Author: Infinite Dialogue of Quanguo
"Legislation promoting the tokenization of fiat currency is an unprecedented event in the history of world currency, which will inevitably trigger a series of complex economic and financial reactions that no one can fully foresee, not even the President and Congress of the United States."
"The evolution of human society cannot be separated from the changes in three elements: matter, energy, and information. Every industrial revolution is a synchronous revolution of these three; and financial revolutions often lead the way. The blockchain you see now is a new generation of financial system supporting the Fourth Industrial Revolution. Unlike before, this time China and the United States are jointly leading."
"Chinese entrepreneurs have not only opportunities but also unique advantages in this wave of stablecoin economy and RWA… Behind many of the world's leading projects lie the codes, algorithms, and infrastructure of Chinese engineers. The future stablecoin economy will not be a single structure but a multi-layered, multi-regional global network with spectrum and granularity. For Chinese entrepreneurs, this is a new 'digital going abroad.' With the enterprising spirit and sharpness of Chinese entrepreneurs, these markets will become our home ground."
"Web3 and AI are two sides of the same coin, and they will ultimately come together. AI and blockchain together form the infrastructure of a new generation of wealth distribution systems. We firmly believe that the deep integration of AI and blockchain will happen, and we are actively looking for entrepreneurial projects with practical implementation capabilities—not just creating a chain, issuing a coin, or slapping an AI label on it, but solving real problems and doing real engineering… I know many entrepreneurs are making similar attempts, and I welcome everyone to discuss together."
Xiao Feng, Chairman of HashKey Group, recently commented on the significant progress in stablecoin legislation across various regions globally and the market opportunities arising from it.
On May 19, the U.S. Senate passed the motion to vote on the "GENIUS Stablecoin Act" (also known as the "Genius Act"). It is understood that Trump has explicitly requested Congress to pass legislation related to dollar stablecoins by August 2025.
The Legislative Council of Hong Kong, China, passed the "Stablecoin Ordinance Draft" on May 21, which is expected to officially take effect on August 1. At that time, the Hong Kong Monetary Authority (hereinafter referred to as "HKMA") will begin accepting license applications.
This also means that Hong Kong has gained a certain first-mover advantage in the global stablecoin regulatory competition, being the first to implement a licensing system for fiat stablecoin issuers and to improve the regulatory framework for related virtual asset activities.
Figure 1. The Legislative Council of Hong Kong passed the "Stablecoin Ordinance Draft." Source: Hong Kong Monetary Authority
The acceleration of the regulatory system in Hong Kong is believed to be related to multiple internal and external factors. For example, according to the relevant information published by the Legislative Council of Hong Kong, "It is noted that stablecoins claim to maintain a relatively stable value with certain traditional financial assets and may develop into widely accepted payment mediums, thus integrating into the mainstream financial system. Among them, fiat stablecoins may pose more urgent risks compared to other types of stablecoins, hence the government authorities believe there is a need to establish a regulatory system for fiat stablecoin issuers, regulating them in a risk-based and flexible manner." (Source: "Accelerating the Construction of Hong Kong's Stablecoin Ecosystem," May 26, 2025, Jiao Jian, "Finance" magazine)
In the past year, the HKMA has seen several important milestones in the preparation for stablecoin legislation: In March 2024, it launched the "sandbox arrangement" for stablecoin issuers; in July 2024, the Hong Kong SAR government announced the first batch of participants in the stablecoin issuance "sandbox" program; and in December 2024, it announced the legislative initiative for the stablecoin bill.
Quanguo's perspective note: The "sandbox" is a model often used in Hong Kong for financial innovation. The so-called stablecoin issuer "sandbox" refers to allowing institutions with substantial intentions and reasonable plans to issue stablecoins in Hong Kong to test the issuance process, business model, investor protection, and related risk management systems in a limited scope and under controllable risks before the relevant legislation is enacted.
As early as April 2024, Xiao Feng, Chairman and CEO of HashKey Group, was invited to the "Infinite Dialogue of Quanguo" to discuss the underlying logic and long-term development path of blockchain and crypto assets in a closed-door sharing session.
Xiao Feng holds a Ph.D. in Economics from Nankai University and is a Chinese leader in the global blockchain field. He founded Bosera Funds in his early years, later delving into the fintech sector, joining Wanxiang Holdings, and over a decade ago, becoming an early investor in Ethereum founder Vitalik Buterin. This legendary experience spanning traditional finance and cutting-edge technology is quite rare. Based on this, Xiao Feng has an unparalleled deep understanding of blockchain technology and possesses an exceptional rhythm in coordinating with policies.
In 2018, Xiao Feng officially established HashKey Group, and today, HashKey Exchange has become one of the first licensed retail virtual asset exchanges in Hong Kong.
