Dr. Xiao Feng of HashKey Group, often called the Father of Blockchain in China, warns that the hype around cryptoassets far exceeds the reality in emerging markets in Asia.
This influential CEO believes that stablecoin is not a payment tool but represents a fundamental reimagining of global financial infrastructure.
Stablecoin Fever: Hong Kong's Cautious Regulators Facing Market Enthusiasm
In a recent interview with industry experts, Liu Feng, Dr. Xiao Feng, shared his rational perspective on the current cryptoasset fever.
Dr. Xiao, Chairman and CEO of HashKey Group, notes that there is a fever surrounding stablecoin in Hong Kong. In contrast, regulators remain extremely cautious, he observes. This indicates a significant gap between market hype and reality, he says.
"Mainland China is beginning to re-engage with the cryptoasset world. This process will start with stablecoin. The pressure of global monetary competition is driving this change."
Xiao predicts a clear path for adoption. After stablecoin, he says, attention will shift to Real World Assets (RWA). Ultimately, this could lead to Bitcoin acceptance.
People often misunderstand the core purpose of stablecoin, he argues, rejecting claims that they were created only for payments. He explains that their primary purpose is to serve as a trading medium for volatile cryptoassets.
Beyond Payments: Blockchain as Financial Infrastructure
To understand their value, he says, we must look deeper. "Blockchain is not just a token," Xiao declares. "It is a new method of accounting."
This technology creates a new financial market infrastructure, he explains. It enables peer-to-peer, real-time payments, which significantly improves efficiency and reduces costs, according to the CEO.
For the industry to develop, compliance is essential. Hong Kong's regulators are very focused on Anti-Money Laundering (AML), Dr. Xiao notes. This is crucial to protect its reputation as a financial center.
He argues that cryptoassets' approach to AML can be superior to traditional systems. "We can track all on-chain transactions," he says. "This provides a transparent and efficient monitoring tool."
He affirms that successful stablecoin needs public, permissionless blockchains to develop. Stablecoins built on permissioned consortium chains will not succeed, he warns, because they lack the necessary openness for widespread adoption.
Hong Kong's Strategic Position in Asia's Digital Financial Race
The market is undergoing a profound transformation, he observes. "We are moving from native digital assets to digital twin assets," he says, adding that the next phase will be defined by RWA.
This development requires regulated domestic exchanges, he argues. The old offshore model is becoming obsolete for these assets. Compliance is necessary to unlock a market potentially worth trillions, according to Xiao.
According to him, Hong Kong has a unique position to become a global center. It has a common law system under the "One Country, Two Systems" framework, he notes. It plays a crucial role as an important bridge between China and the world.
"Hong Kong's destiny is to become the Wall Street of Asia," he declares. "Singapore, in contrast, operates like the Switzerland of Asia. Their financial strategy is completely different."
Dr. Xiao Feng believes the industry's future is multi-layered. The basic protocol layer must be decentralized and permissionless, he says. However, the application layer will need centralization. This is not a contradiction but a necessary balance, he explains.
"We need decentralization to ensure fairness and openness. We need centralization to ensure efficiency and consumer protection at the application level."
