Source: Techub News Exclusive Interview
Content Organizer: Peter_Techub News
On June 25, 2025, Alma, the founder of Techub News, interviewed Hong Kong Legislative Council member and National Committee member Wu Jiezhuang to discuss the details of Hong Kong embracing Web3 and supporting the development of digital assets. This dialogue focused on digital asset regulation, stablecoin development, the prospects of RWA, OTC regulation, and opportunities for youth. The Hong Kong government may relax restrictions on international exchange licenses, offshore RMB stablecoins are on the horizon, technological breakthroughs in the RWA secondary market are imminent, the rectification of OTC chaos is urgent, and the strong signal of TOKEN 2049 possibly returning to Hong Kong is evident. Hong Kong is fully committed to building a global crypto center, and the next wave of opportunities is ready to unfold! For more details, please read the full article.
Dilemma of Compliant Exchanges: High Breakthrough Costs
Alma: I noticed that Hong Kong has issued 11 licenses for compliant exchanges. However, industry insiders have also mentioned that exchanges in Hong Kong are facing cost pressures, even leading to layoffs. Compliant exchanges generally face high compliance costs, while the revenue and profits from the market side have not been ideal. How do you view the cost pressures brought by compliant exchanges and the restrictions on revenue from listing tokens? As someone with deep insights into the global market—familiar with the situations in the US, EU, Middle East, and other Asia-Pacific regions—what measures or experiences do you think Hong Kong needs to adopt to break this situation?
Wu Jiezhuang: Indeed, Hong Kong's regulatory attitude towards digital assets follows the principle of "same business, same risk, same management approach," which is also the basic logic of financial regulation. We need to examine the risk points of the industry, determine whether the risks are consistent with similar businesses, and assess whether the current quarter's regulatory details are reasonable. The Hong Kong Securities and Futures Commission (SFC) manages licensed exchanges very strictly, including product approvals, prohibiting high-risk operations such as involving explicit commodities or short selling, which stabilizes the market but limits profitability.
Currently, investors are divided into ordinary retail investors and professional investors, but the choice difference between the two is not significant. Professional investors have slightly more products but lack flexibility, leading to low trading volumes, which in turn affects revenue growth, prioritizing compliance. However, Hong Kong residents can still trade through unlicensed overseas exchanges, creating dual pressure: unregulated overseas platforms offer diverse products, while licensed exchanges are "handcuffed," limiting their competitiveness. I understand the government's cautious attitude because digital assets are emerging, and there have been scams like JPEX. The "A-S-P-I-Re" roadmap launched in February 2025 aims to enhance liquidity and proposes to increase product space for professional investors who have the risk tolerance to judge whether to invest in new products. I believe the government will gradually relax restrictions, granting exchanges more autonomy, such as providing flexibility in staking, margin, and new product development. If none of the 11 exchanges can turn a profit, this is clearly not the situation the government wants to see. While the government cannot guarantee the profitability of exchanges, its responsibility lies in maintaining a healthy market. Since licenses have been issued, better development space should be provided for the industry to attract more overseas investors.
License Policy Relaxation: Welcoming Leading Crypto Platforms Back to Hong Kong?
Alma: Understood. Do you think the SFC can further enrich the types of products, especially whether the restrictions on professional investors can be relaxed? Additionally, for exchanges like OKX, Bybit, and Binance that previously applied for licenses in Hong Kong, do you think the government might relax policies in the future and issue more licenses?
Wu Jiezhuang: Regarding product enrichment and the relaxation for professional investors, this is possible. A year or two ago, the government publicly stated that it did not welcome certain exchanges, leading to direct withdrawals from exchanges like OKX. I don't think this is the government's biggest issue; some applications may not have been approved due to individual institutions' reasons, which I cannot comment on specifically. However, in the "A-S-P-I-Re" roadmap, the SFC clearly stated that it would attract large institutions to Hong Kong, which is a positive attitude. I also hope that some of the large platforms you mentioned can return to Hong Kong to apply for licenses in the future.
Alma: Thank you for your insights. OSL, as the first licensed exchange in Hong Kong (December 15, 2020), later received strategic investment from Bitget. Do you think this method of acquiring compliant exchanges through equity acquisition could become a way for other platforms to indirectly obtain licenses in Hong Kong?
