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Unleashing the Potential of Web3 and Virtual Assets: What We Learned from the 2023 Hong Kong Web3 Carnival

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According to reports, at the 2023 Hong Kong Web3 Carnival, Keith Choy, interim head of the Intermediary Department of the Hong Kong Securities and Futures Commission, stated in his

Unleashing the Potential of Web3 and Virtual Assets: What We Learned from the 2023 Hong Kong Web3 Carnival

According to reports, at the 2023 Hong Kong Web3 Carnival, Keith Choy, interim head of the Intermediary Department of the Hong Kong Securities and Futures Commission, stated in his keynote speech that he would unleash the potential of Web3 and virtual assets. DeFi has concerns about financial stability, data, and investor protection, mainly due to concerns about leverage and borrowing. Starting from June this year, whether the virtual asset trading platform (VATP) provides securities tokens or non securities tokens, we will have to issue licenses to protect investors. According to our existing system for VATP, we still need to conduct relevant consultations, make some adjustments and supplements, and suggest setting additional admission rules for retail investors. We call on all relevant parties in the market to actively participate in discussions and engage in constructive dialogue with us.

Interim Director of the Intermediary Department of the Hong Kong Securities Regulatory Commission: Will unleash the potential of Web3 and virtual assets

At the 2023 Hong Kong Web3 Carnival, Keith Choy, interim head of the Intermediary Department of the Hong Kong Securities and Futures Commission, gave a keynote speech about unleashing the potential of Web3 and virtual assets. In his speech, he acknowledged that while there are concerns about the financial stability, data, and investor protection of DeFi, there is great potential to be unlocked through the use of Web3 technologies. Here are some of the key takeaways from his speech.

The Concerns About DeFi

DeFi, or decentralized finance, has been a hot topic in the blockchain and cryptocurrency world for some time now. Essentially, DeFi applications allow people to lend, borrow, and trade cryptocurrencies without the need for traditional financial intermediaries like banks. While this can be seen as a positive development, there are also concerns about the potential risks associated with DeFi.
One of the biggest concerns is financial stability. Without traditional intermediaries to oversee and regulate the system, there is a risk that DeFi could become unstable and collapse, leaving investors high and dry. Additionally, there are concerns about data privacy and how user data is being used by DeFi platforms.

Protecting Investors with Licenses

To address these concerns, Choy announced that the Hong Kong Securities and Futures Commission will begin issuing licenses to virtual asset trading platforms (VATPs) starting in June of this year. These licenses will be required for any platform that provides securities tokens or non-securities tokens.
The purpose of these licenses is to protect investors and ensure that virtual asset trading platforms are adhering to the same regulatory standards that traditional financial intermediaries are held to. It is hoped that this will increase the stability of the DeFi ecosystem and provide investors with greater confidence in the system.

Admitting Retail Investors

Choy also mentioned that there will be additional admission rules for retail investors who wish to participate in virtual asset trading. While it is important to protect investors, it is also important to ensure that the system is accessible to a broad range of people, including retail investors.
To achieve this, there will be discussions and consultations held to determine what these admission rules should be. It is hoped that by engaging in constructive dialogue with all relevant parties in the market, the Hong Kong Securities and Futures Commission can find a way to balance protecting investors with allowing full participation in the DeFi ecosystem.

Conclusion

The 2023 Hong Kong Web3 Carnival was a valuable opportunity for the blockchain and cryptocurrency community to learn more about the potential of Web3 and virtual assets. While there are concerns about the stability, data privacy, and investor protection of DeFi, there is also great potential for this technology to transform the financial industry.
Through the issuance of licenses and the setting of admission rules, the Hong Kong Securities and Futures Commission is taking steps to address these concerns and ensure that the DeFi ecosystem is as safe and stable as possible. By engaging in constructive dialogue, we can find a way to make Web3 and virtual assets work for everyone.

FAQs

1. What is Web3?
Web3 refers to the third generation of the Internet, which is focused on decentralization and blockchain technology. It is often associated with decentralized applications, or dapps.
2. What are securities tokens?
Securities tokens are digital assets that represent ownership in a real-world asset, like a share in a company or a piece of real estate. They are subject to the same regulatory standards as traditional securities.
3. What are non-securities tokens?
Non-securities tokens are digital assets that are not subject to the same regulatory standards as traditional securities. They may represent things like loyalty points or access to a product or service.

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