Legislative Council member Dennis Kwok: Faced with the rise of Web 3.0, the Hong Kong government has shown an unprecedented speed of decision-making

Article author: Echo, MetaEra Article Source: MetaEra Recently, MetaEra Hong Kong Zone was launched, and the 'Hong Kong Encryption New Policy Two-Year Anniversary Celebration' series of events was launched. One of the important parts is the 'High-end Dialogue: Hong Kong Web 3.0 Influential Leaders'. The person interviewed in this issue is Hong Kong Legislative Council member Qiu Dagen. Character Introduction Qiu Dagen, a member of the Hong Kong Legislative Council, president of the Hong Kong Information Technology Federation, and an investor in Hong Kong's technology companies. Councilor Qiu has a strong background and rich experience in the fields of technology and finance, and is committed to promoting the development of Web 3.0 and financial technology. He represents the technology innovation sector in the Legislative Council of the Hong Kong Special Administrative Region, contributing to the development of this field.

Essential Viewpoints The government has responded to Web 3.0 at a fairly fast pace, which is unprecedented in history. The challenge we face is how to narrow the gap between government legislative speed and market expectations. · First, it is hoped that the government will expedite the processing of the remaining license applications, so that virtual asset trading platforms can obtain legal operation qualifications as soon as possible. Second, explore expanding the range of products that can be traded on the trading platform. These are all important matters that need to be followed up and promoted urgently. The government's direction is to develop more use cases for stablecoins through different scenarios. We look forward to intelligent individuals submitting applications and hope that the industry can come up with different ideas. · The legislation on virtual asset custody services is expected to be submitted to the Legislative Council for discussion and approval next year, which is a crucial step for the development of Web 3.0 in Hong Kong. Full Interview MetaEra: On the occasion of the two-year anniversary of Hong Kong's Web 3.0 new policy, what aspects of progress have left a deep impression on you? Qiu Dagen: My impression is that the government has responded to this emerging field at a relatively fast pace, which is unprecedented in history. However, there may still be some gap compared to the expectations of market practitioners. These practitioners, especially innovators in the technology field, are accustomed to freely exploring and promoting the development of new products and new directions, and are not used to being overly regulated. This has been the case since the emergence and development of blockchain. In terms of legislation, the government has been quite rapid in the past two years, including the promotion of exchanges, stablecoins, virtual asset over-the-counter trading (VAOTC), and custody services. Looking back at the history of the Hong Kong government, the current legislative process is actually very efficient. However, in order to achieve good interaction between the government and the market, both sides need to move towards each other. Market participants may not have fully considered the complexity and experience of government legislation, which is understandable. In the field of Web 3.0, Hong Kong needs to draw more on financial regulatory approaches and legal regulations to enhance industry trust. Legislation may be a completely new area for many industry practitioners, and they need time to adapt to this objectively slow pace. The challenge we face is how to narrow the gap between the speed of government legislation and market expectations. I have also been working hard to promote communication and understanding between the two sides. For example, I will tell the government that the Web 3.0 industry needs more inclusiveness and a faster legislative process; at the same time, I will also tell industry practitioners that Hong Kong's legislative process is relatively faster. In any mature economy or society, the normal legislative process takes quite a long time. In order to balance this gap, we are also trying to gradually close the distance between the government and the market through pilot projects and regulatory sandboxes. MetaEra: You mainly follow the development of the technology field. As a member of the Legislative Council of the Hong Kong Special Administrative Region, how did you promote the Hong Kong government's progress towards Web 3.0 new policies? Can you share some memorable experiences with us? Qiu Dagen: Regarding unforgettable experiences, what I want to emphasize is the recognition of the scale of the future technology market and the formation of consensus among various government departments. To achieve consensus, first, the market needs the government to recognize and welcome the development of the Web 3.0 industry from an administrative and declarative standpoint, and to acknowledge that the Web 3.0 industry is the future development direction with long-term potential and a huge market scale. Hong Kong also has the corresponding conditions and capabilities to promote the development of this industry. The formation of this consensus is not easy, but it was relatively smooth in the promotion process. This benefited from early discussions with the financial secretary. About two years ago, when we were discussing this industry, the secretary quickly realized the development prospects of the Web 3.0 industry and promptly expressed support, also pushing for the implementation of relevant policies from the