Blockchain as the Foundation for a New Financial Era

The Hong Kong Web3 Festival 2025 kicked off with a keynote address by Xiao Feng, President and CEO of Hashkey Group, who positioned blockchain technology as a revolutionary force in reshaping global financial infrastructure.Speaking at the Hong Kong Convention and Exhibition Center, Xiao emphasized blockchain’s capacity to redefine how financial transactions are recorded, settled, and governed.

The Symbiotic Relationship Between Industrial and Financial Revolutions

Xiao drew parallels between past technological advancements and corresponding financial innovations, stating, Any industrial revolution must expect a financial revolution. He noted how bank credit fueled the British Industrial Revolution, stock markets propelled the American electrical revolution, and venture capital drove the data revolution in Silicon Valley. He argued that blockchain-based finance is poised to support the next wave of industrial progress.

Financing with cryptocurrencies will become the central financial innovation that will support the fourth industrial revolution.

This viewpoint aligns with the growing recognition of decentralized finance (DeFi) as a potential catalyst for economic growth. As of early 2025, the DeFi market has seen significant growth, with total value locked (TVL) reaching over $100 billion, demonstrating increasing investor confidence and adoption.

Key Differences: Conventional Finance vs. Blockchain-Based systems

Xiao highlighted the basic distinctions between traditional financial systems and those built on blockchain. These include the shift from traditional bank accounts to digital wallets and the transition from batch processing to near-instantaneous transaction settlements. These changes promise greater efficiency and accessibility in financial services.

Regulatory Developments and Institutional Adoption

Xiao also underscored the importance of the U.S. Securities and Exchange Commission’s (SEC) decision not to classify dollar-backed stablecoins as securities. He suggested that this regulatory clarity could encourage greater institutional participation in monetary creation processes, potentially unlocking new avenues for innovation and investment in the blockchain space.

The Evolving Landscape of Trading: 24/7 markets

He further noted the trend of traditional stock exchanges moving towards extended trading hours,approaching 23-hour cycles. This shift, he argued, is a response to the continuous, 24/7 operation of blockchain markets. Traditional exchanges will eventually need to adapt to compete with cryptocurrency markets that have operated 24/7 from day one, Xiao predicted.

Hong Kong’s Strategic Position in the Blockchain Ecosystem

the Web3 Festival attracted a number of high-profile regulators, including Paul Chan Mo-Po, Hong Kong’s Financial Secretary. While mainland China maintains a strict stance against cryptocurrencies, Hong Kong’s supportive approach is viewed by analysts as a strategic move to explore the potential of blockchain technology.

This creates a controlled regulatory environment where blockchain innovations can be nurtured, potentially informing future policy decisions within the broader Chinese economy. This “sandbox” approach allows for experimentation and growth without disrupting the established financial order.

Looking Ahead: Networking and Innovation at Web3 Festival

The Web3 Festival continues through Wednesday, featuring industry panels, demonstrations, and networking events. The event brings together blockchain developers, investors, and technology enthusiasts from around the globe, fostering collaboration and driving innovation in the blockchain ecosystem.