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Startup Web3, chat every Wednesday!
"Startup Web3.0" is an interview program for Chinese Web3.0 entrepreneurs initiated by Mankiw LLP. Every Wednesday night, we will invite industry leaders, first-line institutions, well-known entrepreneurs, etc. to share their views. We hope to promote the compliance development of China's Web3.0 industry through positive voices, rational discussions, and experience sharing.
Web3 is booming. How can Hong Kong become a global virtual asset center with its policy and technological advantages? How can traditional enterprises embrace Web3 through RWA and cross-border payments? In this issue of "Startup Web3.0", Niu Xiaojing, a lawyer at Manquin Law Firm, talks with Vivian, the marketing director of BlockbeatHK. From the vision of the value Internet to BlockbeatHK's practice in Hong Kong, Vivian, with 7 years of industry experience, reveals how Web3 empowers the real economy and brings entrepreneurs exclusive insights into technology and compliance!
(The audio transcription has been processed by AI and may contain omissions and errors.)
Welcome this episode’s guest, please introduce yourself to everyone!
Vivian: Thank you very much for the invitation from Mankiw Law Firm! Dear audience friends, I am Vivian from BlockbeatHK. In early 2018, I entered the blockchain industry. Before that, I worked in multinational companies such as Siemens and IBM, and later worked in a domestic listed company that developed core credit systems for banks. After entering the blockchain industry, I started in a technology service company, and then joined a trading platform that obtained a VATP license under sandbox supervision as a business director.
In 2021, I joined BlockbeatHK and worked with Harrit, the founder and CEO. She is a female entrepreneur whom I admire very much and we have known each other for many years. After I joined, I hope to use decentralized technology with the team to build an interconnected value Internet.
BlockbeatHK is the full name of Hong Kong Block Yidong Technology Co., Ltd., referred to as BlockbeatHK, which is a Web3 comprehensive solution service provider based in Hong Kong and serving the world. Our core team has been involved in the world-renowned cross-chain project Cosmos since 2017. We are the core contributors to its ecology and IBC cross-chain communication protocol, and are also the builders of multiple national and global blockchain infrastructures. The business is divided into several parts:
1. Provide strategic technical support for virtual asset services to licensed financial institutions (such as banks and trading platforms).
2. Provide technical support such as underlying chain, protocol layer, wallet, node service, etc. for mainstream public chain communities such as Cosmos, EVM, Solana, etc.
3. Provide RWA integrated solutions, serve the real economy, and promote efficient circulation of global assets.
4. Create platform products, such as multi-chain API service platform Avatar, Web3 payment product Spark Pay, cross-chain browser IOB Scan, and digital marketing platform.
5. Relying on the Hong Kong Trust Service License, we provide compliant virtual asset custody and trust services.
I am the Marketing Director, responsible for brand building, promotion, customer development and partnership maintenance. I hope to talk to you about the practice of BlockbeatHK today!
Q1: How is BlockbeatHK positioned? What keywords summarize its core value?
Niu Xiaojing: BlockbeatHK covers the mainstream tracks of Web3, from licensed institutions to public chains, wallets, and custody. It is very strong! Can you summarize the company's positioning and core values?
Vivian: Thank you, Lawyer Niu! We are positioned as a Web3 comprehensive solution service provider based in Hong Kong and serving the world. The core values can be summarized in three words: technology-driven, compliance innovation, and global interconnection. We empower enterprises through blockchain technology, build a value Internet, and serve the real economy. Whether it is the encryption capability construction of licensed institutions, the technical support of the public chain ecosystem, or RWA and payment solutions, we focus on technology, pay attention to compliance, and ensure the interconnection of the global market.
Q2: Compared with Web2, what is the significance of Web3’s value internet to enterprises and users?
Vivian: The value internet uses decentralized technology to achieve the transfer, exchange and storage of value. It is different from the centralized database of Web2.0 and is often regarded as a synonym for Web3.0. It brings several major values to enterprises and users:
1. Transparency and Trust: Distributed ledger technology provides high transparency and trust, and smart contracts enable efficient collaboration and automated execution.
2. User control: Users have absolute control over their data and assets, and decentralized identity (DID) and economic incentive systems give them more autonomy.
3. Efficient collaboration: Blockchain makes digital asset transactions safer, more transparent, and traceable, and smart contracts improve circulation efficiency.