Figure 2. HashKey Group
Since the passage of the Hong Kong "Stablecoin Act," the heat, dimensions, and depth of discussions about stablecoins have been gradually increasing, and it is expected that by August 1, when the act is officially implemented, the heat will reach its peak. Many industry insiders believe that the passage of the Hong Kong stablecoin act marks a key point, and a new consensus is forming—the blockchain field is about to welcome a golden window period for entrepreneurial innovation, and for a while, its energy intensity may even surpass that of AI.
Xiao Feng mentioned, "Now when everyone discusses blockchain and stablecoin topics, there is too much macro discussion, but very little micro discussion. The primary driving force behind the development of stablecoins has always been technological innovation, which creates value for ordinary users and consumers."
He also emphasized, "The blockchain industry has already transitioned from the infrastructure stage to the second growth curve—the application stage; the new opportunity lies in who can build truly problem-solving applications on this distributed ledger system."
In this issue of "Infinite Dialogue of Quanguo," we have re-sorted the core viewpoints of Dr. Xiao Feng from his closed-door sharing session at Quanguo Fund in April 2024 and his recent public interviews, aiming to cover most of Xiao Feng's core views on blockchain. With Dr. Xiao Feng's consent, the original transcript is selected as follows in the first-person narrative:
If you have limited time, you can first browse the following core viewpoints in 3 minutes and then read more targeted content:
[1] Legislation promoting the tokenization of fiat currency is an unprecedented event in the history of world currency, which will inevitably trigger a series of complex economic and financial reactions that no one can fully foresee, not even the President and Congress of the United States.
[2] The United States openly acknowledges that one of the important purposes of promoting stablecoin legislation is to consolidate and enhance the status of the dollar, and from the Senate's voting, this is a bipartisan consensus; they also know they are making history. In this context, the legislative authorities of Hong Kong have demonstrated flexibility and high efficiency by passing the stablecoin ordinance in three readings, which is commendable.
[3] Now when we discuss blockchain and stablecoin topics, there is too much macro discussion, but very little micro discussion. Many of us have forgotten that the primary driving force behind the development of stablecoins has always been technological innovation, which creates value for ordinary users and consumers. The reason stablecoins have such a strong impact lies in the series of technological advantages granted by blockchain. I have been talking about these for ten years, but it is still not enough; it is necessary to reiterate at this moment.
[4] I heard that the New York Stock Exchange plans to launch 5×23 hour trading, and Nasdaq plans to launch 5×24 hour trading; I suspect they will use blockchain technology internally. Once implemented, investors worldwide can trade U.S. assets continuously using dollar stablecoins, which is self-evident in its significance for investors.
[5] Many people view blockchain as a formidable beast, one important reason being the lack of a deep understanding of the inherent advancement and inevitability of blockchain technology itself. When we make payments and transactions on the blockchain, it operates continuously around the clock. How can this be achieved? It is because transactions are settled one by one on a global ledger, allowing for uninterrupted clearing and settlement.
[6] The fundamental starting point for promoting stablecoins is to align with the trend of technological development and to promote the modernization of payment and financial infrastructure. All considerations are based on the basic fact that blockchain, as a new generation of financial infrastructure, has overwhelming technological advantages.
[7] The evolution of human society cannot be separated from the changes in three elements: matter, energy, and information. Every industrial revolution is a synchronous revolution of these three; and financial revolutions often lead the way. The blockchain you see now is a new generation of financial system supporting the Fourth Industrial Revolution. Unlike before, this time China and the United States are jointly leading.
[8] Hong Kong's transformation into a new virtual asset financial center has its unique historical genes and advantages… The past decade has been a critical window period for Hong Kong to build an international financial center 2.0—an international virtual asset trading center, upgrading the traditional financial capital of fiat currency to the capital of virtual assets.
[9] In the coming years, stablecoins will drive a massive explosion of blockchain and RWA (Real World Asset tokenization) applications. Stablecoins are becoming the bridge for the blockchain industry to cross the "chasm." In the coming years, stablecoins will drive a massive explosion of blockchain and RWA applications, and stablecoins and blockchain will become the most attractive track with the most successful stories in the coming years.
[10] Stablecoins will become the first blockchain product to be widely adopted by "pragmatists." Cross-border e-commerce, freelancers, platform settlements, global payments—everyone is starting to use them, making blockchain for the first time not just a narrative but an infrastructure integrated into the real economic system.
[11] Chinese entrepreneurs have not only opportunities but also unique advantages in this wave of stablecoin economy and RWA… Behind many of the world's leading projects lie the codes, algorithms, and infrastructure of Chinese engineers. The future stablecoin economy will not be a single structure but a multi-layered, multi-regional global network with spectrum and granularity. For Chinese entrepreneurs, this is a new "digital going abroad." With the enterprising spirit and sharpness of Chinese entrepreneurs, these markets will become our home ground.
[12] This wave is global; you must go out, fight in the storm, and seize positions where the rules are being formulated.
