The Rise of Hong Kong as a Global Crypto Epicenter - TOKEN2049 Singapore 2023

how's everyone doing thank you thank you it's okay I understand you know I do complex the last panel is always the one that's the toughest but we're here to bring it everyone's super psyched we had a lot of Red Bulls upstairs we're ready to go uh before we begin let's just dig a quick hello an introduction starting with Adrian hi everyone this is Adrian I got the Newman Hong Kong t-shirt today it intentionally made it for a 2049 actually the telephone was from Hong Kong so we are a VC firm a headquarter in Hong Kong with persons in Singapore India and us as well uh we predominantly invest in consumer economy space uh developer tours and infrastructures so hopefully we'll share something interesting later hi I'm Gary I'm the co-founder and CEO of terminal 3 which is a decentralized user data infrastructure company and also the chairman of web3 Harbor which is the web 3 Industry Association in Hong Kong hi guys I'm Karen a head of social of nine gag and meme land I'm really happy to be in Singapore and thanks for having me uh Edith young General partner at race Capital we are seed investor in Solana lightning Network um poly sign and many other projects great and I'm Casey you may know me I'm usually doing that other guy's job at rise and web Summit but I started a new group called hkg Dao organizing and building the Builder community in Hong Kong so I guess the the thing that first I want to say is that we're not being paid by the Hong Kong government to be here right this is 100 a bunch of people are super bullish in Hong Kong and we're here in Singapore everybody must know token 2049 was originally started in Hong Kong it did a great run there during the Ico era and things like that of course the pandemic turned things on its head but I the the team has just brought up a slide that we created for the hkg Dao ecosystem of the web three companies the investors the brands uh the Dows the conferences and the community that exists there so we'll talk a little bit about that but I want to get a Vibe check from the panel here starting with Adrian 2019 everybody knows what happened in 2019 and then of course Hong Kong went through some crazy stuff during the pandemic what are you seeing today in Hong Kong what's exciting in 2023 as we are here in Singapore talking about Hong Kong I think ever since pandemic you have 10 meetings in the afternoon Central just people are so eager to do business and I think that's at the end in Hong Kong yeah Gary yeah the excitement is definitely back uh the industries that drove Hong Kong's economy pre-pandemic are coming back uh the art culture obviously Financial Services businesses technology is just so much opportunity in Hong Kong I'm super I'm not a hong konger uh professional Observer for many years of Hong Kong I'm just super excited to be building there right now yeah yeah I mean like we have holders to Hong Kong and um they're very sophisticated and we have regular meetups and it's just like it feels like it's really happening and good to see everybody in like one space and they're still bullish in this market so um yeah really excited about it I'm obviously Bayer born and raised in Hong Kong but I spent most of time in in the US I really think Hong Kong is completely opposite of what's happening in America in the U.S it's almost like you can't even say the word crypto people are like scared there's some like bad happen um but walk through this and or if you come you guys come visit Hong Kong it's completely nice and day and I was reading this article earlier in backstage about John Lee who's the current chief executive literally say that Hong Kong um he wants Hong Kong to be the number one web three Hub in the world and in some sense I think it already is um and you know Gary probably can talk more coming from Webster Harbor there's just so much going on regulatory wise infrastructure wise to make people feel you know as a developer make them feel safe safe to build um to build in Hong Kong otherwise you know Adrian wouldn't set up his fun investing actively in the space in in this in the in the U.S pretty much like most of the funds billions of funds from the Paradigm to Andreessen they're all like literally shifting from being a crypto fund to an AI fund and you're like what the hell and the active investor is a lot less now compared to before yeah I agree so I also spend a lot of time I lived in Hong Kong for over 20 years and I went back to Canada during the pandemic and then saw this kind of thing happen over there but coming back to Hong Kong it's crazy when you land and you see ads for the sandbox and the rmtr which is Singapore's MRT I'm finding a very interesting letter to change there but there's a lot of that there's nft magazines in 7-Eleven telling people how to open their wallets and buy nfts I was very surprised when I tell people from the US that this is happening they can't believe that this is something that they see there so right now on the on the panel we've got two investors we've got two Builders so I kind of want to start with Adrian again you know what is Hong Kong how is Hong Kong positioning itself right now as to be the hub for uh web 3 Innovation and investment like how are they positioning themselves to the world we all saw the hello Hong Kong campaign right giving out free tickets to people to fly in but how do you see it from an event maybe from an Investor's point of view well I think I I talk about actually when I first time Gary we talk about the definitions of