We are gradually transforming from Web1.0 (read-only, users passively accept content) to Web2.0 (users create and share content), and then to Web3.0 (decentralization and openness). BlockbeatHK has been deeply involved in blockchain since 2016, participating in the development of Cosmos and IBC cross-chain protocols, and has accumulated cross-chain interoperability, NFT, privacy computing and other capabilities.
For example, cross-chain technology allows assets to flow between different chains, NFT supports complex data such as digital art, copyright, and virtual props on the chain, and privacy computing enables data sharing while protecting privacy. These technologies have promoted the formation of the value Internet, enhanced the control of digital assets of enterprises and users, and promoted the economic prosperity of creators.
Niu Xiaojing: From Web1 to Web3.0, the transparency and user control of the value Internet are indeed disruptive changes.
Q3: How do traditional enterprises transform to Web3? What are the challenges?
Niu Xiaojing: At Mankiw Law Firm, we often encounter traditional companies that want to embrace Web3. Has BlockbeatHK ever served non-Web3 native companies? What are the challenges for traditional companies to transform to Web3?
Vivian: Most of the B-side clients we serve are not Web3 native companies, but traditional or Internet companies, covering digital art, copyright, membership management, tickets, cross-border payments, RWA, supply chain finance and other fields. The challenges of transforming to Web3 include:
1. Policy differences: Crypto regulation varies from country to country, and policy stability is insufficient. Enterprises need to adapt to compliance requirements in multiple places.
2. Security concerns: Enterprises are worried about blockchain systems being attacked and have doubts about the security of the technology.
3. Public acceptance: The acceptance of virtual assets varies from region to region, affecting their promotion.
4. Team awareness: Enterprises have limited understanding of blockchain and require training or external support.
Technology is not the biggest obstacle. We have encapsulated mature solutions based on years of experience. For example, the Avatar API platform and Spark Pay payment tools allow teams without blockchain foundation to quickly access. The RWA solution combines the needs of the real economy and provides data on-chain and compliance support.
We work with law firms such as Mankiw to ensure compliance with local regulations and help companies transition smoothly.
Niu Xiaojing: It turns out that technology is not the main threshold, policies and cognition are more critical.
Q4: What are BlockbeatHK’s core products? What are the features of Spark Pay?
Vivian: Let me first introduce our products in general, and then focus on Spark Pay. Our products cover underlying chain development, cross-chain services, and application layer tools, mainly including:
1. Avatar: A multi-chain API service platform that supports enterprises to access public chains such as Cosmos, EVM, Solana with one click, provides NFT management, cross-chain services, smart contract management, node services, etc., and has served 43,400+ enterprises.
2. W3 Box: A multi-chain-based digital marketing tool that provides blockchain services for brands and private domain traffic management, such as providing marketing activities for Swiss skincare brand La Prairie.
3. IOB Scan: A cross-chain browser that provides unified accounts, multi-chain asset queries and information tracking for blockchains using the IBC protocol, with a user-friendly interface.
4. Trust services: Relying on the Hong Kong trust license, we provide compliant virtual asset custody based on multi-party secure computing, hardware encryption machines and smart contracts.
5. Public chain support: Provide full-stack services such as demand analysis, architecture design, underlying chain development, and wallet deployment for licensed institutions and public chain ecosystems.
Let’s focus on Spark Pay, a Web3 cross-border payment solution, an enterprise-level payment tool based on abstract accounts (ERC-4337), zero-knowledge proof, and privacy computing. It is also a crypto wallet that serves Hong Kong and the global market (excluding FATF blacklist countries and specific regions such as mainland China and the United States). Features include:
1. Decentralized security: Merchants manage their assets independently without the need to entrust them to BlockbeatHK. Supports social password login and email recovery, and is compatible with mainstream wallets such as Coinbase, Binance, and OKX.
2. Fast and low-cost: Based on blockchain, the payment is received in T+0 seconds, and the fee rate is only a few thousandths (lower than the 1%-5% of traditional payment). The merchant pays the fee, but the user pays at no charge.
3. API integration: Through API documentation, merchants can integrate into APP or H5, support mainstream networks and currencies, and provide reconciliation, reporting, and intelligent analysis.