[13] The rules of the game in the industry have changed; the past path of getting rich by just issuing a coin is no longer viable. Now is an era of competing for real user value and application capability. For every product you create and every model you design, you must ask: Does it truly solve user problems? Does it create new efficiencies? Only projects that genuinely create value for users will be retained by this era.
[14] It is not only about learning technology and compliance but also about learning new ideas and new institutional frameworks. You cannot use Web2 thinking to do Web3 things, nor can you speculate in the stablecoin and RWA era with the mindset of issuing coins to cut leeks. Behind this is a whole new paradigm that requires continuous learning and breaking through oneself.
[15] Web3 and AI are two sides of the same coin, and they will ultimately come together. AI and blockchain together form the infrastructure of a new generation of wealth distribution systems. I have been looking for truly valuable AI+Crypto projects. It is not just about creating a chain, issuing a coin, or slapping an AI label on it; it is about solving real problems and doing real engineering.
The following is a collection of core viewpoints shared by Xiao Feng:
01
Now when we discuss blockchain and stablecoin topics, there is too much macro discussion, but very little micro discussion. Many of us have forgotten that the primary driving force behind the development of stablecoins has always been technological innovation, which creates value for ordinary users and consumers. The reason stablecoins have such a strong impact lies in the series of technological advantages granted by blockchain. I have been talking about these for ten years, but it is still not enough; it is necessary to reiterate at this moment.
On May 19, the U.S. Senate passed the motion to vote on the "GENIUS Stablecoin Act" (also known as the "Genius Act").
Not long ago, I communicated with the blockchain policy advisor to the U.S. President, who very straightforwardly told me that the national reserve of Bitcoin is secondary for the United States; the dollar stablecoin is the primary concern and is a core interest of the United States. From what I understand, the goal of President Trump's team is to ensure the passage of the GENIUS Act before Congress goes on recess in August, and it seems it may happen even sooner.
The U.S. President's team and Congress are quite frank about their motivations for stablecoin legislation. They openly state that the first goal is to modernize the U.S. payment and financial system, and the second is to consolidate and enhance the status of the dollar, creating trillions of dollars in demand for U.S. Treasury bonds over the next few years.
The United States openly acknowledges that one of the important purposes of promoting stablecoin legislation is to consolidate and enhance the status of the dollar, and from the Senate's voting, this is a bipartisan consensus; they also know they are making history.
In this context, the legislative authorities of Hong Kong have demonstrated flexibility and high efficiency by passing the stablecoin ordinance in three readings, which is commendable.
The previous U.S. government, especially experts like former SEC Chairman Gary Gensler, understood blockchain, but why has there been so much entanglement over the years? It is simply because they are reluctant to let go of the existing payment network, including SWIFT, as well as the financial governance, regulation, and anti-money laundering mechanisms built on this network.
However, the advancements in blockchain technology over the past few years, especially the financial sanctions against Russia following the Russia-Ukraine war, have shown that the technological advantages of blockchain are undeniable. Therefore, the entire financial infrastructure is moving towards blockchain, just as the transition from the steam engine to the electrification era cannot be stopped by any force.
However, I have a judgment that although Trump's team and Congress have a deep understanding of dollar stablecoins, they may not fully imagine the long-term impact of this matter. From this perspective, whether promoting the GENIUS Act will be as repetitive as his trade war policy remains to be seen.
Legislation promoting the tokenization of fiat currency is an unprecedented event in the history of world currency, which will inevitably trigger a series of complex economic and financial reactions that no one can fully foresee, not even the President and Congress of the United States.
According to the GENIUS Act, institutions outside the United States can also issue dollar stablecoins, but they must be based on dollar fiat assets, registered in the U.S., subject to the supervision of relevant U.S. agencies, comply with U.S. laws, and respond to commands from U.S. law enforcement authorities at any time. These requirements are very high, but they are under the condition of "legal circulation in the U.S. market."
If they do not enter the U.S. market and do not engage with Americans and U.S. entities, then even these conditions can be relaxed. As a result, there will be two systems in the future: onshore dollar stablecoins and offshore dollar stablecoins, similar to today's dollar and eurodollar systems. The onshore dollar will be relatively strict and consistent, while the offshore dollar ecosystem will be more complex, with dozens or even hundreds of digital currencies called "dollar stablecoins" circulating, mapping, exchanging, and interacting across dozens of public chains and hundreds of private chains, resulting in complex effects that no one has seen before and no one can foresee.
At a time when trade frictions are leading to "de-globalization," a trend of "dollarization" in the global digital economy is emerging. As AI advances rapidly, the "value internet" is suddenly accelerating, and the complex reactions of these economic and technological trends exceed everyone's predictive capabilities.
We are entering a period of ecological explosion in the digital economy, and we will soon see many new phenomena and business species in the digital economy.
At this stage, discussions on this issue are still insufficient. We must understand that blockchain stablecoins are meant to naturally attract and bind more real economic activities under a framework of higher efficiency, lower costs, and fewer steps. Their expansion is based on technological advantages, relying on efficiency, institutional design, technological advantages, and network effects. We acknowledge that it has disruptive innovation characteristics, but what attitude should we adopt towards it?
