Summary of Zhao Changpeng CZ's speech at the University of Hong Kong 🇭🇰📝 Ready to go❗️

Changpeng Zhao (CZ) shared his forward-looking insights on the development of the Web3 industry during his speech in Hong Kong, covering the prospects and challenges of hot sectors such as stablecoins, RWA (Real World Asset Tokenization), decentralized exchanges, and the integration of AI and Web3. Below is a summary of his key points for your reference:

Topic	Core View	Key Insights
Stablecoins	A tool for dollar globalization and new instrument for currency internationalization	Evolved from a safe haven for trading to a strategic extension of the US dollar, presenting opportunities for emerging markets
RWA	Financial assets are easier to tokenize, while non-financial assets face implementation challenges	Faces three major challenges: liquidity, regulation, and product mechanisms; stocks and bonds are better choices
Exchange Development	DEX has huge potential and will complement CEX in the long term	DEX grows under privacy and regulatory advantages, but CEX remains the main entry point for users
AI and Web3 Integration	Infrastructure for billion-dollar micro-payment scenarios	Blockchain perfectly suits the high-frequency, micro-transaction needs between AI Agents
Recommendations for Hong Kong	Seize the window of opportunity, balance innovation and regulation	Share global liquidity, introduce flexible policies, and focus on stablecoins and RWA

📈 1. Stablecoins: The "New Tool" for Currency Internationalization

· Development and Nature: Stablecoins initially emerged as a "safe haven" and supplementary tool for the cryptocurrency market (e.g., USDT). Their business model is simple and highly profitable.
· Strategic Value: Changpeng Zhao pointed out that USD stablecoins (e.g., USDT) have become a powerful tool for dollar globalization. Over 90% of USDT's $100B+ market cap users are outside the US, and its underlying assets heavily invest in US Treasury bonds, reinforcing the dollar's global influence.
· Implications for Hong Kong and China: Stablecoins are an effective tool for currency internationalization. If Hong Kong can promote offshore RMB or HKD stablecoins, it could become a "Web3 new channel" for RMB internationalization. The challenge lies in balancing free circulation with foreign exchange controls.
· Comparison with CBDCs: Changpeng Zhao believes that compared to some government-led CBDCs, which may face low market acceptance due to strict regulations, stablecoins are more popular due to their high liquidity and user-friendly experience.

🧱 2. RWA (Real World Asset Tokenization): Opportunities and Challenges

· Implementation Challenges: RWA faces three major hurdles: liquidity issues, regulatory complexity, and product mechanism flaws. For example, non-financial assets (e.g., real estate) tokenization suffers from weak trading demand due to low price volatility, leading to liquidity shortages. Regulatory clarity is also needed on asset classification (security or commodity) and licensing.
· Feasible Path: Financially strong assets (e.g., stocks, bonds) are easier to tokenize due to their digital nature and frequent trading. Stablecoins are currently the most successful RWA application.
· Strategic Urgency: If the US pioneers tokenized stocks, it will further solidify its global financial dominance. Changpeng Zhao suggests that Asian exchanges like HKEX should actively participate in this transformation to avoid losing influence.

⚖️ 3. Exchange Development: The Complementary Future of DEX and CEX

· CEX (Centralized Exchanges): Remain the primary entry point for Web3 users due to their user-friendly experience (e.g., email registration, fiat on/off-ramps).
· DEX (Decentralized Exchanges): Excel in privacy and no-KYC requirements, benefiting from tightening regulations. However, they need to improve user experience (e.g., wallet operations, MEV attack prevention) and reduce fees.
· Future Trend: Changpeng Zhao predicts that DEX may surpass CEX in scale within 5-10 years. The essence of exchanges is to provide liquidity, and they should support free circulation of all asset classes in the future.