4. On-chain account splitting: Smart contracts automatically split accounts, and e-commerce or trading platforms can distribute profits in proportion.
5. Diverse scenarios: Version 2.0 supports online payment, POS payment (offline collection), bill payment, QR code scanning, covering e-commerce, physical stores, creator subscriptions, salary distribution, etc.
For example, physical stores in Hong Kong have implemented POS payment, and consumers can scan QR codes to pay with cryptocurrencies, eliminating the hassle of currency exchange and is safe and efficient.
Niu Xiaojing: The scenario of Spark Pay is exciting. Scanning the code to pay for cryptocurrency in physical stores is a new global payment method.
Q5: How does Spark Pay balance convenience and security?
Vivian: There is indeed a contradiction between convenience and security. Spark Pay manages assets through private keys at the bottom layer to ensure security, but using social passwords to log in and email recovery is close to the habits of Web2 users. The specific measures are:
1. Multi-factor authentication: Social passwords are only used for account login, and transfers require private key pairing, combined with multi-party security verification.
2. Technical packaging: Merchants do not need to manage private keys or Gas Tokens, the system automatically handles it, reducing the risk of misoperation.
3. Compliance support: Based on ERC-4337 and privacy computing, it complies with Hong Kong regulatory requirements.
Merchants use a login method more like a Web2 account, but the underlying security is not compromised. Interested merchants can contact us for technical details.
Q6: How is BlockbeatHK's RWA solution implemented? What are some examples?
Vivian: RWA is a bridge between the digital and physical worlds. BlockbeatHK provides a one-stop RWA solution based on blockchain, serving Hong Kong and the global market. Its clients include commodity managers and new energy facility operators (such as photovoltaic power stations, power batteries, and energy storage). The solution is divided into two ends:
1. Asset management system: Integrate data such as power generation, revenue, and equipment, and upload them to the national blockchain infrastructure to ensure authenticity and security. Support cross-verification with IoT devices, provide a visual dashboard, and enhance operational transparency and investor confidence.
2. Tokenized issuance and management: One-click issuance of tokens based on underlying assets (such as private equity, debt), supporting EVM chains (such as HashKey Chain). Provides permission management, investors can view positions, income, expiration dates, etc., mostly fixed-income products, easy to understand and calculate.
The implementation requires the collaboration of multiple parties, including domestic/Hong Kong law firms (Mankiw, etc.), accounting firms, tax companies, and asset rating agencies. If issued in the form of a tokenized fund, a Hong Kong No. 9 fund company, a custodian bank, and a No. 1 underwriting agency are required; if issued in the form of bonds, a trust company and an underwriting agency are required. Cross-border financing of domestic assets must be reported to the State Administration of Foreign Exchange, the National Development and Reform Commission, or local governments, and the Hong Kong side must comply with the requirements of the China Securities Regulatory Commission.
For example, we provide data on-chain and token issuance services for photovoltaic power stations. Data transparency enhances investor trust, and fixed income design facilitates brokerage management. The advantages of RWA are data confirmation, low subscription threshold, and 7×24-hour fast settlement. It is expected to achieve compliant transactions in the secondary market in the future.
Niu Xiaojing: Uploading data to the chain and multi-party collaboration are the key, and the implementation cases are eye-opening.
Q7: What is the current situation and challenges of RWA?
Vivian : RWA has developed rapidly since 2023, with cases such as Ant's cross-border financing and Hong Kong battery swap stations being implemented. Asset types have expanded from financial assets to income rights, physical assets, and intangible assets. Traditional institutions are actively participating, and the market outlook is optimistic. Challenges include:
1. Complex supervision : Cross-border financing needs to meet the supervision of multiple countries, and Hong Kong emphasizes "same assets, same supervision".
2. Due diligence costs : The complexity of assets increases brokerage, law firm, and audit fees, starting at millions.
3. Investor threshold : Except for China Asset Management (which is for retail investors), most RWAs are for qualified investors (Hong Kong standard: HK$8 million in financial assets or HK$40 million in fixed assets).
4. Secondary market restrictions : Compliance trading platforms do not yet support RWA secondary trading, and liquidity needs to be improved.
We reduce costs by uploading data to the blockchain and using smart contracts, work with Mankiw and licensed institutions to ensure compliance, customize plans based on the scale of financing, and negotiate installment payments to reduce the burden on businesses.
