Web3 Harbour and PwC Hong Kong released a document titled “Hong Kong Web3 Blueprint” as part of an initiative to launch five action groups in August on stablecoin use and other methods of DeFi, accelerating the adoption of digital finance innovations in the Asian region. The business district of Hong Kong has seen a recent surge in momentum regarding blockchain innovations. The blueprint wishes to capitalise on this momentum and push the sector to further develop DeFi industries. The document highlights the strengths of DeFi in the business sector, including key characteristics of cryptocurrencies such as transparency, decentralised user empowerment, and security. The document describes the Web3 industry as having “superpowers” that are enabled by five key elements including market infrastructure, talent, regulation, ‘funding & economic contribution’, and standards. The document asks the sector to focus their skills on open finance, capital markets, and carbon markets.
The Hong Kong Web3 Blueprint aims to unite the Web3 industry to utilise their unique skills and business connections to support the government’s key objectives. Such a move could unify an emerging sector to support a finite amount of key strategic goals to further the development of broader socioeconomic targets. Governments across the globe often have key objectives that receive extra funding and tax incentives to encourage the private sector to use their business powers for positive outcomes. The blueprint outlines the particular “superpowers” that the Web3 sector possesses, to use for the greater good, including composability, decentralisation, automation, privacy, and user ownership. The blueprint then lists strategic use cases which the sector can hone their skills on, including trade finance, open finance, carbon markets, digital wealth management, and tokenized capital markets. The blueprint argues that these use cases can be improved upon by utilising talent acquisition, modern market infrastructure, and investment facilitation. The document ends with a mention of the Action 2030 plan which invites various stakeholders to participate in reshaping the Web3 industry in Hong Kong.
Web3 Harbour published the blueprint to encourage the private sector to take an active role in developing the Web3 sector with a ‘big picture approach’, and to take an active role in building digital infrastructure without direct involvement by the government. The Hong Kong business sector has a reputation for taking the initiative without waiting for the government to take the lead with public projects. For example, in 2023 Hong Kong hosted the Web3 Festival which united 300 industry leaders and demonstrated the ability of the local business sector to autonomously come together to solve big problems. Hong Kong regulators have approved of Bitcoin and Ethereum spot ETFs, enabling the finance sector to embrace the blockchain industry with the tools available to them. The Chinese model of private-public collaboration involves allowing the private sector to autonomously make serious decisions about the industry without the constant micromanaging of the public sector. This model has proved to be incredibly successful in other infrastructure projects and could prove to be a game changer for the Web3 market.
Gary Liu, chairman of Web3 Harbour, specifically avoided a focus on individual crypto projects such as Ethereum or Bitcoin to emphasise the fact that blockchain technology is a foundational technology that doesn’t just involve the investment community, but a whole range of industries. Liu, however, acknowledges the practical value of crypto tokens in giving consumers a hands-on approach to learning about blockchain finance. The Hong Kong government has been criticised for passing crypto exchange regulations at a slow pace. Liu is optimistic that the Securities and Futures Commission (SFC) will create regulations for stablecoins so that the industry can create new innovations regarding transactions and cost-effective cross-border remittances. Liu’s blueprint outlines plans for the government to embrace internship programs and education initiatives so that the Web3 industry can thrive. The blueprint also outlines plans to engage in regulatory passporting so that qualified professionals can streamline their work process from overseas countries, removing any obstacles that may thwart the industry from progressing. Liu is convinced that a forthright attitude is necessary for private industries to succeed in this sector. Liu wants to see a proactive approach by Web3 businesses so that there can exist unity between the public and private sectors, instilling a sense of teamwork on a grand scale. This is the essence of the blueprint that Liu has produced for businesses to read.
Hong Kong has recently passed stablecoin legislation which will hopefully come into effect in August. This coincides with the US passing the Genius Act which creates rules and protections for stablecoin users. The use of stablecoins is believed to be a vital component of the blockchain ecosystem, providing stable transactions that can be utilised for financial applications. Stablecoins are digital tokens pegged to real world assets, such as the US dollar. PwC Hong Kong has noticed that the US has promoted stablecoins like USDT as tools to spread USD dominance across the globe. PwC Hong Kong has taken a different approach, viewing crypto as a multifaceted phenomena that can include different types of tokens without having one token to dominate them all.
