Hong Kong's 2025 Web3 Playbook: CZ on Liquidity, Stablecoins, and AI
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9-1Mia: We often think of cryptocurrencies as this separate, digital universe. But what if I told you that one of the most popular crypto tools, the stablecoin, is actually one of the most effective new weapons in the age-old game of global currency competition? You see, coins like USDT are quietly funneling over a hundred billion dollars into US treasuries, extending the dollar's influence into corners of the world traditional finance could never touch. And this sets the stage for a massive strategic question for places like Hong Kong: how do you compete when the very infrastructure of the new internet is being built on your rival's currency?
Mia: This is the challenge that Binance founder CZ recently laid out. He noted that for Hong Kong to truly succeed in Web3, it has to figure out how to carve out a space for its own currencies, like the offshore RMB or the Hong Kong dollar, against the dominance of USDT and USDC. You know, stablecoins didn't start as some grand geopolitical tool. They were just a user experience patch—a practical solution for traders who wanted to park their money during volatile market swings without cashing out entirely. But this simple utility evolved into an incredibly profitable business, a kind of hidden essential need. And for the US, it's become a tool for dollar hegemony. Think about it: over 90 percent of stablecoin users are outside the United States, yet their money is overwhelmingly invested in US Treasuries.
Mia: So, the evolution of stablecoins from a simple crypto-market utility to a global financial instrument really highlights their power as a Web3 channel for currency internationalization. This presents a huge opportunity for China. If Hong Kong can successfully launch and promote stablecoins backed by the offshore RMB or the Hong Kong dollar, it could create a vital new pathway for the global adoption of the Chinese currency. Of course, this means walking a tightrope. They'll have to figure out how to reconcile the borderless nature of blockchain with traditional foreign exchange controls, maybe through some kind of compliant, directed circulation framework.
Mia: But leveraging this potential requires Hong Kong to solve some big challenges, especially around regulation and market liquidity, when you compare it to the very proactive moves being made in the United States.
Mia: This brings us to the next big growth area for Web3: Real-World Assets, or RWAs. There’s a lot of hype around the idea of tokenizing everything, from real estate to fine art. But as CZ pointed out, the reality is far more difficult. He suggests that only assets that are already highly liquid, mostly financial assets, are actually viable for tokenization right now. Why? Well, non-financial assets like a building or a painting just don't have enough trading demand. Even if the price changes, people aren't buying and selling it every second. This creates a vicious cycle where low liquidity leads to even less trading. It's a death spiral. In contrast, financial assets like stocks and bonds are already highly digitized and traded constantly, which makes them a much better fit for a blockchain ledger.
Mia: The key difference here, the real dividing line, is the asset's inherent liquidity. And for Hong Kong, the opportunity is massive. It can leverage the power and flexibility of the Hong Kong Stock Exchange. If the HKEX takes the lead in asset tokenization, it could become the Asian RWA hub, attracting capital from all over the world. But this requires a clear regulatory framework that knows how to differentiate between a security and a commodity, and that streamlines the licensing process. It's about capitalizing on this global shift to digital assets, especially while the US is still figuring out its own regulatory approach.
Mia: Beyond just tokenizing assets, the future of Web3 really depends on having strong places to trade them. This leads to the crucial question of how Hong Kong can cultivate its own world-class exchanges.
Mia: To be a real Web3 hub, you need top-tier exchanges, and the single most important factor for an exchange is liquidity. CZ explained this really clearly. Forcing a global exchange to build a completely separate, localized system just for Hong Kong would be incredibly expensive. We're talking billions in new infrastructure, security, and talent. It’s like building an entire exchange from scratch. And even if they did, a small market like Hong Kong, if it's walled off to only serve local users, would suffer from terrible liquidity. That means prices would be volatile, and making large trades would be almost impossible. The reason big global exchanges work is because they have millions of users, creating a deep pool of liquidity that protects everyone from wild price swings.