top down. This also accelerated the issuance of the government declaration, which clearly articulated the government's recognition of the market potential of the Web 3.0 industry. This process was actually very short. I am deeply impressed by this personally. MetaEra: What are the changes in the regulatory framework for virtual asset trading platforms after the implementation of the new policies in Hong Kong? What challenges and opportunities do these changes bring to platform operations? Qiu Dagen: The main thing is still reflected in the development of the virtual asset trading platform licensing system in Hong Kong in the past two years. Since the implementation of the licensing system, we have witnessed several trading platforms obtaining formal licenses. I also hope that the SFC will handle the remaining applications on the current application list as soon as possible, so that more trading platforms can operate legally in Hong Kong. After more platforms comply, the next step is to further enrich the variety of products provided by the trading platforms. Since June last year, licensed trading platforms in Hong Kong have expanded the products available for trading from BTC and Ethercoin to more virtual currencies, and also launched BTC and Ethercoin ETF products at the beginning of this year. In order to attract more investors, we need to ensure that the products provided by the exchange are more diverse. Therefore, the next step of development includes two key points: First, I hope the government will expedite the processing of the remaining license applications so that the trading platform can obtain legal operation qualifications as soon as possible. Second, explore expanding the range of products that can be traded on the trading platform. Not only do we hope to exchange Virtual Money on the exchange, but we also hope to see more tokenized products, including the long-discussed Utility Tokens and Real World Asset (RWA) tokenization. These are important issues that we urgently need to follow up on and promote. MetaEra: What role do you think Hong Kong plays in international cooperation in the field of Web 3.0? Qiu Dagen: Web 3.0 itself is an international market. Web 3.0 products launched by the industry in Hong Kong should not be limited to the local market, as the local market is limited in scale and cannot support the sustainable development of the business. We must consider how to push Hong Kong's products to the international market to meet the needs of the global market. Therefore, the licensing mechanism of the trading platform just mentioned, how to promote more innovative digital asset products in Hong Kong's trading, and how to use Hong Kong to buy and sell these investment products to people elsewhere are the directions we will follow next. What positive impact does the stablecoin sandbox launched by the Hong Kong Monetary Authority have on the innovation in the Web 3.0 field? How do you evaluate the application and potential of the sandbox mechanism in regulatory practice? Qiu Dagen: Stable Coin is very important, and everyone knows that it has developed rapidly in recent years. The issuance of the two major Stable Coins has exceeded 100 billion US dollars, with huge daily trading volume. It is widely used, especially in the field of international education and trade. This is actually very suitable for Hong Kong to manage and promote. Because Hong Kong has natural advantages in international trade and investment payment, the use of Stable Coin can save time, reduce costs, and improve transparency. Therefore, Hong Kong is fully capable of developing Stable Coin as an important product. I feel that Stable Coin is still in the early stage of development, and its development space is huge. It is crucial as a bridge between legal currency coin and digital asset. The development of Stable Coin will help promote the rise of other digital assets in Hong Kong, because if Stable Coin does not develop well, it will be difficult for other digital assets to develop. It is a key interface. In the process of promoting Stable Coin, Hong Kong needs to achieve a balance in several aspects. Firstly, security is the most important, as there have been some issues in the history of Stable Coin, such as Algorithm issues or the stability of underlying assets. Hong Kong has the ability to provide a secure Stable Coin environment. In addition to security, usability and innovation are also crucial, which requires the industry to consider how to issue and use Stable Coin in Hong Kong. The government's guidance is to develop more applications for Stable Coin through different scenarios. We look forward to intelligent individuals submitting applications and hope that the industry can propose different ideas to better leverage the potential of Stable Coin in future finance through Hong Kong's licensing mechanism. We believe that the industry's innovative thinking will open up new paths for the development of Stable Coin and make it stronger through Hong Kong. This is not only the government's responsibility, but also relies on the industry's thinking and actions. MetaEra: The Hong Kong government plans to introduce a regulatory framework for virtual asset custodians. How do you think this will enhance Hong Kong's competitiveness in providing virtual asset custodial services? Qiu Dagen: I am pleased to see the development of custody. Initially, the government did not fully consider the custody mechanism when promoting Web 3.0. With the emergence of some issues, such as the FTX incident, society has realized the need for better isolation and protection of customer assets. Hong Kong must establish a legal framework for virtual asset