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Author: Qiu Dagen, Member of the Hong Kong Legislative Council, letter
Original title: Do we seriously engage in financial innovation?
The Hong Kong Securities Regulatory Commission’s new licensing system set up for the Virtual Assets Trading Platform (VATP) has taken effect on June 1, 2023.The transition arrangement of the new system allows operators to apply for licenses before February 29 this year, and from June 1 to comply with new regulatory requirements, continue to provide virtual asset services in Hong Kong until the authorities make final decisions on their license applications.
However, near the end of the transition period (May 31), more and more operators have decided to abandon the Hong Kong market.At the time of writing, 11 applications have been withdrawn or returned.When the Securities Regulatory Commission launched a licensing condition, it has not attracted large exchanges such as Coinbase to come to Hong Kong for application.Since February, several internationally renowned exchanges, such as Gate and Huobi, have retired.In May, the situation was even worse. A total of 6 operators announced their withdrawal, including the top three OKXs in the global transaction volume.Of the 18 applicants, most of the size are small.Some lack of industry experience, others are traditional financial institutions trying to get involved in the VATP business, but they have not cultivated in the field of Web3.
OKX’s exit has attracted the industry’s discussions, questioning whether Hong Kong has a real determination to develop and embrace Web3.The author’s WeChat circle has a large number of related comments, such as some titles “Hong Kong Web3 ended at the beginning”, “The arrogance of Hong Kong people, hurting OKX’s Heart” and so on.When they accused the authorities of implementing a new system, officials were afraid of the first, and from the conservative avoidance of risk, from the thinking of traditional finance, weakened the competitiveness and flexibility of licenses.Even though some operators have invested a lot of resources and early costs, they still decide to return their applications in the final stage.
Many people in the industry are worried that the new card system will evolve into a “gourmet car incident”. Even like the government promoted the development of virtual banks at that time, the thunder was loud and the rain was small.They are worried that the authorities have repeated the same mistakes, and even if the operator gets a license, it is difficult to develop a profit model.
The author comprehensive industry opinion, believes that the new card system shows several places worthwhile.First of all, several policies and measures for the development of the virtual asset market in Hong Kong (such as VATP, stable currency issuance, and virtual asset -off transactions, etc.) were designed by different departments, and the lack of overall strategic considerations of industrial development.Relevant policies enter the consultation stage or put on legislative procedures at different periods, so that the entire web3 layout is completed in sections, which takes too long to keep up with the rapid pace of scientific and technological evolution.
Second, the CSRC requires operators to meet the standards in custody assets, avoid conflicts of interest, network security, accounting and audit, risk management, cracking money laundering and fundraising of terrorists.The situation appears to be too harsh when we are implemented when web3 finance.Some applicants told the author that the authorities lack the forward -looking vision of the development of next -generation fintech, and to promote Web3 “financial innovation” with traditional financial thinking, it is even less flexible.
Third, many people in the industry believe that the government and regulatory agencies lack innovative DNA.At present, the authorities require the management of licensed operators to have many years of experience in virtual asset business.On the other hand, the board of directors and management of officials and regulators lacks persons with practical experience in Web3 business. The two parties are different in terms of technical background, market experience and innovation spirit, and it is difficult to communicate.
The exit storm of the release system has caused people in the market to shake the confidence of Hong Kong to promote the development of Web3.In order to restore market confidence, the author hopes that the CSRC will make a decision on the application of licenses as soon as possible, so that investors have long -term confidence in the virtual asset trading platform.Secondly, the products provided by the trading platform must break through, which can balance and maintain the legal system, protect investors, and the needs of financial innovation.When the authorities approve new products in the future, they must show new thinking and determination to encourage Web3 finance.
In the final analysis, innovation is a kind of thought and a action.If you preach the innovation, you are impassioned, you are afraid of losing when you are in action, and you are afraid of walking wrong. How can you innovate?The essence of innovation is to try and make failure.The most important thing is how to review errors and accumulated experience from failure, rather than retreating from the beginning to the “security line”, and delusional “innovation” that delusions to promote completely zero risks!
Original link:
https://www1.hkej.com/dailynews/commentary/article/3782025/%E6%88%91%E5%8Press%90%9E%E9%87%91%E8%8D%E5%89%B5%E6%B0%E5%97%8E%3F
