Recently, the former chairman of the China Securities Regulatory Commission, Xiao Gang, appeared at the 2024 Bund Conference forum "Discussing the Future: Exploring the 'Entity' of Web3 Digital Dreams" as a keynote speaker. He stated that RWA is a vivid practice of finance returning to its essence and serving the high-quality development of the real economy.
He pointed out that the 20th National Congress of the Communist Party of China and the Central Financial Work Conference have both emphasized the need to focus on five major areas: technology finance, green finance, inclusive finance, pension finance, and digital finance, clarifying the direction for the development of financial technology. The development of Web3 can provide strong support for enhancing these five areas and promoting the development of financial services for the real economy.
He believes that RWA, through Web3 technologies such as blockchain, gives existing physical assets and intangible assets like intellectual property, carbon credits, and data elements in the real world a digital form, establishing a value mapping between the real world and the digital world.
He also proposed that we should adhere to the principle of technological neutrality and proactively strengthen regulation. "Virtual currencies like Bitcoin are not equivalent to Web3, and tokens, which we refer to as cryptocurrencies, are not necessarily fully decentralized." Moreover, he stated that we need to enhance international regulatory cooperation, coordinate policy-making, and jointly explore regulatory frameworks that adapt to new technologies.
This forum is co-hosted by Ant Group and ForesightNews, aiming to discuss the latest developments and industry practices of Web3 technology, listen together to the voice of innovation from Asian financial centers, and seek successful paths for the tokenization of real-world assets from concept to implementation.
The organizers believe that with the advancement of new productive forces, technological development is seeking new intelligence. Cutting-edge technologies driven by technological innovation to serve industrial development are beginning to unfold. Looking ahead, cutting-edge technologies represented by blockchain privacy computing and big data AI are becoming key forces driving the quality and efficiency of the digital economy.
Here is the full text of Xiao Gang's speech:
Distinguished guests, ladies and gentlemen:
Good afternoon, everyone. It is a great honor to participate in the 2024 Bund Conference today and discuss the entity of Web3 digital dreams with all of you. I warmly congratulate the smooth convening of this forum and extend sincere welcomes to each guest and audience present.
Every leap in information technology profoundly changes our way of life and work. From the popularization of the internet to the rise of mobile internet, to breakthroughs in blockchain technology, and the rapid development of emerging technologies such as big data and artificial intelligence, the wheels of technology keep rolling forward, leading us into an entirely new digital era.
Today, we focus on Web3.0, which is not just an iteration of a technical term, but also signifies a network ecosystem that is safe, transparent, and gives users more control. It paints a new vision of the internet's development shifting from information connectivity to value connectivity.
The digital economy has become an important engine driving global economic growth. The 20th National Congress of the Communist Party of China and the Central Financial Work Conference both emphasized the need to focus on five major areas: technology finance, green finance, inclusive finance, pension finance, and digital finance, clarifying the direction for the development of financial technology. The development of Web3 can provide strong support for advancing these five areas and promoting the development of financial services for the real economy.
In the field of technology finance, decentralized financial platforms brought by Web3 technology can provide global funding sources for science and technology innovation companies, increasing the flexibility and capital efficiency of entrepreneurs' fundraising efforts. Smart contract technology can automate business logic, execution, and transaction transparency, reducing operational costs and risks.
In the field of green finance, Web3 technology can help establish a more transparent and trustworthy system for tracking and trading carbon footprints, enhancing the traceability and credibility of green finance.
In inclusive finance, Web3 helps lower the barriers to financial services, enabling more people, especially those in remote areas and low-income groups that the traditional financial system has struggled to reach, to access financial services at a lower cost.
In pension finance, the transparency and security mechanisms provided by Web3 have potential value for building long-term stable pension management and investment platforms.
In digital finance, Web3 has promoted the digitization of financial assets, such as through the tokenization of various assets, making the issuance and trading of assets more efficient and flexible, while also strengthening users' control over digital assets, providing the infrastructure and technical support for the in-depth development of digital finance.
In this transformation brought by Web3, the tokenization of real-world assets, referred to as RWA, serves as a bridge connecting the digital and physical worlds, representing a vivid practice of finance returning to its essence and serving the high-quality development of the real economy.
Our traditional industries, especially manufacturing, have accumulated a large number of real assets, but they are often undervalued due to a lack of liquidity, or because they are not well operated, leading to low asset utilization rates, which restricts the release of economic growth potential.
RWA uses Web3 technologies such as blockchain to give existing physical assets and intangible assets like intellectual property, carbon credits, and data elements in the real world a digital form, establishing a value mapping between the real world and the digital world.
This approach can enhance the liquidity and tradability of real assets due to its digital characteristics, allowing more investors to access investment opportunities in quality assets and overcoming financing bottlenecks in traditional industries. On the other hand, the use of blockchain smart contract technology can improve the transparency of asset operation management and transaction disposal, reduce moral hazard, and effectively increase the efficiency of asset trading while lowering transaction costs.
Of course, as we embrace Web3 technology, we must also be aware that any technological advancement comes with risks and challenges. How to effectively manage risks while promoting technological innovation is an important issue we face.
First, we need to keep up with industry innovation trends, mobilize more innovative momentum among market players, and explore the implementation of innovation pilot programs.
Secondly, we need to proactively strengthen regulation. Virtual currencies like Bitcoin are not equivalent to Web3, and tokens, which we refer to as cryptocurrencies, are not necessarily fully decentralized. We should adopt the principle of technological neutrality—we often emphasize this principle of technological neutrality, closely monitoring external risks, and focusing on the authenticity, compliance, and volatility of RWA assets. Strict risk control should be enforced on off-chain assets, and strict control should also be applied to speculation on-chain.
Again, we need to strengthen risk management and ethical education in technology, enhance public risk awareness, and strengthen industry self-discipline. Lastly, we must promote international cooperation, encouraging technologically strong market institutions to participate in international innovation projects and to learn from international experiences.
At the same time, we need to strengthen international regulatory cooperation, coordinate policy-making, and jointly explore regulatory frameworks that adapt to new technologies. For example, the World Bank is studying the use of Web3 and RWA in infrastructure investment, while Singapore and Hong Kong SAR are also actively developing Web3, and we should consider further cooperation with Singapore and Hong Kong in areas such as cross-border investment and trading of RWA to attract overseas funds, invigorate the physical assets of domestic traditional industries, and inject more liquidity into the domestic real economy.
Dear guests and friends, Web3 is not only a technological revolution but also a shift in thinking. Let us take this forum as an opportunity to seek paths for development, build a foundation for security, and create a future road together, hand in hand, in the wave of deep integration between the real economy and the digital economy.
Once again, thank you all for your participation, and I look forward to hearing the insights of each guest in the upcoming agenda. I wish this conference and forum great success. Thank you everyone.