a hub and I was confused about Hong Kong spending all the times on licensing and Regulation and all this but turns out I formally formulated the thesis is if you have to become a Global Hub it's not a capital Market have a capital Market a license one a stable one and then you go with talents and users so Hong Kong is in a stage of creating that established Capital Market for crypto we have a license exchange being approved start trading for retail starting from June time this year so I think the next stage for positioning ourselves among all the Asian countries if not globally is how we can attract talents into the City and attracting talents is not purely talking about just Technologies but also we have referee Hardware we have people company like nine Geck doing amazing things here to attract talents coming in the city and we have the back of mainland China and that's sort of where we get talents and also potentially users you're looking Hong Kong over 8 9 million City people people living in the city but the main thing is we have 1.2 billion users potential users in mainland China and how web free could be the you know Hong Kong could be the Hub with a referee Hub getting access for Mainland Chinese I think that's how we become a global web free Hub okay Adrian what are you investing in in Hong Kong well I mean it's a good question good question so we actually just invested in uh two Hong Kong companies the first one is mimlan here which the founder is here as well Ray the second second in Hong Kong is ordinal wallet because of the BDC historical uh historically happening over the past five six years so we invest in a company called experts which is the largest become wallet but with a 500 base in Hong Kong okay great okay Edith do you want to moderate this because yeah that was my question later okay Gary tell us what's your your definition of the Hub in Hong Kong from the Builder's point of view yeah from the Builder's point of view honestly regulation does come first and it's I know it's a boring topic for everyone to continually talk about uh but for technology crypto to exist for us to be able to build Tech blockchain at scale for Consumer applications we do need money crypto and money blockchain to work and Hong Kong is just an incredibly unique place it's one of the top five Capital markets in the world it is the second largest um you know asset trading Mark in the world especially around art it is one of the great Logistics hubs of the world as well it's the creative and Cultural Center for China still and so all of these things mixed together actually gives the ingredients to actually build a phenomenal hub for web 3. however I think that there's a very distinct flavor to what the web3 Hub in Hong Kong will eventually look like because I think that they're going to be many web3 hubs it's not going to be one Singapore is going to have its flavor uh Switzerland is going to have its flavor Dubai will have its flavor Hong Kong definitely and I think what Hong Kong's flavor is going to be besides the capital markets is that it is going to be an infrastructure this is a place where traditional Enterprises will move into the web 3 world we as Hong kongers and Hong Kong Builders are going to build the on-ramps and the off-ramps that connect traditional systems to these new decentralized systems and actually allow for future web3 scale that's what makes Hong Kong special and I'm really excited about that future so it's not so much that we are necessarily building the consumer Tech and consumer products besides the meme land that is going to change the world but we're building all of the rails and the roads that's going to make everyone else's consumer projects scalable yeah great so Karen as you can see when there's I would say now because mocha verse just raised 20 million dollars this week I had to update this thing but meme line is one of the big Brands coming out of Hong Kong next to Anna mocha like everybody in the world knows this brand like how do you see that fitting in Hong Kong like is in terms of like the different bill Builders and different companies in in the city I think like I think Talent that's like a good topic for us like because we've been around for 15 years and we're a veteran in the tech space but we're always like actively hiring in Hong Kong right so I think like we're trying to um build a company where we can like attract the talents as much as like building a remote space um that is like comfortable for Builders as well so I think like the environment in Hong Kong is important for us to build fearlessly and um still painfully bullish about the future so I think like that's our what we're looking at right now yeah great so edif and from you from your side you see a lot of hubs in Silicon Valley of all the different Tech build up when you come back to Hong Kong like how do you see the Hub and how do you see it growing through either investment or through some of the startups that are growing out of Hong Kong and scmp about you know can Hong Kong be the next slogan Valley and and I think Hong Kong in some sense is already sort of the Silicon Valley for for web 3 have everything to do with meme land it's basically sort of the the Facebook of web3 and the mocha is like the Google of F3 and both of these players are not just another companies who's like oh this is really cool and I wanted to start something new it's very very sophisticated web 2 player that really understands social and gaming and now is bringing sort of another layer um to to this ecosystem so in some sense and