Wu Jiezhuang: I cannot comment on specific cases. However, Hong Kong's financial license management has strict requirements, whether for initial shareholders, management, or subsequent changes, all must be approved by the SFC. Licenses are not assets that can be freely bought and sold; they involve various aspects such as the overall strength of the enterprise, shareholder background, board and management suitability, financial strength, and business processes. Changes in shareholders or directors can occur, but they must go through approval, which is different from buying and selling fruits in a market. There are indeed licensed exchanges considering sale or consolidation, but any changes must be reviewed by regulatory authorities. I believe that among the existing 10 licensed exchanges, some may face mergers and acquisitions, but the premise is that they must pass approval.
Stablecoin Game: Offshore RMB as a Killer App
Alma: Recently, you have expressed many views on stablecoins, especially suggesting that Hong Kong refer to the EU's MiCA cross-border coordination mechanism. I would like to delve deeper into this topic. Currently, the global development of stablecoins is rapid, with relevant legislation in the US expected to pass soon, and the EU, Middle East, and Hong Kong are also accelerating their progress. Hong Kong's legislative process is particularly efficient, having completed the second reading and soon to pass the third reading. How do you view the development of stablecoins? I have a few specific questions: first, is it possible to issue offshore RMB stablecoins; second, you mentioned yesterday that sandbox enterprises may not necessarily be linked to licenses, does this mean that the three enterprises in the sandbox may not be able to obtain licenses? The leadership of the Monetary Authority recently stated that stablecoins need to have application scenarios; otherwise, they won't even get an application form. After the new regulations come into effect on August 1, will sandbox enterprises compete with new applicants? Additionally, the Monetary Authority has hinted that the number of licenses may be less than expected. What is your view on the prospects for stablecoin licenses in Hong Kong? Which types of enterprises are most likely to obtain licenses? What is the timeline for obtaining licenses? How do the stablecoin legislation and the upcoming OTC regulation synergize?
Wu Jiezhuang: The discussion around stablecoins has been very heated recently, with some even being overly enthusiastic. Many see it as a tool for use, but many enterprises want to issue stablecoins, thinking it is easy to make money. Every day I receive inquiries from various enterprises, including cross-border or non-product service institutions, all wanting to apply for licenses. People often see the profits of the two largest stablecoins globally (like USDT, USDC) but overlook their growth in an unregulated environment. They profit by investing user funds in low-risk investments, but replicating this model under a compliance framework is extremely challenging.
The Monetary Authority emphasizes that stablecoins need user scenarios, but the more critical aspect is ecosystem building. Stablecoin trading involves Party A and Party B, especially in cross-border scenarios; why would partners choose your stablecoin? If used internally, like Tencent's Q coin or chips from Macau casinos, it may work, but promoting it to countries in South America involves ecological issues. From a regulatory perspective, the law does not specify in detail, only requiring enterprises to have suitable candidates, integrity records, registered capital, and other basic conditions; success depends on market performance. I agree with the view of the Monetary Authority's President Yu Weimen, hoping the market does not become overly heated to avoid high expectations affecting the healthy development of the industry. Stablecoins are an important part of financial infrastructure, but not all enterprises can succeed. I personally lean towards "a hundred flowers blooming," as it is impossible to predict which type of enterprise will win—whether financial enterprises, internet enterprises, or others. Currently, the two major stablecoin issuers are neither traditional financial institutions nor internet giants; success is closely tied to the ecosystem. The collaborative relationship between USDC and Coinbase indicates that the original ecological crypto may be the key to stablecoin success.
The first stablecoin was born in 2015, stemming from the urgent need for traditional finance to buy and sell Bitcoin conveniently. Now, its reserve and payment functions are gradually emerging. I hope that Hong Kong's stablecoin legislation and licenses can facilitate global circulation, increasing the market share by $250 billion, which is currently almost entirely dominated by the US dollar, with other currencies like the Hong Kong dollar having a minimal share. The issue of offshore RMB stablecoins is complex; I will publicly question the government at the Legislative Council on July 2, and the specific response is still unclear, but I am optimistic about it. Last week at the Lujiazui Forum, Governor Pan Gongsheng mentioned the potential of digital central bank currencies and stablecoins in cross-border payments. As an international financial center and an important special region for RMB internationalization, Hong Kong should promote the diversification of related products, such as RMB counter stocks, fixed income products, etc., to create demand and improve the ecosystem.