custody services. I have personally participated in this process. Over the past year, I have organized multiple discussions on custody and promoted custody issues with various government departments. Therefore, I am very excited to see the idea of legislation on virtual asset custody services proposed by the Chief Executive in the Policy Address. This is significant to me because after more than a year of effort, progress has finally been made, and it is expected to have the opportunity to submit it to the Legislative Council for discussion and passage next year, which is a crucial step for the development of Web 3.0 in Hong Kong. MetaEra: The Hong Kong government provides a range of funding support and incentive measures for Web 3.0 startups. Can you please elaborate on these measures and how they help startups land and develop in Hong Kong? Qiu Dagen: When I first saw the potential of startups in the Web 3.0 field, the government entrusted the relevant business to Cyberport and allocated HK$50 million to promote the landing and development of Web 3.0 startups in Hong Kong. Later, due to the rapid rise in demand in this area, Cyberport has attracted hundreds of Web 3.0 companies in a short period of time. Given the huge market demand, I believe that this HK$50 million may be insufficient to meet the demand, and I will continue to urge the government to provide more support to Web 3.0 startups. Technology startups are a key force driving innovative development, bringing new ideas, inventions, and innovation. Especially when technology is developing, it relies on these startups to provide vitality. Hong Kong has experts in the financial field, but also needs experts in the technology field. Only by combining the two can new ideas and new impetus be generated. Therefore, I believe there is still greater room for improvement in the policy support for Web 3.0 startups. The government mentioned in the policy address that it will provide funding for startup accelerators, with each accelerator eligible for up to HK$30 million in funding. I hope that at least one or two of these accelerators will focus on Web 3.0 technology to better promote the development of Web 3.0 startups in Hong Kong. MetaEra: The development of Web 3.0 technology poses challenges and opportunities for the TradFi industry. How do you evaluate the progress and strategies adopted by traditional Financial Institutions in Hong Kong in adapting to these changes? In my opinion, the opportunities in the Web 3.0 field are far greater than the challenges. After a period of development, many traditional Financial Institutions have also seen the opportunities here. It is widely recognized that: first, this is an opportunity; second, regardless of personal opinions, Hong Kong must move towards digitization and the development of Blockchain technology. Financial Institutions are also actively exploring how to play a role in Web 3.0. Although the current economic situation has slowed down some steps or become more cautious in terms of costs, large Financial Institutions in Hong Kong are undoubtedly studying how to participate in and promote the development of Web 3.0. I hope that in the future, there will be more motivation to encourage them to participate more actively. For example, the Project Ensemble launched by the HKMA is a good driving force, which can promote collaboration between traditional Financial Institutions and Web 3.0 teams to jointly develop new tokenization financial products. MetaEra: What specific advice or guidance do you have for companies and individuals looking to enter the Web 3.0 space? Qiu Dagen: For individuals, many people are very interested in this industry. For those who are already involved, I think they need to have a deeper understanding of technology and lay a solid foundation, which is essential. There are many financial professionals in Hong Kong participating in the development of Web 3.0, but they often start from a financial perspective. I hope that financial professionals can strengthen their understanding of the technological foundation, so that they can better grasp the development context of Web 3.0. At the same time, people in the technology field should also have a deeper understanding of finance, because Web 3.0 is essentially a combination of financial technology, and expertise is necessary for us. Society should not only pursue fast-profit methods, but should ensure that both technology and financial foundations are solid, so as to create excellent products. Hong Kong provides a lot of support in terms of technology and financial knowledge, including professional talents and courses, and the government also provides relevant subsidies. Everyone should lay a solid foundation first, and then consider whether to start a business or join a corporate team. For enterprises, it is also very important to understand the advantages of Hong Kong and its benefits to the company's development. I often say that the location of entrepreneurship is very important, and its help to entrepreneurship cannot be ignored. There are good prospects for the development of financial technology, Web 3.0, and digital assets in Hong Kong, but the situation of each company is different, and it is necessary to consider how to make use of the advantages of Hong Kong. I also noticed that some teams have a limited understanding of Hong Kong's regulatory and licensing system. I suggest that these teams and talents come to Hong Kong for investigation. I am always welcome to them, and I am willing to share the existing policies and regulations in Hong Kong with them. Everyone must consider how to use the advantages of Hong Kong to promote their own growth.