and in combination of you know by the way I don't know if you guys know that I recently talked to some friends at the Hong Kong Stock Exchange um their daily trading volume is about 20 billion and Shanghai stock exchange 200 billion and if you think about it a combination of having social fi which is you guys and game five which is more animoker and plus the existing fintech Finance Market you really like the talent is already built in and is there so I can tell you like in the States you come to Silicon Valley no one understands Trevor odifa like they don't trade like they are Geeks and then you talk about crypto gaming and then they'll be like we don't want to attach crypto so this is the one place where you don't have to explain if you wanted to come to the city to build you already have all the talent so it's like there locally yeah great okay so now I want to build upon that on that point so Gary and Adrian probably know more about this how what is the government's plan I think a lot of people know about the June 1st thing yeah happen there's a lot of exchanges applying for licenses in Hong Kong people coming in from China coming from all the world trying to open exchanges in Hong Kong how does that change the landscape are we become a big trading comp uh City now or does that do something else to the city and what is the government doing about this yeah so the Hong Kong government has decided uh since the end of last year that at web 3 and web3 development is going to be a key agenda of policy and regulation for Hong Kong going forward for how long not sure but it is not a short-term or near-term goal only it is a long-term goal the way that they're articulating it they are starting with financial services regulation that makes all the sense in the world the first thing that you guys know of starting in June 1st there is now a path to retail retail trading is now legal you can get you can get a retail trading platform licensed and then there's a lot of other moves that are coming including stablecoin regulation that will likely come to Hong Kong early next year new data regulations new vast regulations Dow regulations that are being discussed throughout government now Hong Kong is a financial services Hub it is a financial City and Hong Kong does see the government does see this as an opportunity to build the city as a virtual assets trading hub for the world that's where they're going to start bring the world's virtual asset trading all the infrastructure all the money right all the assets itself and base it in Hong Kong it makes sense the financial center is there the common law system is there which is what makes Hong Kong one of the large IP hubs for the world already anyway right and so that's the first move but increasingly what I think makes us all relatively bullish is that even though there is a lot that the government officials and Regulators still need to learn they're asking the right questions and they're listening to the people here they're listening to eat it they're listening to Adrian they are actually trying to learn about what comes next what is beyond Financial Services what does web 3 really mean I I can tell you when they announced that Hong Kong was going to be a web 3 Hub they probably had a very narrow definition of web 3 what web3 is okay but now they're expanding Beyond just financial services and bit by bit I do believe that Hong Kong's policies are going to drive investment in um and the actual local policies uh to build up the creative decentralized internet that we all want to see right Adrian stablecoin Hong Kong well um yeah I mean Gary has mentioned a lot about about what happened in Hong Kong already uh stable coin out to be a river asset uh you know derivative potentially in the future is obviously important agenda in on every from my perspective what definitely is thinking about the one more point is during indominance which Gary was there as well with the government which never happened four or five years ago crypto was all about regulations and enforcement and usually you just hear from the security and future commissions about crypto four or five years ago but the indomiting with government there has the bureau Chef they have Hong Kong ma had the sfc had that the financial secretary in the room just talking to a bunch of crypto industry people and we were able to talk about how what Gary mentioned just now it's not just about a financial market and how we can bring more Diversified companies from the States from Europe Middle East to Hong Kong I think that's a key difference wouldn't have happened a few years ago right this is definitely it wouldn't happen to any in any thing any I haven't thought about any years that okay so the question is why is this happening now then what is the magical movement that Hong Kong is now jumping into this space there's there are many reasons we cannot boil this down to a single reason or single trigger point okay I'll tell you this city that we're in right now has a lot to do with it Singapore I I mean like yeah Singapore over the course of the last several years has taken advantage of Hong Kong's originally you know policing policy around uh around crypto and Singapore has prospered because of it Builders came here companies came here Capital came here um government would never admit this but the reality is that you you can't not notice that right the squandered opportunity Hong Kong was the home for six of the top 10 exchanges in the world at one point right and then they all left and so this is something that I think they're