RWA May Open Secondary Market Trading
Alma: You previously mentioned that high-quality assets from the mainland could come to Hong Kong for financing, and stablecoins are also similar to the trend of RWA assets. The Hong Kong government has increased its investment in the RWA field in recent years, and with the popularity of stablecoins, RWA has also become exceptionally hot. How do you view the challenges and opportunities facing RWA in Hong Kong? Can you discuss your views on the development prospects of RWA in Hong Kong using specific cases, such as the energy project of Langxing (Ant Group)—which is a type of comparable asset but achieved through overseas financing?
Wu Jiezhuang: Challenges exist, but opportunities outweigh the challenges. The opportunity lies in the fact that previously illiquid assets such as real estate, real estate bonds, securities, and new assets like Langxin's energy project can achieve global liquidity through RWA. Previously limited to local investments, they can now be listed on compliant exchanges in other countries, trading 24/7, leading to more reasonable valuations. There are many challenges; the Monetary Authority and the SFC are testing risks through sandboxing, assessing legal conflicts and areas for improvement, which takes time to validate. The market outlook is optimistic; RWA is the best combination of digital assets and the real economy, with great vision. However, there are no completely successful cases yet; the mindset is still limited to the primary market, and the secondary market has not yet opened.
Alma: Thank you for your insights. As someone close to policy, when do you think the secondary market for RWA might be realized?
Wu Jiezhuang: The RWA secondary market is a market behavior, and the key lies in the value of the underlying assets. If the market believes that the assets have potential for price fluctuations, trading will occur; if price volatility is low, trading volume may be small, similar to the bond market rather than the frequent trading of stocks or Bitcoin. The core of the issue is not the method itself; the methods and market coverage are already very clear. The core advantage of RWA lies in turning originally illiquid assets into liquid ones, for example, expanding from serving 1 billion people to 5 billion people, which is a significant technological breakthrough and innovation, providing new possibilities for the market.
This Year, Hong Kong's OTC Regulatory Policy Has a Great Chance to Land
Alma: I have closely observed the current situation of OTC (over-the-counter) regulation, which has always been a focus of your attention. In the Hong Kong market, OTC has become the most profitable business, with even compliant licensed exchanges getting involved in this area. Recently, we interviewed Victory Securities, and their trading volume had already exceeded 10 billion by the end of March. Can you share the latest developments in OTC regulation and future plans?
Wu Jiezhuang: There will be new developments in OTC regulation, with the second round of consultation expected to be released by the end of June. The market has already undergone a round of consultation, and the government may have new considerations; the second round will start next week, and regulatory authorities will quickly take action to strengthen OTC regulation. Currently, there are indeed many chaotic phenomena in the market. I have previously mentioned that many street exchange shops have appeared in areas like Admiralty in Hong Kong, and most of these OTC businesses are unlicensed and unregulated, allowing anyone to set them up. Some exchange shops operate legitimately, and the exchange process is problem-free, but many are related to organized crime or gray industries. News reports often cover cases where individuals carrying cash for exchange are refused service, or even driven away or assaulted; such incidents are not uncommon and are concerning.
This chaos not only affects the health of the industry but also threatens Hong Kong's financial stability, which is clearly not an ideal situation. Therefore, I hope that management measures will be introduced as soon as possible. The Hong Kong government is very cautious in legislation, fully assessing market demand and pros and cons rather than making hasty decisions. Good policies will be implemented stably after they are introduced; if they are not perfect, legislation will be postponed to avoid harming citizens due to regulatory gaps. We need to find a balance between the two. This year, OTC regulation is expected to be implemented, and I am optimistic about it, with significant opportunities.
Hong Kong's Competitive Advantages in Stablecoins, RWA, and OTC
Alma: You are involved in policy-making and closely communicate with the industry. How do you evaluate Hong Kong's advantages in the fields of stablecoins, RWA, and OTC? With Singapore set to phase out some institutions by the end of June, what opportunities does Hong Kong have under the changing global political landscape? Are industry professionals accelerating their move to Hong Kong?
