Recently, the Cyberspace Administration of China (“CAC”) has issued regulations for the management of blockchain information services, the introduction of the supervision of virtual assets in Hong Kong, and the formal legislation of the Singapore "Payment Services Act". The author believes that the three regions have successively introduced relevant policies signals that the blockchain industry has entered a regulatory era.

What are the regulatory differences among the three regions?

First of all, let us look at the issuers of the three new policies: Mainland is the Internet regulatory authority, and Hong Kong and Singapore are the financial regulatory authorities. In my opinion, this difference is caused by their divergent understanding on the attributes of blockchain. For example, the financial regulatory authority in Mainland China has made it very clear that ICOs (initial coin offerings) and disguised ICOs were forbidden in Mainland China, so it was impossible to introduce a regulatory policy on an illegal act.

Secondly, look at the timing. The Securities and Futures Commission (SFC) was the earliest issuer, on 1 November, last year. The CAC issued a consultation draft in October last year. It was formally introduced in January this year and implemented in February. The Monetary Authority of Singapore (MAS) has also officially introduced in January this year. In fact, these regions started their research on blockchain as early as in 2014 and 2015. The author believe that the reason for the recent intensive supervision is not just a response to the chaos in the previous cryptocurrency industry, it is also an inevitable process in the implementing of supervision. 

Finally, look at the regulatory subjects. In Mainland, it is a blockchain tech-based information provider; and in HK, it is a digital asset trading agency and a fund investing in digital assets. The policy in Singapore covers the most areas (because it is an integration of previous policies), and it affects players in all aspects of the payment field. It includes not only companies that use blockchain technology, but also companies that use electronic payments, such as Alipay and WeChat, etc.

 What are the strength and weakness of Singapore and HK?

I am not a policy maker, but I speculate that the regions that have introduced policies must hope to regulate the industry, so that relevant enterprises can flourish in the jurisdiction, with more government revenue being generated, more jobs created and more contribution to national and regional economic development made. As two financial centers in Asia, Hong Kong and Singapore are endowed with unique geographical, cultural and resource advantages. They have become the first choice for Western projects to enter the Greater China market.

Comparing the two regions, their respective advantages are also obvious: Hong Kong relies on the Mainland and Northeast Asia, benefiting from the Guangdong-Hong Kong-Macau Greater Bay Area; while Singapore is closer to Southeast Asia and South Asia, backed by emerging economies such as Malaysia, Indonesia, the Philippines and India. Both governments are also aware of the mixed relation of competition and cooperation between each other and the blockchain industry is also a newly emerging thing, and therefore, with the controllable range, preferential policies such as sandboxes and exemption from supervision under certain payment limits to attract relevant companies to land locally.

Will blockchain companies still list Hong Kong stocks?

As we all know, the three major mining machine makers have been 

blocked from going to Hong Kong for IPO. Li Xiaojia, the president of the Hong Kong Stock Exchange, laterally responded in a interview in Davos before saying that such companies did not meet the core principles of the Hong Kong Stock Exchange's "listing adaptability." The author believes that most of the mining machine manufacturers' listing attempts have been unsuccessful.. As for Huobi and oKEx have successively bought shell resources from the listed companies in Hong Kong stock market, which can be interpreted as an inevitable stage of guiding capital inflows and expanding influence. We can expect that more and more blockchain public companies will appear. However, it is uncertain whether it will appear in Hong Kong, because the Hong Kong Securities Regulatory Commission is a conservative party in various regulatory agencies in various places. In most cases, they have to refer to models that have been successfully operated in other regions.

Can digital currency scrub the notoriety of money laundering?

If money laundering tools become the mainstream of digital currency application scenarios, we have the reason to believe that one day digital currency will be reset to zero. Because although the vision of Bitcoin founder，Satoshi Nakamoto，may be that the digital currency is under no government supervision, the 10-year-old digital currency industry actually tells us that the government will not disappear and regulation will always exist.

Indeed, the technology itself means no good or evil, and the application scenarios are still chosen by the person using the tool. We cannot exclude the fact that the speculative activities conducted by a few people have negatively impressed the digital currency, but I believe that as more and more people have correctly recognized the blockchain and digital currency, this impression will probably be changed.

What is direction of supervision in Mainland in the future?

In my view, China’s “one-size-fits-all” prohibition policy in the past few years has effectively avoided systemic financial risks, and the supervision over the blockchain was very timely and decisive during the irrational exuberance of the blockchain. Times shifts easily, and conditions are changed as well. At present, the total market value of global digital currency is just a little more than US$100 billion, and the daily trading volume is only US$5 billion. Even with the most optimistic estimates, digital currency addresses owners around the world are at the tens of million people level, and a considerable proportion of it come from Asia. It is also a fait accompli that many practitioners in Mainland China choose other countries and regions to develop their business in order to comply with regulations.

Some provinces and cities in Mainland have noticed the significance of the blockchain and written it into the government work report. In the future, they may look upon the blockchain with a more open attitude.