very well aware of that over the course of the last few years the policies in Hong Kong um have left a hole and uh thankfully they are I think switching paths before it's too late and that that gives me a lot of Hope yeah well and and one little point is uh when that when I was when I was going out with the government in Japan to visit the Japan government on behalf of Hong Kong this April happening this year is the official saying that it's a proof of one country to system yeah I think that's one thing that no one dares to say it but it's official that web free being uh being approved to be done in Hong Kong while mainland China you can do it it's basically one country to system yeah yeah um just before we continue on that how about Karen you know you're more than nfts uh world you know I come back to Hong Kong and there's magazines uh nfts tons of board ape holders in Hong Kong how do you see that Community being yeah exactly I want to bring up the ape Fest is coming to Hong Kong right in November and we're doing our event meme land event in during the same week so I think like we're really seeing the great potential of like uh more sophisticated nft holders in the city and uh we are happy to build a community for them and we really want to make them see us as a hub for people to get together and share the knowledge yeah great okay so Edith now you've heard of this and all seen all this what is and you work in the Bay Area so you've seen all the Builders out there what does Hong Kong have a tactical advantage over say Singapore or the states for building in web 3 from all these new things that are coming out oh of course okay of course yeah well I I think it's amazing to see like meme land and also Anna mocha raised almost a billion dollars right and and it's like so when I actually look at a company happen to be in Hong Kong but it's super Global I don't think most people actually know you're from Hong Kong who cares yeah in fact like what three is really about you know make and by the way I think because what's going on in general with what's going on investment in 2021 30 billion invested in crypto so as 2022 the this year only 5 billion 80 percent drop and if you can imagine most of the investor are really scared to deploy in the U.

S where are they going to go they're going to go to Hong Kong because this is the one place where they know is very very government friendly and the framework is there so I actually think that if you are located in Hong Kong this is literally the mecca where one place will attract the most investment because you don't have to be afraid to build so do you mind if I asked so yeah as a Silicon Valley VC are you hearing your peers are they actually considering moving Capital towards Hong Kong explicitly so not only just Capital moving per se there are companies even in the US they're like maybe we should actually move our headquarters somewhere else where their Clarity on what we're doing so of course Singapore Hong Kong Dubai are some of the hot spot but this is the moment where I don't actually care where you're located because the whole world is decentralized but you just want it to feel a little bit better that no one is going to knock on the door in the middle of the night while you're building yeah exactly it's not a zero-sum game this is the thing that is so important to understand it's not Hong Kong versus Singapore Hong Kong versus Dubai it's the fact that all of these cities are going to have their advantage their unique advantages and together we actually create a global ecosystem for web3 yeah yeah yeah so Karen and I co-host a show called the GM show for part of meme land yeah I talked to a lot of Builders around Asia and what they're doing so we find like Singaporean startups would raise money here Hong Kong us and then disperse their team around Asia where maybe some of the development costs are cheaper or lower things like that uh Gary are you doing the same thing in Hong Kong Terminal 3 do you raise money from somewhere else and then you have the c-suite in Hong Kong and then you're going around hiring other people or how does that work yeah no more I think a lot of Hong Kong companies do that not just in the web 3 space uh we raise money um not that much but we raise money from both Singapore and and Hong Kong um and then yes our leadership team founding team is in Hong Kong we're a Hong Kong headquartered in Hong Kong based but we do have Engineers all around the world uh we have engineers in Singapore and Vietnam and India some in the Ukraine and uh and this is what I think is going to be sort of a future model these companies are decentralized and distributed anyway and Hong Kong was a great place to actually base the company have core Personnel because top talent does exist in Hong Kong increasingly is coming to Hong Kong but there are also people from around the world who want to work for these global companies based in our city and so we can actually create these companies that are distributed and have employees from around the world from day one yeah okay let's talk okay let's stop like let's stop um being so positive let's talk about negative stuff for a second what are some of the downsides that you see starting with Adrian about Hong Kong not downside but some of the challenges maybe right are the founders there good you invest a lot of Hong Kong Founders or what kind of challenges you see in Hong Kong going for in specifically web3 but I think in general uh we are Hong Kong has been a financial Hub uh we're at IFC so the talents that we have are