My attitude has been consistent and unchanged for ten years. In the face of a technology like blockchain, we should go with the flow and develop our stablecoin ecosystem in an open, compliant, and trustworthy manner, securing a place in the new generation of financial networks. Some talk about monetary sovereignty and financial sovereignty; I want to say that in the face of disruptive technological innovation, actively responding is the truly responsible attitude towards sovereignty.
Now when we discuss blockchain and stablecoin topics, there is too much macro discussion, starting with the monetary system, dollar hegemony, and financial wars, but very little micro discussion. Many of us have forgotten that the primary driving force behind the development of stablecoins has always been technological innovation, which creates value for ordinary users and consumers. The reason stablecoins have such a strong impact lies in the series of technological advantages granted by blockchain. I have been talking about these for ten years, but it is still not enough; it is necessary to reiterate at this moment, and it is essential to make everyone understand that blockchain technology has enormous superiority, and its fundamental technological advantages are reflected in four aspects: accounts, ledgers, accounting methods, and units of account.
We can judge whether a new technology has overwhelming advantages by a simple method: look at how many times efficiency has improved and how many times costs have decreased. A tenfold advantage means an upgrade; if it is a hundredfold or thousandfold advantage, then it is unstoppable.
Many people view blockchain as a formidable beast, one important reason being the lack of a deep understanding of the inherent advancement and inevitability of blockchain technology itself.
Let me give another example. In traditional trading systems, it is very difficult to achieve 24/7 uninterrupted operation. Now some leading stock trading systems are seeking to extend trading hours; some are already planning for 5x23, trading five days a week for 23 hours each day, but they still need to pause for one hour each day because the traditional clearing and settlement system requires a time point to pause, net, and settle.
But when we make payments and transactions on the blockchain, they operate continuously around the clock. Why can this be achieved? It is because, as mentioned earlier, transactions are settled one by one on a global ledger, allowing for uninterrupted clearing and settlement.
I heard that the New York Stock Exchange plans to launch 5x23 hour trading, and Nasdaq plans to launch 5x24 hour trading; I suspect they will use blockchain technology internally. Once implemented, investors worldwide can trade U.S. assets continuously using dollar stablecoins, which is self-evident in its significance for investors and U.S. companies.
So you see, these discussions at the macro strategic level ultimately still need to be built on technological innovation.
The basic technological facts point to a simpler conclusion—the fundamental starting point for promoting stablecoins is to align with the trend of technological development and to promote the modernization of payment and financial infrastructure. All considerations are based on the basic fact that blockchain, as a new generation of financial infrastructure, has overwhelming technological advantages.
Therefore, I am very excited about the early passage of the Hong Kong stablecoin bill; this is the correct response posture.
02
The evolution of human society cannot be separated from the changes in three elements: matter, energy, and information. Every industrial revolution is a synchronous revolution of these three; and financial revolutions often lead the way. The blockchain you see now is a new generation of financial system supporting the Fourth Industrial Revolution. Unlike before, this time China and the United States are jointly leading.
I also want to share the source of my "faith" in blockchain. I have recently been quoting a saying from Nobel laureate in economics John Hicks: "The industrial revolution had to wait for a financial revolution."
The evolution of human society cannot be separated from the changes in three elements: matter, energy, and information. Every industrial revolution is a synchronous revolution of these three; and financial revolutions often lead the way.
First Industrial Revolution: The steam engine, accompanied by the emergence of a banking lending system;
Second Industrial Revolution: Electrification, accompanied by the capital market and joint-stock company system;
Third Industrial Revolution: The internet revolution, with China inserting itself in the middle;
Fourth Industrial Revolution: AI + blockchain, this time China and the United States are jointly leading.
The blockchain you see now is a new generation of financial system supporting the Fourth Industrial Revolution.
As mentioned earlier, behind the industrial revolution, the financial revolution often leads the way. Next, let’s look at the evolution stages of the financial revolutions accompanying the four industrial revolutions:
First Industrial Revolution: Led by banks, credit and bonds are the main financing axes, with no capital markets;
Second Industrial Revolution: Led by the U.S. capital market, investment banks, Wall Street, Morgan Stanley, Goldman Sachs, etc., emerged to support the wave of electrification;
Third Industrial Revolution: The birth of venture capital (VC) in the 1960s, the rise of Silicon Valley;
Today, the Fourth Industrial Revolution, the financial revolution of the digital age, is based on distributed ledgers and encrypted capital. Denying this makes it difficult to keep pace with the forefront of the world in the digital age. Why? Because blockchain is a new accounting system, payment and settlement system, and global ledger system. The digital world, crossing space, time, organizations, and legal jurisdictions, requires a new registration, accounting, and settlement system, which traditional finance cannot meet.