Wu Jiezhuang: Indeed, in recent years, more and more industry professionals have come to Hong Kong, and it has become exceptionally lively compared to two or three years ago, not limited to mainland Chinese but also including people from the US and other places. Events like Consensus and the Bitcoin Forum are both held in Hong Kong; Consensus was very successful in February, and next February it will upgrade to the largest venue at the convention center, integrating AI; Bitcoin Asia will also be held again in August. These events attract international participants, highlighting Hong Kong's potential as an Asian hub.
As the world's largest economy, the US, and Hong Kong as China's second-largest economy, it is feasible to strive to be the leader in Asia. After the digital asset licenses are issued, Hong Kong may welcome a new wave of leaps forward. Traditional finance has seen improvements, with over 100 companies queued for IPOs in Hong Kong, and the virtual market and new finance will complement each other. For example, after Circle's listing in the US, many crypto companies are considering going public in the US, injecting new momentum into the industry from traditional financial resources. Hong Kong may replicate this trend, with companies like OSL and Guoya Interactive showing signs of shell acquisition and integration, which may lead to a scaling effect in the future. The market capitalization of the three major crypto companies in the US is nearly $200 billion, and there is still significant growth potential in the Hong Kong market. If one believes in the integration of the Chinese economy with the US, the potential in this field should not be underestimated.
Safety Strategies for Ordinary People Holding Bitcoin
Alma: Recently, industry friends have started acquiring shells in Hong Kong, replicating the early speculative listing model. How do you think ordinary people can safely hold Bitcoin?
Wu Jiezhuang: I have been directly purchasing spot since 2017, diversifying storage between cold wallets and hot wallets, which is relatively professional. However, ordinary people need to be aware of the risk of losing private keys, as no one can help. I recommend opening accounts through ETFs or licensed exchanges with insurance protection, as it is simpler to operate.
Opportunities for Youth Participation in the Web3 Industry and Educational Planning
Alma: You have served as the chairman of the Hong Kong Youth Association and are concerned about youth development. As a representative of self-made individuals, how do you think more young people in Hong Kong can join the industry, and what plans do you have for employment, entrepreneurship, or investor education?
Wu Jiezhuang: There are two aspects. First, investment education needs to be strengthened, and the government should increase efforts, as the industry is new, and some citizens mistakenly view stablecoins as investment tools, needing to popularize their tool attributes rather than profit-making means. Promoting knowledge about trading with licensed institutions and product logic is essential, and the industry also needs to conduct anti-fraud education; community activities can help with this. Second, youth opportunities are a key focus of my election platform, and I hope to break the small development space dilemma. This term of the Legislative Council is coming to an end, and I hope to promote youth participation in the Web3 industry, but currently, local youth participation is insufficient, with foreign individuals dominating. To address this, we are collaborating with universities to conduct summer internships, exchange programs, and training courses to help young people understand the essence of the industry. There is demand for both technical and non-technical positions, such as programming, blockchain development, insurance, product design, risk management, or market planning. Hong Kong's low financial, legal, and tax rates, along with convenient living conditions, make it the best platform. I am committed to creating opportunities, as the Consensus event attracted over 200 companies to participate.
TOKEN 2049 May Return to Hong Kong Next Year
Alma: You have promoted Bitcoin Asia and Consensus to come to Hong Kong. In light of the impact of the Singapore TOKEN 2049 event being phased out, is the industry concerned about whether it will still go to Singapore this year, and whether it will move to Hong Kong in the future? Will other 2049 events come to Hong Kong? Have you communicated with the organizers?
Wu Jiezhuang: TOKEN 2049 was originally held in Hong Kong but was postponed to Singapore due to the pandemic; this year is the third year, and it may return next year. Hong Kong is an open market and welcomes participation from all parties without competing for benefits with others. I have friends in contact with the organizers, and we will observe the progress.
Conclusion
This interview showcases Hong Kong's ambitions and strategic layout in the digital asset field. Legislator Wu Jiezhuang is insightful about global trends and proposes policy suggestions to relax licensing, promote offshore RMB stablecoins, and develop RWA, injecting new vitality into Hong Kong's crypto industry. At the same time, the imminent implementation of OTC regulation, enhanced youth education planning, and the possibility of TOKEN 2049's return all signify that Hong Kong is accelerating its pace toward a global leadership position in Web3. Techub News will continue to track the Legislative Council's inquiry on July 2 and subsequent developments to provide readers with the latest insights.
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