"The significance of compliance lies not only in adhering to regulations but also in establishing an industry ecosystem capable of long-term development."

Interview & Article: Anderson Sima, Executive Editor of Foresight News

As the world accelerates its embrace of blockchain and virtual currencies, Hong Kong is gradually becoming a testing ground for virtual assets in China. During this year's Hong Kong FinTech Week, several officials from the Special Administrative Region government, including Financial Secretary Paul Chan, expressed strong confidence in the development of virtual assets in Hong Kong.

In observing the development of virtual assets in Hong Kong, the OSL trading platform is a microcosm of its compliance process. As the first virtual currency trading platform in Hong Kong to receive regulatory approval, OSL (HK: 863, formerly BC Technology) was the first to obtain a VASP license in Hong Kong and has also received over HKD 500 million in investment from Singapore's national sovereign fund GIC.

In November 2023, OSL welcomed new shareholders, leading to changes in capital and strategy. Subsequently, OSL began to focus on its core virtual asset business centered on "compliance," while also introducing "real-world assets (RWA)" into the blockchain ecosystem—this includes on-chain innovative trading of traditional financial products such as green bonds and money market funds.

According to OSL's recently released latest financial report, its losses in the first half of the 2024 fiscal year decreased by over 90% year-on-year to HKD 9.6 million; as of the time of writing, OSL's stock price was approximately HKD 7.09, with a 24-hour increase of 2.16%.

During Hong Kong FinTech Week, Foresight News interviewed OSL's newly appointed Chief Institutional Business Officer, Zhang Yinghua, who has many years of experience in traditional finance, having held leadership positions at Tradeweb and led initiatives such as Bond Connect, as well as helping the Chicago Mercantile Exchange (CME Group) expand its business in China. Before joining OSL, he served as Vice President and Head of Institutional Business at another cryptocurrency exchange, Bybit.

OSL Chief Institutional Business Officer Zhang Yinghua Source: OSL

Below is the full content, with some omissions.

Foresight News: Can you briefly introduce your professional background?

Zhang Yinghua: I have been in the traditional finance industry for a long time, starting at the Chicago Mercantile Exchange (CME) for nearly ten years, then participating in projects like Bond Connect, mainly responsible for financial products in the mainland and Hong Kong markets. Over the years, I have been paying attention to the crypto industry, and in 2021, I joined Bybit to build the institutional business. Now at OSL, I am promoting the development of compliant virtual currency trading because I see the potential in this field. A compliant virtual asset trading platform, especially one that can connect with traditional financial institutions like banks, brokerages, and asset management firms, is a development direction I am very optimistic about.

Foresight News: What are your initial impressions of transitioning from traditional finance to the emerging crypto asset industry, especially in charge of institutional business?

Zhang Yinghua: It was indeed a bit uncomfortable when I first transitioned. The pace of the crypto industry is much faster than that of traditional finance; the speed of decision-making, execution, and feedback is more akin to the internet industry. Traditional finance has a more rigorous process, but in the crypto industry, especially in responding to customer demand, the response speed is very quick. This flexibility feels fresh and exciting to me. At the same time, due to some immaturity in the early stages of the industry, many institutional products and services need to be built from scratch, and this entrepreneurial atmosphere is very appealing to me.

Foresight News: After the new shareholders joined, has the company's future business strategy and focus changed?

Zhang Yinghua: The new shareholders bring not only financial support but also a fresh perspective on development. We will focus on two core directions: on one hand, we will continue to solidify our compliant virtual asset business, especially services like OTC and custody; on the other hand, we will strengthen our layout in the RWA sector, bringing traditional financial assets onto the blockchain to achieve more efficient on-chain trading. Our current asset tokenization project in collaboration with Huaxia Fund and Franklin Templeton is a significant attempt. The new shareholders are also very optimistic about the long-term prospects of virtual assets and blockchain technology, so they are willing to invest more resources to promote development in this direction.

