The Era of Web3 Compliance Has Arrived: Exchanges Face New Challenges and Opportunities

Recently, a series of actions in the Web3 field from Hong Kong has attracted widespread attention in the industry. It is reported that the Hong Kong Securities and Futures Commission has received over 80 substantive business reports, and it is expected that more than 130 virtual asset exchanges will apply for licenses. Although Hong Kong's compliance policies are relatively lagging, its status as an international financial center has led many to be full of expectations for its development prospects in the Web3 field.

Many exchanges choose to pursue a compliance route in Hong Kong, rather than in places like Dubai, Poland, or Turkey, demonstrating their confidence in Hong Kong's financial ecosystem. This compliance path holds immense potential and, if executed properly, could even impact the global financial landscape.

However, the current Crypto trading model is still relatively singular. There are mainly two trading methods: one is users trading on the exchange with the order book, which is fast but lacks bargaining space; the other is conducting price inquiries in social groups, which has high flexibility but poses safety risks. Industry insiders point out that the Crypto trading world lacks tools similar to "over-the-counter trading platforms" in traditional finance.

With the promotion of compliance policies in Hong Kong, many traditional financial institutions and practitioners have begun to layout Web3 finance. However, this process is full of challenges and requires time to understand and adapt to virtual assets, while facing the uncertainty of investment returns.

For traditional financial investors in Hong Kong, the entry barrier for DeFi is relatively high. In contrast, CeFi aligns better with their usage habits and is easier to get started. However, the threshold for compliant CeFi is also not low. Hong Kong has a certain conservatism in its regulatory framework for virtual asset trading, imposing strict requirements on asset management and custody of exchanges.

Nevertheless, this also provides the exchange with an opportunity to explore a new model: first attracting users through the lower-threshold CeFi, then helping them understand DeFi through comprehensive user education, ultimately becoming advanced users of Web3. Regardless of the approach taken, user education is an indispensable part.

In the development process of Web3, there exists a contradiction: projects that can make money in the short term often do not align with the goals of long-term builders. Builders who genuinely strive for industry development may find it difficult to gain returns in the short term, while some highly speculative projects can quickly turn a profit. Solving this contradiction requires the support of long-term capital, rather than relying on short-term speculative funds.

In the current global interest rate hike environment, the Web3 community faces pressure from capital outflows. How to attract new liquidity tests the selection ability of projects and teams in the next wave of narratives. There needs to be capital willing to accompany projects in the long term to jointly contribute to the industry.

As an important window for China to enter the global financial market, Hong Kong's development in the Web3 field is highly anticipated. Digital currency may become a breakthrough point, and it is hoped that the Hong Kong government can adhere to the original plan to create a favorable environment for industry development. The Hong Kong market possesses the advantages of professional and diligent talent, coupled with supportive policies, and is expected to play an important role in promoting the development of Web3.