In the 5,000 years of human society with written records, there have been three major changes in accounting methods. The changes in accounting methods are closely related to the economic activity patterns of human society:
[1] Single-entry bookkeeping
The earliest single-entry bookkeeping clay tablet was unearthed in Sumer, dating back to around 3500 BC. Single-entry bookkeeping only records income and expenses, which we in China refer to as "cash books." To understand profit and loss, regular inventory is required.
[2] Double-entry bookkeeping after the Renaissance (still in use today)
Later, with the emergence of cross-border maritime trade in the Mediterranean region, trade cycles and structures became more complex, involving borrowing, partnerships, taxes, etc. These combined demands called for a new accounting method—by 1300 AD, city-states in northern Italy began to adopt double-entry bookkeeping, which not only records income and expenses but also assets and liabilities.
However, double-entry bookkeeping is still recorded in private ledgers.
With the digital existence of human society that began in the last century, the proportion of the digital economy has become increasingly large. Economic activities that cross time, space, organizations, and legal jurisdictions require a new accounting method.
[3] The emergence of distributed ledger systems in 2009
The blockchain technology and distributed ledger (DLT) that emerged in 2009 provide a new accounting method for the digital economy—viewing blockchain from first principles, it is essentially a transformation of accounting methods, truly establishing a public, transparent, decentralized global public ledger—everyone records on one ledger, and people around the world jointly witness the recording process, thus achieving the authenticity, comprehensiveness, and timeliness of accounting.
The emergence of new accounting methods has also given rise to a new account system—from traditional bank account systems and internet account systems to the now broadly termed blockchain account system.
The value capture tool in this account is Token (cryptographic assets).
Under the current global legal framework, functional tokens are defined as virtual goods; the real assets behind security tokens are securities, just as Bitcoin is not a security, but a Bitcoin ETF is a security. The underlying assets do not necessarily have to be securities, but their derivatives are securities. Payment tokens are used for payment settlement, with stablecoins being a typical representative. Their exchange rate is generally pegged to fiat currency on a one-to-one basis, making them very suitable for payment settlement. Stablecoins ensure their price remains relatively stable and has low volatility through certain model settings, thus providing functions such as asset hedging, payment settlement, and value storage in the highly volatile cryptocurrency market.
The financial revolution of the digital age is based on distributed ledgers and encrypted capital, providing financial support for technological innovation. Unlike before, this time China and the United States are jointly leading.
03
The third accounting revolution has already taken us from bank accounts into the era of crypto accounts. The regulatory framework for stablecoins has been established, bringing significant development space for application scenarios. The use of stablecoins in cross-border trade is a very typical example. In this regard, China is one of the biggest beneficiaries.
This third accounting revolution has already taken us from bank accounts into the era of crypto accounts. The regulatory framework for stablecoins has been established, bringing significant development space for application scenarios.
The use of stablecoins in cross-border trade is a very typical example.
In this regard, China is one of the biggest beneficiaries.
In 2024, the total payment and settlement amount based on stablecoins will reach $16.16 trillion, surpassing the combined total of VISA and Mastercard, completely bypassing the traditional banking system and SWIFT network.
Traditional cross-border payments are cumbersome and complex, involving multiple intermediaries, resulting in high transaction costs.
For example, a U.S. consumer orders a $50 T-shirt from a website and wants to receive it within a week; they pay, and you ship, and that’s how it works. However, "payment" actually includes three major steps: payment, clearing, and settlement—swiping a bank card first verifies whether the account has a balance; clearing: if there is a balance, the payment amount is frozen; settlement: funds are actually transferred between different banks or accounts at a unified time. In cross-border payments, the payment process is even more complicated: if you open an account at a traditional financial institution and want to remit money to the U.S., in most cases, at least five intermediaries are involved: your account bank, a dollar remittance bank, SWIFT, a receiving bank in the U.S., and finally back to the account bank in the U.S. Private ledgers require information alignment, which cannot be done in less than two weeks.
The characteristics of stablecoins determine that they are very suitable for payment settlement. The price anchoring mechanism of stablecoins and their on-chain real-time settlement capability make them an ideal tool for cross-border payments.
Therefore, we see that many small commodity merchants in Yiwu are already users of stablecoins. By using stablecoins, they achieve trustlessness and efficient peer-to-peer transactions without the need for traditional clearing and settlement systems, bypassing SWIFT, ideally allowing funds to arrive in seconds—instant arrival, instant stocking, air freight delivery within a week, solving the issues of trust and efficiency in just one second. In our cross-border trade, an increasing amount of payment settlements have shifted to this new system, helping product sales go global. Cross-border e-commerce is transitioning from B2B and B2C to C2C. Customers are no longer foreign trade companies but individual global consumers.
In 2023, China sent out a total of 18 billion packages.
So, if there were no USDT-based blockchain settlement system, many Chinese merchants would suffer losses. However, previously constrained by regulatory gaps, relevant enterprises have always faced uncertainties in compliance, safety, and risk control, limiting the large-scale practical application of stablecoins in cross-border trade.