better at in one sector so in terms of developers I think we are not the best cities among among all the major hubs but then we are for a lot of help from a greater Bay Area so we have Shenzhen we have guancho developers coming to Hong Kong so I think that is not really a downside actually connects me as much with the mainland China side another thing is probably a capital is too much in Hong Kong sometimes honestly for startups to raise money for funds to raise money even though it's a tough Market it's much easier raising Hong Kong versus Singapore it also makes some funders kind of confused what they should do in crypto you know in crypto you raise tons of money it doesn't mean that you could perform well with your company so I guess having the web tool mentors like you guys helping the web free startups is also very important important thing yep yep edif how about yourself downside I I can't think of any of any but but I guess seriously I I I have some web 3 Founders who moved to Singapore really no offense I really like Singapore but sometimes hiring is a really really big problem in Singapore because most people do and Singapore is an amazing amazing City but they're having a hard time like finding employee really want to work past 6 PM or on weekends they literally turn off their phone if you hire people from Hong Kong they work 24x7 yeah they work that's right Aaron knows that yes I know Ray Chan called you so so in that sense no I can't think of any well of course sometimes you hear the negative news on like political politics and WhatsApp whatsoever but this is the one time where the government you will not hear President Biden to say anything positive so therefore is complete opposite so I cannot think of anything bad yeah sorry all right all right that's fine I agree about like the talent thing because it's more competitive now like comparing to you know they can choose amounts Dubai or Hong Kong or Singapore these talents so how can we be more of a company that provides more for these people uh and and track them to the city and also we are remote so you can work basically anywhere so um but are you the key people are still in Hong Kong so are they still attracted to work for companies based in Hong Kong um that's the yeah okay so like I mentioned up top uh token 2049 used to be in Hong Kong so we're very sad that we've lost it to Singapore but to be honest I think we've all had a pretty good week here this venue is incredible the energy people from around the world because of the markets I guess are all coming here I mean before we'd have to fly I think I've seen Gary and Edith in America at conferences over there web 3 conferences now they're all those guys all those speakers are here this week uh what do you think about that I mean is that exciting to you guys to see the the roster of speakers here in Singapore and Asia they always call a lot of Americans just say Asia right like it's like America right like Singapore Hong Kong just in China just Asia but that's another story right but what do you guys what do you guys feel do you think that gets a good Spotlight in Asia in general not just Hong Kong or Singapore but having these kind of people come here let's start with Barry I I think it's great I think it's great that token is in Singapore I think it's great that Hong Kong has Hong Kong fintech week which this year is really going to be Hong Kong blockchain week that's really what it's turning into um and I love that Korea has Korea blockchain week I love that there is a density of events and Asia that are distinctly Asian right it is worthwhile for each of these places to have their own identities and it's worthwhile and it's great to see the speakers from around the world look for excuses to come to Asia to figure out what's happening the momentum is here when they come here they realize oh my goodness right there is an optimism there is a momentum there is a speed that exists in this part of the world that they no longer see in North America it just doesn't exist I built my entire career in North America and then I moved out here and I realized I was just like what why did I not come out here earlier in my career and that's why they sing so I absolutely love it I think that they're going to go back and they're going to tell those stories which is why the freaking roster at all of these conferences is so Stellar these are Global conferences now yeah yeah how about you Adrian well I I think we only reason to travel so it's very important I think I like token were you in Seoul last week no I wasn't my team was okay I like the whole Convention Center yeah uh you know we have 2049 this month we have uh we're hosting if Hong Kong in the first one uh in Hong Kong on 22nd of October and is if Vietnam end of October and the Hong Kong winter week in November I think it's the main thing is easy to travel among among cities in Asia it's so Dynamic and that's a very key difference actually from the U.S because traveling from one city from east to west in U.S it probably take more time for for us to travel a month free cities in Asia right so being Dynamic I love it and and uh I think token might be in Hong Kong soon we never know yes okay so Hong Kong fintech week is coming up in the first week of November there's a meme a meme Fest coming up meme land Festival yeah Dreamland and also ape Fest right yes and Solana Hacker House all happening at the same time so that'll be our week uh in in November for that um that's it guys we're out of time thanks a lot we'll see you guys in Hong Kong in November yeah