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This is a golden opportunity for Web3. It is also the most exciting time

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"From a historical perspective, Web3 will experience a rocky period and then grow rapidly again."

今日上午，香港特别行政区政府财政司司长陈茂波在「2023 香港 Web3 嘉年华」主会场上发表开幕演讲。演讲中，陈茂波先生从 Web3 的兴起谈到当前的发展与机遇，直言「现在是 Web3 发展的黄金机遇，同时也是最惊心动魄的时刻。」

The following is the full text of the speech:

Good morning! It is my great pleasure to attend the opening ceremony of 2023 Web3 Carnival in Hong Kong. The four-day event brings together Web3 technology leaders, academics, and industry leaders from around the world, and it's great to know that more than 10,000 people have already signed up. I would like to begin by expressing my warm congratulations on the success of the Carnival. I also wish the four-day event a complete success. All of you who have come from afar have had a pleasant and fruitful journey in Hong Kong over the past few days.

The rise of Web3

When it comes to Web3, opinions are divided. I think we should look at it from the historical perspective of technological change. Technological change has always led to innovation in business operations, and business practices in turn drive more technological change. This cycle is often the driving force of economic development.

Computers and the Internet were one of those transformative forces, with the founding of Microsoft and Apple in the 1970s making computers a widely used tool. At a time when the computing power and capacity of computers are increasing, the popularity of optical fiber as the backbone of communication networks is also increasing. The combination of these two factors is actively driving the trend of Internet development and creating huge business opportunities.

Taking advantage of the rapid development of technology, the Internet has shifted from being a communication channel for specific organizations to Web1.0, which has created a number of enterprises based on the aggregation and distribution of information. Over the past 20 years or so, the Internet has evolved into Web2.0, a combination of social interaction and the proliferation of mobile devices that has created a new generation of giant companies. However, Web2.0 belongs to the centralized Internet, where users' data and information are collected and controlled by large Internet platform companies. They have the advantage of data and information, and thus a lot of advertising revenue and economic benefits.

With the rise of blockchain technology, many people believe that the Internet has entered the Web3 era. The immediacy, transparency, efficiency, disintermediation and de-platformization of blockchain technology break the original situation that data and information are mastered by specific Internet platforms, and data will be jointly owned by builders and users, making the Internet "decentralized". Of course, Web3 is in its infancy. Common applications today include cryptocurrencies, decentralized trading platforms, digital authentication, decentralized financial services (DeFi), blockchain gaming, and even NFT, but you can imagine that there will be many new applications and opportunities in the future.

In fact, the rise of Web3 has many people sharpening their fists and looking for new opportunities; But at the same time, many people are playing it safe and worried that the future is out of their control. In my opinion, whether at the macro level or at the level of individual enterprises, the key to the real success of Web3 is to better serve the needs of the real economy and the market, solve long-standing pain points and difficulties with innovative technologies, modes and applications, improve efficiency, create better experience, and create new values and new modes. This can be an improvement on what's already there, or it can be a "disruptive creation."

Challenges and opportunities

So where does Web3 go from here? I'm going to go out on a limb and say that this is a golden opportunity for Web3, but it's also the most exciting time.

It is thrilling, because looking back in history, every spring tide appears at the beginning, is bound to experience the baptism of shock. The explosion of the Internet in 2000, the virtual currency in recent years, and even the recent collapse of the virtual asset trading platform, involving some banks whose main clients are start-ups, also brought shocks to the market. Therefore, we should be calm and cautious about the development of Web3.

After the shock, the remaining market participants will be stronger and investors will be relatively calmer. Market forces will encourage enterprises, technologies and applications to develop new capabilities and models, so that strong companies can survive the market take-off stage. On the other hand, governments and regulators generally learn from experience and formulate appropriate strategies to plug loopholes and manage risks after shocks, so that the market can continue to develop steadily.

Historically, Web3 has experienced a bumpy period of growth before growing rapidly again. Recent events have shown us that the problem with virtual currencies, virtual assets and trading platforms is not the lack of innovative forces, but whether they effectively manage risks under a proper regulatory framework.

To promote the development of Web3, the premise is not to undermine the stability of the financial system and investor protection. In this regard, all of you are concerned about Web3, and I believe you have learned from the recent events that proper regulation is necessary to create a "sustainable development" environment, so that everyone has a better space for development.

In this context, Hong Kong has actively embraced the development of Web3. As a starting point, we issued the Policy Declaration on the Development of Virtual Assets in Hong Kong last October. In short, we will promote the sustainable and responsible development of the virtual asset market, under the "same business, same risk, same rules" regulatory thinking, to maximize the innovation and development of virtual assets. In the past six months since the Declaration was published, many of our Web3 friends have paid close attention to the development of Hong Kong in this regard, and many of them have settled in Hong Kong. Some after a period of observation, finally decided to come to Hong Kong.

In this year's Budget, I set out three directions from the perspective of "quality development", including the digital economy, the development of Web3, and the positioning of the global green technology and financial centre. On the development of Web3, I will set up a Virtual Asset Development Task Force to work with industry representatives to make recommendations to the Government on sustainable and responsible development of the industry. I have also allocated $50 million to Cyberport to accelerate the development of its Web3 base.

summarize

Distinguished guests, dear friends, the road of innovation and change is never smooth. It can be expected that the development of Web3 still has a long way to go. Nevertheless, after analyzing the situation and summarizing the development experience of other places, we believe that Web3 can bring great benefits to the market and solve the pain points for the market and society, which is also an irreversible future trend.

The SAR government is looking forward to the development of Web3 in Hong Kong. I hope that by focusing on the core elements of "prudent progress" and "pain point resolution", we will work together to build a vibrant Web3 ecosystem in Hong Kong and lead more technological breakthroughs, model innovations and application innovations. I am confident that there will be great opportunities for you to use Hong Kong as a base and expand our footprint into the ASEAN market, the Asia Pacific market and the world.

I look forward to more in-depth discussions on different topics, such as how to use blockchain technology to promote the better development of green technology and green finance, and how to help traditional enterprises with new technologies to improve operating efficiency. I hope your insights will lead the way for Web3 innovation.

Finally, I wish the carnival a complete success once again! Distinguished guests and friends, good health, happy work and prosperous career. Thank you!