The passage of legislation in Hong Kong has largely addressed these negative externalities.
Why is Hong Kong promoting stablecoin legislation? Because it realizes that it must actively embrace the new payment system and cannot afford to be left out in the competition for the global trade settlement center.
04
Hong Kong is transforming into a new virtual asset financial center, with its unique historical genes and advantages… The past decade has been a critical window period for Hong Kong to build an international financial center 2.0—an international virtual asset trading center, upgrading the traditional fiat currency financial capital to a virtual asset capital.
First, it is a free port for capital.
Second, as a traditional international financial center and offshore RMB business hub, Hong Kong has a unique position connecting the financial markets of China and the West. The launch of regulated stablecoins serves both the local digital economy and acts as a digital bridge between the RMB and the U.S. dollar.
Third, the construction of Hong Kong's international financial center in the past relied on two legs: one was banking services, mainly serving trade and shipping; the other was the capital market. The growth of banking services is slowing down, and the performance of the capital market is also not very good, so Hong Kong needs to find new growth points, and this turnaround growth point is very likely to be the front-store back-factory model of the digital age and the re-export trade of virtual goods.
Fourth, historical genes. Since the 1980s, Hong Kong has actually thrived on the front-store back-factory and re-export trade of industrial enterprises. The characteristics of Web3, which transcend time, space, organizations, and legal jurisdictions, make geographical location less important; Hong Kong can position itself as a front-store back-factory in the digital age, facilitating the re-export trade of virtual goods.
The past decade has been a critical window period for Hong Kong to build an international financial center 2.0—an international virtual asset trading center, upgrading the traditional fiat currency financial capital to a virtual asset capital.
One particularly notable aspect of the Hong Kong "Stablecoin Ordinance Draft" is that—unlike the EU's MiCA framework of "functional regulation," and different from Singapore's "tiered licensing" system, it innovatively adopts the "value anchoring regulation" principle—relevant stablecoins that involve claims of Hong Kong dollar value will be regulated regardless of the issuer's location, meaning that regardless of whether you issue stablecoins in Hong Kong, as long as they are pegged to the Hong Kong dollar, they will fall under the regulatory scope. This achieves an extension of judicial jurisdiction over cross-border stablecoin activities.
This institutional design may allow Hong Kong to gain a first-mover advantage in the global stablecoin regulatory competition.
05
Stablecoins are becoming the bridge for the blockchain industry to cross the "chasm." In the coming years, stablecoins will drive a massive explosion in blockchain and RWA applications, and stablecoins and blockchain will become the most attractive track with the most success stories in the coming years.
In the coming years, stablecoins will drive a massive explosion in blockchain and RWA* (Real World Asset tokenization) applications. On the demand side, hundreds of millions of users will open crypto accounts on-chain and hold stablecoins, with user numbers growing several times in a short period. Meanwhile, on the supply side, millions of platforms, enterprises, internet merchants, self-media, and creators will begin to accept stablecoin payments, and a large number of assets will be tokenized and go on-chain to become RWA. "How to earn stablecoins" will become one of the most concerning topics for all enterprises in the coming years.
Qingguo Insights Note: 【RWA】 Real World Asset tokenization. In a narrow sense, RWA refers to the asset expression form that twins real-world assets and digital world assets through blockchain technology. Essentially, it is the generation of tradable warrants (tokens) based on real-world assets in the digital world. In a broad sense, RWA is a new track for asset valuation, empowering data and other factor markets through capital factor markets based on the connection between real-world assets and digital world assets, fully releasing asset value.
RWA is bound to grow significantly in the future. Recently, the Boston Consulting Group released a report, predicting that by 2033, the total scale of on-chain RWA assets will reach $18.9 trillion, which means that over the next eight years, the annual growth rate of RWA will reach 53%. No entrepreneur wants to miss the opportunity to board this rocket. Various application demands surrounding stablecoins and RWA will rapidly explode, and truly capable entrepreneurs will set aside hesitation and restraint to flock in, making stablecoins and blockchain the most attractive track with the most success stories in the coming years.
Here, I would like to quote a model from a classic business book to explain this phenomenon: Geoffrey Moore's "Technology Adoption Life Cycle" proposed in "Crossing the Chasm." The book points out that the user growth path of all high-tech products can be divided into five stages:
Stage 1: Technology Enthusiasts: Products are created by technology enthusiasts. For example, Satoshi Nakamoto and Vitalik Buterin created Bitcoin and Ethereum from scratch.
Stage 2: Early Adopters: Early users do not pursue immediate practical applications but are passionate about new technologies. For instance, in 2015, when Vitalik visited Shanghai, despite Ethereum's mainnet not being online yet, Wanxiang Blockchain still invested $500,000 in it.
Stage 3: Pragmatists: General users begin to focus on whether the technology can truly bring value and solve practical problems. This is the critical "chasm" period for product survival, where 80% of projects fail.