Foresight News: There are currently two compliant exchanges in Hong Kong; how do you view the competitive relationship with HashKey Exchange?

Zhang Yinghua: We are one of only two publicly listed cryptocurrency trading platforms globally, the other being Coinbase; as a listed company, our financial information is clear and transparent, audited by one of the Big Four accounting firms, PwC. This characteristic can significantly reduce the due diligence costs for institutions and high-net-worth clients. For the industry to continue developing, I believe compliance is an important direction. Traditional financial institutions will also consider compliance as one of the most important indicators when choosing a trading platform. The significance of compliance lies not only in adhering to regulations but also in establishing an industry ecosystem capable of long-term development.

Foresight News: RWA has been a hot topic in recent years; what progress has OSL made in RWA? Will this become a future business focus?

Zhang Yinghua: Indeed, RWA is one of our key development directions for the future. The Hong Kong Securities and Futures Commission and the Monetary Authority are also actively promoting the development of RWA and have launched a sandbox program. We are currently collaborating with Huaxia Fund and Franklin Templeton to advance the on-chain tokenization project for money market funds, including custody, distribution, and trading aspects. The project is currently in the feedback and optimization stage, and there is a chance it will be pushed by the Hong Kong government to launch products within the next year. The significance of RWA lies in enabling real assets to circulate more efficiently on the blockchain, which helps us integrate with traditional finance.

Foresight News: Besides RWA, does OSL have new business plans in derivatives and stablecoins?

Zhang Yinghua: Under the compliance framework, we are also very focused on derivatives and stablecoin businesses. We are currently discussing cooperation forms with some local stablecoin issuers in Hong Kong, planning to help them develop through white-label cooperation or infrastructure support. At the same time, we are actively supporting the compliance of futures and other derivative businesses, as the futures market is an important risk hedging tool for institutional clients. We hope to communicate actively with regulatory agencies to ensure that these products can be launched under regulatory approval. Regulatory agencies place great importance on investor protection and certainly do not want investors to use high-leverage products that could lead to significant losses, especially for retail investors.

Foresight News: Regarding global market expansion, does OSL have new expansion plans?

Zhang Yinghua: OSL's current focus remains on the Hong Kong market, and we are closely monitoring global regulatory changes. The virtual currency industry is globalized, but regulatory policies vary significantly from country to country. We will gradually expand into global markets while complying with local laws, but the core will still be Hong Kong. This is because Hong Kong is not only one of the financial centers in the Asia-Pacific region but also close to the mainland market, which is one of the largest financial markets in the world. We hope to leverage Hong Kong's compliance advantages to integrate more closely with the mainland financial system.

Editor's Note: On November 4, OSL Group announced that its wholly-owned subsidiary would acquire 81.38% of CoinBest, a licensed cryptocurrency trading service provider by the Japanese Financial Services Agency (FSA), thereby entering the Japanese market.

Foresight News: One last question, how do you view the future development of cryptocurrencies?

Zhang Yinghua: Bitcoin is being accepted by more and more traditional financial institutions, and in the long term, its status as "digital gold" is strengthening. Especially with the launch of Bitcoin ETFs, price volatility is decreasing, and more investors are viewing it as a tool for hedging risks. Compared to gold, Bitcoin offers greater transparency and portability. Additionally, in the future, more assets will be tokenized and brought onto the blockchain, further promoting the development of asset conversion and collateral lending functions. This trend is expected to bring in trillions or even hundreds of billions in new asset inflows into the virtual asset market. Compliant exchanges will play a crucial role in this revolutionary transformation, ensuring the security, transparency, and compliance of asset tokenization, providing a solid foundation for the development of the entire industry.

免责声明：本文章仅代表作者个人观点，不代表本平台的立场和观点。本文章仅供信息分享，不构成对任何人的任何投资建议。用户与作者之间的任何争议，与本平台无关。如网页中刊载的文章或图片涉及侵权，请提供相关的权利证明和身份证明发送邮件到support@aicoin.com，本平台相关工作人员将会进行核查。