🤖 4. AI and Web3 Integration: A Billion-Dollar Micro-Payment Scenario

· Core Logic: Future AI Agents will generate massive, high-frequency, and micro-scale interactions and transactions (e.g., $0.01 per service). Traditional financial systems cannot handle such micro-payments. Blockchain enables near-instant, near-zero-fee transactions, perfectly meeting this demand.
· Scale Prediction: Changpeng Zhao estimates that AI-driven financial interactions could be 1,000x current levels, driving explosive growth in Web3 transaction volumes.
· Infrastructure Opportunity: If Hong Kong can proactively develop digital currency payment interfaces for AI and establish a micro-payment regulatory framework, it could become a global testing ground for "AI+Web3".

🌍 5. Recommendations and Outlook for Hong Kong

· Seize the Strategic Window: The current period is a golden opportunity for Hong Kong to develop Web3. The US is supportive, and the Hong Kong government is open-minded—this advantage should be fully utilized.
· Liquidity is Key: Changpeng Zhao advises Hong Kong to embrace global liquidity and avoid limiting itself to local markets. Attracting existing global exchanges (e.g., Binance) to operate compliantly in Hong Kong is more efficient than building from scratch.
· Regulatory Strategy: Policies should not wait for perfection. Products should be allowed to launch first, with regulatory frameworks iteratively improved in practice to avoid missing opportunities. Space should also be reserved for emerging areas like DEX.
· Long-Term Positioning: Hong Kong can leverage its financial foundation, policy flexibility, and proximity to mainland China to explore offshore RMB stablecoins and become a hub connecting traditional finance with Web3 innovation and global asset tokenization.

💎 Summary: Changpeng Zhao's speech painted a vision of global digital finance driven by Web3: stablecoins as the foundation, RWA (especially financial assets) as the next growth point, AI-Web3 integration creating a trillion-dollar micro-transaction era, and DEX representing the future of exchanges. He is optimistic about Hong Kong's Web3 development, emphasizing the need to balance order and innovation and seize the current strategic window.

Virtual Asset Trading Access: $GUOTAI JUNAN I(01788.HK), $Futu(FUTU.US), $FOSUN INTL(00656.HK), $CM BANK(03968.HK), $VICTORY SEC(08540.HK), etc.;
Stablecoin Issuers: Related to Round Dollar Technology ($ZA ONLINE(06060.HK), $GOFINTECH QUANT(00290.HK), $Z FIN(01168.HK), etc.), $JD-SW(09618.HK), $STANCHART(02888.HK), and state-owned enterprises;
Hong Kong Virtual Asset Exchanges (VATP Licensed): $OSL GROUP(00863.HK), $HKE HOLDINGS(01726.HK), $LIANLIAN(02598.HK), $Futu(FUTU.US), $PUXING ENERGY(00090.HK) (holding Hashkey);
Stablecoin Application Scenarios: $YEAHKA(09923.HK), $GOLDSTREAM INV(01328.HK), $LIANLIAN(02598.HK);
RWA Related: $CRYPTO FLOW(08198.HK), $SENSETIME-W(00020.HK), $ETHK LABS INC.(01931.HK), $PHANCY(06682.HK), $LINEKONG(08267.HK), $RUIFENG RENEW(00527.HK), $FOSUN INTL(00656.HK), $GOFINTECH QUANT(00290.HK), $SYNAGISTICS(02562.HK), $YUNFENG FIN(00376.HK), $DL HOLDINGS GP(01709.HK), $EASOU TECH(02550.HK), $VOBILE GROUP(03738.HK), $CMGE(00302.HK), $GCL TECH(03800.HK), $LINKLOGIS-W(09959.HK), $COOLPAD GROUP(02369.HK), $GREENLAND HK(00337.HK), $DMALL(02586.HK);
US-listed Stablecoin Issuers: $Circle(CRCL.US);
US-listed Trading Platforms and Ecosystem Partners: $Coinbase(COIN.US), $Robinhood(HOOD.US);
US-listed Traditional Financial Institutions in Stablecoins: $JPMorgan Chase(JPM.US), $Bank of America(BAC.US), $Interactive Brokers(IBKR.US), $Citigroup(C.US);
US-listed Innovative Tech and Infrastructure Firms: $Mega Matrix(MPU.US);
US-listed Payment and Fintech Companies: $Paypal(PYPL.US), $SoFi Tech(SOFI.US), $Visa(V.US).