Stage 4: Late Majority: They only follow suit after seeing others benefit, making up the majority of the user base. This stage has a lower threshold, but the prerequisite is to cross the "pragmatist chasm."
Stage 5: Laggards: The "traditionalists" who always reject new technologies. They prefer stable, nostalgic lifestyles and do not accept new things, so there is no need for forced conversion.
I believe that stablecoins are becoming the bridge for the blockchain industry to cross this "chasm." Previously, when we talked about crypto and Web3, we always stayed within the small circles of "believers" and "technology enthusiasts." Many people agree with the concept, but when it comes to large-scale use, issues such as "lack of landing scenarios," "users not understanding," and "high compliance risks" arise. Stablecoins will become the first blockchain product to be widely adopted by "pragmatists." Cross-border e-commerce, freelancers, platform settlements, global payments—all are starting to use them, allowing blockchain to integrate into the real economic system not just as a narrative but as infrastructure for the first time.
However, this does not mean that simply slapping an RWA label on something will guarantee success. From the development of the crypto industry over the past decade, we have learned that development must follow objective laws and be based on value. Objectively speaking, bubbles are inevitable, but if the bubble is too large, it will always burst, which will hinder the development of the industry.
06
Chinese entrepreneurs have not only opportunities but also unique advantages in this wave of stablecoin economy and RWA… Many of the leading global projects are backed by the code, algorithms, and infrastructure of Chinese engineers.
The geopolitical competition between China and the U.S. will indeed impact the entrepreneurial environment, especially in highly sensitive areas like technology and finance. However, history has never progressed in a linear fashion, and reality is often more complex and tense than public opinion suggests. Despite the friction, I can confidently say that Chinese entrepreneurs have not only opportunities but also unique advantages in this wave of stablecoin economy and RWA.
[1] Huge existing advantages: Even now, China remains one of the regions with the most blockchain developers, the highest innovation and engineering quality, and the most active community activities globally. In fact, many leading global projects are backed by the code, algorithms, and infrastructure of Chinese engineers.
In an interview with Vitalik, I candidly suggested to the Ethereum Foundation: "Ethereum has fallen to this point because you lost China." From 2014 to 2016, China was the most solid base for Ethereum developers and users. Later, for various reasons, Ethereum became absent from China, which is a significant reason for its loss of momentum. This is true for Ethereum and for any global blockchain project; whoever gains the Chinese market gains the world; no one can ignore Chinese developers and communities.
[2] Real interests are highly aligned: The stablecoin economy and RWA represent a brand new global channel in the digital economy era. What does it mean for China? It means we can bypass the traditional U.S. dollar settlement system and centralized platforms to export Chinese goods, services, and content in new ways. This can not only create jobs, drive growth, and stimulate innovation but, more importantly, establish China's own competitiveness in the Web3 world. In other words, this is a new "digital going abroad."
[3] The new system itself is diverse: The future stablecoin economy will not be a single structure but a multi-layered, multi-regional global network with spectrum and granularity. These regions have significant innovation space and more flexible rules; with the enterprising spirit and sharpness of Chinese entrepreneurs going abroad, these markets will become our home ground.
[4] The trend is irreversible: Once the U.S. breaks the deadlock, other major economies will inevitably follow. In China, Hong Kong has already taken the lead by passing the "Stablecoin Ordinance." I believe that sooner or later, we will start discussing whether to develop offshore RMB stablecoins. I think this is a very serious strategic issue worth discussing. If we can promote it, then in these non-U.S. dollar stablecoin ecosystems, Chinese entrepreneurs will have greater dominance and voice.
[5] China will eventually embrace the trend of blockchain and digital assets, which is my consistent long-term judgment: We are a country known for pragmatism; as long as this can promote development, serve the real economy, and create benefits, it will ultimately be accepted. Once opened up, with China's market size and entrepreneurial density, combined with the hardworking and pragmatic nature of the Chinese people, blockchain in China will definitely experience explosive growth, becoming the most prosperous innovation hotbed in the world.
Therefore, for Chinese entrepreneurs, it is crucial not to miss the entire era due to local obstacles. What you see today in stablecoins and RWA is a once-in-a-decade wave. If you don't ride it, you are actively giving up your voice. If you dare to step up, no matter how big the wave or how strong the wind, there is an opportunity to secure a place in this new world.
I believe Chinese entrepreneurs will succeed!
Five years from now, eight years from now, the stablecoin economy could reach a scale of two to three trillion dollars; I believe that by then, a significant proportion of the entrepreneurs at the peak of the industry will be Chinese faces.
I have five suggestions for Chinese entrepreneurs:
[1] First is to go abroad: This wave is global; you must go out and enter the eye of the storm of the times. If you want to participate, you cannot be overly cautious; you must fight in the storm and seize positions where the rules are being established.