Q8: What is the difference between RWA and ICO? What is the issuance cost?
Vivian: There is an essential difference between RWA and ICO. ICO is a crowdfunding model in 2017-18. The project party issues tokens based on the white paper, facing the public, maintaining network stability or as gas fees. It is easy to involve illegal fundraising. It has been banned in China and is strictly regulated in Hong Kong. RWA is anchored to real assets (such as income rights and debt rights), issued through compliance processes, facing qualified investors, requiring legal documents, asset audits, and regulatory filings. The transaction structure is complex, and the tokens are mostly securities attributes and are regulated by the China Securities Regulatory Commission.
The issuance cost is related to the financing scale and asset complexity, starting from millions, including due diligence by law firms, brokerage commissions, audit fees, and technical service fees. The larger the financing scale, the more reasonable the cost ratio, and payment can be negotiated in installments. Brokerage promotion fees vary by investor group, and large financing (100 million to hundreds of millions of dollars) is more attractive.
Q9: In addition to new energy, which industries are suitable for RWA? Can individuals issue it?
Vivian: The Hong Kong Regulatory Authority listed four asset categories suitable for RWA in 2023: fixed income, liquidity agreements, green finance, and supply chain finance. Most of the actual cases are new energy (photovoltaic power stations, energy storage) and park income rights, because the data can be uploaded to the chain and the income is stable. Other fields (such as digital art and copyright) can also be explored. The RWA framework is flexible and requires transparent data and compliance support.
Individual issuance is theoretically feasible, but it requires a large asset scale, a stable operating model and sufficient funds. The process is as complicated as that of an enterprise, and the cost is high. It is suitable for listed companies or large institutions. Enterprises that build their own public chains to issue RWA tokens to individuals need to be approved by Hong Kong regulators, otherwise they will be suspected of illegal ICO.
Niu Xiaojing: Compliance and scale are hard thresholds.
Q10: What support and challenges does Hong Kong’s virtual asset regulation bring to Web3 companies?
Vivian: Since Hong Kong issued the Virtual Asset Development Policy Declaration in October 2022, it has established a complete regulatory system:
1. 10 VATP licenses were issued, and HashKey Exchange is now available to retail users.
2. In 2024, the virtual asset ETF, regulatory sandbox (covering four major categories including fixed income and green finance), and stablecoin regulations will be launched.
3. A roadmap centered on “access, security, products, infrastructure, and connection” will be released in February 2025, and a pledge business guide will be released in April.
support:
As a trade center and financial hub, Hong Kong has huge offshore funds, a mature financial system and clear regulatory policies.
Attract financial technology talents from the mainland and around the world and strengthen the innovation ecosystem.
The "same assets, same supervision" principle enhances investor trust and attracts "old money" to enter the market.
challenge:
Compliance costs are high, and companies need to have an in-depth understanding of regulations and regularly track policy changes.
Geopolitics and global economic divisions (such as the Sino-US trade war) affect the layout of globalization.
BlockbeatHK benefits from Hong Kong's open policy and strictly follows data protection, anti-money laundering, and customer due diligence requirements, and communicates with regulators and Mankiw to ensure compliance. This enhances our competitiveness in the international market and provides trust and assurance for our customers.
Niu Xiaojing: Hong Kong's regulatory system is both strict and forward-looking, with both opportunities and challenges.
Q11: Finally, please share a subjective insight!
Niu Xiaojing: Finally, please ask Vivian to share a subjective insight, which can be about Web3 or life. The more subjective the better!
Vivian: The combination of AI and blockchain will profoundly change human production and life. AI has been integrated into daily life, but the impact of blockchain on centralized systems has not yet fully emerged. As a practitioner, I firmly believe that the combination and checks and balances of decentralization and centralization will reshape production relations and bring about a more efficient way of collaboration.
Web3 and AI are two major trends in the future. Embracing them means walking on the road to the future!
Niu Xiaojing: The combination of AI and blockchain covers two major hot topics in the future. Web3 practitioners are indeed on the road to the future!
Starting a business is not easy, but your story must be cool!
Welcome to join Mankiw’s “Entrepreneurship Web3 Column” to inject real and fresh power into China’s Web3.
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Author: Mankiw Blockchain
