Investing in the crypto market carries inherent risks, even as the traditional banking system increasingly recognizes the significance of blockchain technology. Establishing a sandbox environment for this emerging industry to thrive and creating the necessary conditions for mass adoption of Web3 is crucial for its future growth and development.
At the BEYOND Expo 2023 tech conference held in Macao, Leo Li, the Web3 Ecosystem Development lead at Alibaba Cloud, and Zheng Bin, the deputy CEO of ICBC (Macao), discussed the development potential of Web3, and the role of the digital yuan in striking a balance between innovation and regulation.
Their comments have been edited and condensed for clarity.
Leo Li, Web3 Ecosystem Development Lead, Alibaba Cloud
Those of you who have a crypto wallet, please raise your hand. Okay, it appears to be around 5%. What does this indicate? It suggests that most people are not yet using crypto wallets, which serve as the basic entry point for Web3. But is the trend towards adoption inevitable? In my opinion, it is inevitable because Web3 offers an experience that maximizes personal value and profit. Its fundamental difference from Web2 is its emphasis on value. Web3 is a technology that aligns closely with our inherent human nature; therefore, I am very optimistic about its future.
Today, we all have a basic understanding of, or have used OpenAI’s ChatGPT. It does present barriers to entry, but the value it brings outweighs those barriers, motivating people to use it. In comparison, most people don’t have a crypto wallet and don’t use Web3 technology because it is not yet widespread.
Web3 is a robust and cutting-edge technology that can benefit the public, but in a framework that lacks regulation or compliance, various human desires can emerge, including the FTX fallout. The event occurred in an unregulated environment, and I don’t think it would occur in traditional banks.
The absence of regulation is the reason why we say that Web3 is fundamentally a decentralized technology. However, I think it still needs some form of regulation to inspire public confidence and achieve mass adoption.
Zheng Bin, Deputy CEO, ICBC (Macao)
I believe the use scenarios for the digital yuan can be divided into two main categories. For domestic use, the digital yuan may not bring significant changes to people’s daily experiences, but it does offer some advantages, such as legal tender status and mandatory acceptance by merchants in certain environments or scenarios. Merchants have no reason to refuse the digital yuan as it is a legal currency.
At the same time, establishing connections with foreign countries is of strategic significance. Many countries have their own frameworks for digital currency. The digital yuan’s ability to serve as a bridge between different digital currencies presents a valuable opportunity for the yuan to disrupt or shape the existing currency system that has evolved over many years. From a personal standpoint, this is a very good strategic opportunity.
How can we achieve a balance between innovation and regulation? The digital yuan as I just mentioned is a good example of striking such a balance. It leverages blockchain technology but does not rely entirely on it to establish its credibility. It ensures anonymity but can also be traced if regulatory authorities require it. It has integrated and resolved certain contradictions, resulting in the current outcome, and I think this may become one of the possible directions for the future development of the entire industry.