[2] Second is to align your heart: The rules of the industry have changed; the path of getting rich by simply issuing a coin is no longer viable. Now is an era of competing for real user value and application capability. For every product you create and every model you design, you must ask: Does it truly solve user problems? Does it create new efficiencies? Only projects that genuinely create value for users will be retained by this era.
[3] Third is to learn: Not only learn technology and compliance but also new ideas and new institutional frameworks. You cannot use Web2 thinking to do Web3 things, nor can you speculate in the stablecoin and RWA era with the mindset of issuing coins to cut leeks. This involves a whole new paradigm that requires continuous learning and breaking through oneself.
[4] Fourth is unity: In this new stage, Chinese entrepreneurs must unite and cooperate, not only for self-protection but also for resource integration, mutual learning, and even mutual supervision. This is also the beginning of building a new order in the industry. Now is the starting point for rebuilding order, and everyone needs to work together to shape a healthy ecosystem.
[5] Finally, openness: The essence of blockchain is an open, transparent, and fair collaborative network; this is the soul of blockchain. We must participate in the stablecoin economy and RWA with the spirit of blockchain to drive blockchain innovation.
07
In the past year, I have discussed the relationship between Web3 and AI with four top AI experts. They unanimously believe that Web3 and AI are two sides of the same coin and will ultimately come together. AI and blockchain together form the infrastructure of a new generation of wealth distribution systems.
Trump originally planned to establish an AI committee and a Crypto committee, but later, upon the advice of his staff, he merged them into an "AI + Crypto" presidential committee. I learned from one of his advisors about the thinking behind this decision: AI and Crypto should not be treated separately but should work together in synergy.
In the U.S., there are two typical representatives: one is Sam Altman, who leads Worldcoin, which already has ten million users globally and issues three coins every quarter; even if each is less than a dollar, it is still a huge expenditure. He represents the path of "AI + Crypto + Software"; the other is Elon Musk, who supports Dogecoin while promoting autonomous driving and Optimus robots, representing the direction of "AI + Crypto + Hardware."
These two directions are both "left hand AI, right hand Crypto." This is not a coincidence; it is an inevitable result of historical development.
In the past year, I have discussed the relationship between Web3 and AI with four top AI experts, who are either leaders of top AI institutes or head global cutting-edge technology companies, possessing a comprehensive grasp of information and deep understanding. They unanimously believe that Web3 and AI are two sides of the same coin and will ultimately come together. AI and blockchain together form the infrastructure of a new generation of wealth distribution systems. I would like to share a small anecdote: not long ago, I met with one of them again, and he also stated that AI and crypto are naturally compatible fields; currently, we are exploring ways to combine the two. I have been looking for truly valuable AI + Crypto projects. It is not about creating a chain, issuing a coin, or just slapping an AI label on it; it is about solving real problems and doing real engineering.
For example, distributed inference networks are a direction we have been investing in for a long time. We hope to build a system that can support 200, 2000, or even 20,000 devices to jointly complete AI inference tasks. This is not just a slogan; it is deep engineering at the hardware and network levels. Currently, our system is expected to launch its TGE (Token Generation Event) in two months.
Actually, as early as February last year, I reached out to the CSDN team, hoping they could mobilize developers to run large models in a distributed manner. This project has been progressing for more than a year, and because everyone is serious and grounded in their work, we feel it is worthwhile.
We are also collaborating with institutions such as the Hong Kong University of Science and Technology and the Hong Kong Polytechnic University. For example, they have already compressed AI models to run on mobile devices. We are discussing: if we cannot pre-install the models, can we collaborate with mobile distribution channels to pre-install the models during the sales process and activate them after user authorization? Our tests show that 90% of users do not actively uninstall them; instead, they are willing to keep them.
This decentralized edge computing node network can allow users to earn token rewards by sharing computing power, thereby activating the entire ecosystem. This is not an easy task, but precisely because it is difficult, it means there is an opportunity. Truly valuable innovations are never things that "everyone is doing."
We firmly believe that a deep integration of AI and blockchain will definitely happen, and we are actively looking for entrepreneurial projects with practical implementation capabilities. I know many entrepreneurs are making similar attempts, and I welcome everyone to discuss together.
References:
Blockchain: Starting from the Origin, 2025-5-15, Related link: https://mp.weixin.qq.com/s/XLxtWDc40ptOKdV1t6L3oQ
Dialogue with Dr. Xiao Feng (Part 1): The Legislation of U.S. Dollar Stablecoins is a Victory for Technological Innovation, but the Impact Will Be Very Complex, 2025-5-26, Related link: https://mp.weixin.qq.com/s/kies8gD6H_cZaX4zpOwi1g
Dialogue with Dr. Xiao Feng (Part 2): Chinese People Will Become the Main Characters of RWA Innovation. But We Cannot Walk the Old Path in New Shoes, 2025-5-27, Related link: https://mp.weixin.qq.com/s/JHn97QD8IWaI42HMsiiVxg
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