore, there will be an active blockchain digital economy industry in the border area of Sino-US competition, so the Web3 Tale of Two Cities in Singapore and Hong Kong will continue to be staged. What both have in common is that as a region with developed rule of law, neither will tolerate the development of a fraudulent industry locally, so Web3 will be regulated. The era of spamming ICOs that some people expect will not come again. But in terms of "what can be done", the thinking of the two cities should be very different.
Hong Kong Web3 is transaction-oriented. China hopes that Hong Kong will take on the role of trade, finance, currency and technology exchange with the outside world, and the United States will tolerate or even encourage Hong Kong to take on this role to a certain extent. Therefore, Hong Kong's Web3 market will be more transaction-oriented. For the gray digital financial market The tolerance for the existence and development of ICO will be higher, but ICO and other financing behaviors will still be very cautious and even strict.
Hong Kong Web3 is still in the pilot period, and there is a possibility of repetition. If it fails to help Hong Kong achieve its expected goals after a period of time, or even some risks and destructive financial events occur due to poor supervision, it may also reverse the views of the decision-makers and lead to repeated policies. For this reason, the Hong Kong government will not relax its supervision, and strive to draw a red line and keep the bottom line.
Singapore's Web3 strategy is more robust. In contrast, since ASEAN countries are still a key point in the process of restructuring the US supply chain, Singapore, as a sovereign country within ASEAN, has not been weakened as a global logistics center, but has been strengthened. In the field of traditional finance, its status as a regional financial center has been enhanced in the past two years. Therefore, under the winning mentality, Singapore hopes to make further progress in the overall competition between China and the United States, and hopes to become a dual center for global logistics and digital finance. Therefore, there will be a stronger orientation to the real economy and a stronger orientation to the combination of TradFi. more robust.
Singapore has a lower tolerance for gray digital finance. The flip side of the winning mentality is the fear of accidents. Due to the collapse of Luna, 3AC and FTX last year, Singapore has realized the potential high risk and destructiveness of irregular crypto financial institutions. For this reason, it hopes to guide the development of Web3 to be formalized, constructive, and tolerant of the gray digital financial market The degree will be lower, which is reflected in the setting of higher entry thresholds for related businesses and stronger de facto supervision.
It is not easy for the two places to make world-class 2C projects such as Web3 social networking and games. The population of Hong Kong and Singapore is limited, and the Web3 industry relies on the status of an international financial center for development, so it will highlight financial characteristics. Web3 social networking and game projects that win with a large number of users are not the comparative advantages of the two places.
Both places will actively support the development of RWA. Recently, institutions such as BIS and Citibank have repeatedly emphasized the potential of RWA tokenization. It is believed that this direction will be highly valued by Hong Kong and Singapore. Backed by the mainland, Hong Kong has huge RWA resources and can act as a good financial bridge. Singapore has the advantage of guarding the world's most important supply chain, and can expand trade finance RWA based on transnational supply chains.