Looking back at history, the development of Web3 will develop rapidly again after experiencing shocks.

This morning, at the main venue of the "2023 Hong Kong Web3 Carnival", the Financial Secretary of the Hong Kong Special Administrative Region Government, Paul Chan, delivered an opening speech.

The following is the full text of the speech:

Good morning! I am very happy to attend the opening ceremony of the 2023 Hong Kong Web3 Carnival. This four-day carnival is a grand event that brings together global Web3 technology leaders, experts and scholars, and industry elites. I am very happy to know that more than 10,000 people have signed up to participate. Everyone will exchange and discuss the global development trends and hot topics of Web3 and discuss future development. First of all, I would like to express my warm congratulations on the successful holding of the carnival, and I also wish the four-day event a complete success. Friends who have come from afar have a pleasant journey in Hong Kong these days and have a fruitful harvest.

The rise of Web3

When it comes to Web3, there are many different opinions. I think we should look at it from the historical perspective of technological change. Technological change has always led to innovation in business operations, and business behavior will in turn drive more technological change. This cycle often becomes the driving force for economic development.

Computers and the Internet are such forces of change. Microsoft and Apple were founded in the 1970s, and they gradually made computers a widely used tool. As the computing power and capacity of computers continued to increase, optical fiber became increasingly popular as the backbone of communication networks. The combination of the two actively promoted the development of the Internet and created huge business opportunities.

With the rapid development of technology, the Internet has shifted from being a communication channel for specific institutions to Web1.0, which has created a group of companies based on the aggregation and distribution of information. In the past 20 years or so, the Internet has developed into Web2.0, which has both social interaction and the popularity of mobile terminal devices, creating a new generation of giant companies. However, Web2.0 belongs to the centralized Internet, and users' data and information are collected and controlled by large Internet platform companies. They have the advantage of data and information, and thus obtain a lot of advertising revenue and economic benefits.

With the rise of blockchain technology, many people believe that the Internet has entered the Web3 era. The immediacy, transparency, efficiency, disintermediation, and platformization of blockchain technology break the original situation where data and information are controlled by specific Internet platforms. Data will be jointly owned by builders and users, making the Internet "decentralized." Of course, Web3 is in its infancy. Currently, common applications include cryptocurrencies, decentralized exchanges, digital identity verification, decentralized financial services (DeFi), blockchain games, and even NFTs, but it is conceivable that there will be more new applications and opportunities in the future.

In fact, the rise of Web3 has many people rubbing their hands and looking for new opportunities; but at the same time, many people are taking cautious steps, worried that future development is out of control. In my opinion, whether at the macro level or at the level of individual enterprises, the key to the real success of Web3 is to better serve the real economy and market needs, and to solve long-standing pain points and difficulties with innovative technologies, models and applications, improve efficiency, create a better experience, and create new value and new models. This can be an improvement on the old basis, or it can be a "disruptive creation."

Challenges and opportunities

So how will Web3 develop? I would boldly say that now is the golden opportunity for the development of Web3, and also the most thrilling moment.

The reason why it is so thrilling is that looking back at history, every major trend will inevitably experience shocks at the beginning. From the dot-com explosion in 2000 to the virtual currency in recent years, and even the recent collapse of virtual asset exchanges, some banks whose main customers are start-ups have been implicated, which has also brought shocks to the market. Therefore, we must look at the development of Web3 calmly and prudently.

It is a golden opportunity because after the shock, the remaining market participants will become stronger and investors will become relatively calmer. Market forces will drive enterprises, technologies and applications to generate new forces and new models, allowing strong companies to survive the market take-off stage. On the other hand, governments and regulators will generally learn from experience and formulate appropriate strategies to plug loopholes and manage risks after the shock, so that the market can develop steadily and sustainably.

From a historical perspective, Web3 development will grow rapidly again after experiencing a period of shock. Recent events have told us that the problem with virtual currencies, virtual assets, and trading platforms is not the lack of innovation, but whether they have effectively managed risks under a proper regulatory framework.

The premise of promoting the development of Web3 is that the stability of the financial system and investor protection cannot be damaged. In this regard, everyone here is a participant who cares about Web3. I believe that everyone has also deeply understood from recent events that appropriate supervision is necessary to create a "sustainable development" environment and give everyone a more ideal development space.

Under this premise, Hong Kong actively embraces the development of Web3. As a starting point, we published the Policy Declaration on the Development of Virtual Assets in Hong Kong in October last year. Simply put, we will promote the sustainable and responsible development of the virtual asset market, and allow virtual assets to innovate and develop to the greatest extent under the regulatory approach of "same business, same risks, same rules". Since the publication of the Declaration, over the past six months or so, friends in the Web3 circle have paid attention to the development of this aspect in Hong Kong, and many of them have already settled in Hong Kong; some have finally decided to set up offices in Hong Kong after a period of observation.

In this year's Budget, I proposed three major directions from the perspective of "high-quality development", including the development of the digital economy, Web3, and the positioning of an international green technology and financial center. Regarding the development of Web3, I will set up a virtual asset development task force to work with industry representatives to submit recommendations to the government on the sustainable and responsible development of the industry. In addition, I have also allocated $50 million to Cyberport to accelerate the development of its Web3 base.

Summarize

Dear guests, dear friends, the road of innovation and change is never smooth, and it is foreseeable that Web3 still has a long way to go in its development. Nevertheless, after analyzing the situation and summarizing the development experience of other places, we believe that Web3 can bring great benefits to the market and solve pain points for the market and society. This is also an irreversible future trend.

The SAR Government is full of expectations for the development of Web3 in Hong Kong. I hope that we can stick to the core elements of "steady and prudent advancement" and "solving pain points" and work together to build a thriving Web3 ecosystem in Hong Kong, leading to more technological breakthroughs, model innovations, and application innovations. I firmly believe that with Hong Kong as our base, we will expand our footprint to the ASEAN market, the Asia-Pacific market, and even the world, and there will be opportunities everywhere.

There are many discussion sessions at today's conference. I look forward to more in-depth discussions on different topics, such as how to use blockchain technology to promote the better development of green technology and green finance, and how to help traditional enterprises improve their operating efficiency with the help of new technologies. I hope that everyone's insights can lead the innovation direction of Web3.

Finally, I wish the Carnival a complete success again! May all the guests and friends be healthy, happy at work, and prosperous in their careers. Thank you!