Mia: So, the fundamental challenge for Hong Kong is to avoid this liquidity death trap. The answer isn't to build from scratch. It's to attract existing global exchanges to operate compliantly within the city. This would allow them to tap into their massive global liquidity pools, which immediately boosts Hong Kong's status as a Web3 trading node without the huge local cost. Hong Kong has already shown it can be flexible and move fast with its digital asset laws and constant communication with the industry. Now it needs to leverage that advantage by relaxing product restrictions and attracting more projects.
Mia: But while centralizing liquidity is key for today's exchanges, the rise of decentralized alternatives is creating a whole new dynamic in the trading world.
Mia: With the fast growth of Decentralized Exchanges, or DEXs, like Uniswap, a lot of people are wondering if they're going to make Centralized Exchanges, or CEXs, obsolete. But CZ argues that this isn't a battle to the death. Instead, CEXs and DEXs form a complementary ecosystem. They just serve different needs. CEXs are the perfect on-ramp for newcomers to Web3. They offer familiar things like easy registration, customer support, and ways to get your regular money in and out. DEXs, on the other hand, have a steeper learning curve. You need to manage your own wallet and understand a more complex interface. Right now, DEXs are also benefiting from stricter KYC rules on centralized platforms, which pushes users who want more anonymity toward them.
Mia: The future of exchanges is really a symbiotic relationship. CEXs will continue to be the main gateway for mainstream users, while DEXs will cater to those who prioritize privacy and self-custody. And as more people get comfortable with managing their own wallets and the technology improves, DEXs are actually projected to surpass CEXs in scale within the next five to ten years. This means Hong Kong needs to be thinking about how to regulate DEXs right now, finding a balance that protects users but doesn't kill innovation. It can't afford to miss the boat on this part of the ecosystem.
Mia: And looking beyond the dynamics of exchanges, the convergence of Web3 and Artificial Intelligence is about to unlock entirely new economic models.
Mia: CZ sees the integration of Web3 and AI not just as hype, but as the spark for a new economic form that could generate trillions of dollars in value. The core logic is actually quite simple. As AI, especially autonomous AI Agents, becomes more common, they will need to pay each other for services and data. These will be high-frequency, extremely low-value payments—think fractions of a cent. Traditional finance, with its fees and slow settlement times, simply can't handle this. But Web3's digital currencies, with their near-instant, low-fee transactions on the blockchain, are perfectly built for this kind of micro-transaction economy. This synergy is expected to drive a thousand-fold increase in Web3 transaction volume.
Mia: The critical piece to making this AI-driven economy a reality is building the right infrastructure. This means creating payment interfaces specifically for AI agents and establishing compliant legal frameworks for these tiny transactions. Here lies another major opportunity for Hong Kong. It could position itself as the global testbed for AI + Web3 by encouraging AI companies to use local stablecoins and by simplifying the rules around micro-transactions. This kind of proactive approach could give Hong Kong a decisive lead in this incredible technological convergence.
Mia: So, to wrap things up, here are the key points to remember.
Mia: First, stablecoins are becoming critical infrastructure for currency internationalization. This is a huge opportunity for Hong Kong to promote the RMB and HKD on a global stage.
Mia: Second, the success of tokenizing real-world assets all comes down to liquidity. This gives a natural advantage to financial assets, and Hong Kong can lead the way by leveraging its powerful stock exchange.
Mia: Third, for Hong Kong to have world-class exchanges, it needs to focus on global liquidity. The best strategy is to attract existing major exchanges, not try to build new ones from the ground up.
Mia: Fourth, centralized and decentralized exchanges will coexist. DEXs are poised for massive growth, and Hong Kong needs to create forward-thinking regulations to prepare for that.
Mia: And finally, the convergence of Web3 and AI is set to create enormous new economic opportunities driven by micro-transactions, which will demand entirely new infrastructure and regulatory thinking.