"Farewell Hayek": Conjecture on the Development Space of STO in China

Abstract: Looking forward to the top-down "Zunyi Meeting" on STO. After "clearing the source of the original", it is good to "get rid of the imagination" and "go up the mountain and go to the countryside".

This article involves:

#Core technology / independent innovation / industrial development

#Crypto industry under supervision: clearing and sandboxing

#Traditional Finance & Digital Economy & Crypto Industry

#Primary and secondary markets since "turning point"

#Finetechfintech #Coin minting, issuance and financial stability

On December 1, 2019, the Hainan International Offshore Innovation and Pioneering Demonstration Zone Construction and Blockchain · Digital Asset Trading Technology Innovation High-end Forum was held in Sanya, Hainan. At the meeting, "digital asset trading" became a hot topic for leaders of governments at all levels to attend the forum and experts in finance, supervision, and new economy. Since the end of 2018, the STO that once fell to the altar has once again become the focus of industry and regulatory attention.

Picture source: Chinanews

China Asset Securitization Forum Chairman Meng Xiaosu pointed out at the forum that blockchain and asset tokenization will become a disruptive technology for real estate asset transactions, and called for the establishment of Hainan REITs Exchange in Hainan (Note from Lan Chain Think Tank: Chairman Meng's positive statement Or it can be interpreted as similar to the establishment of a comprehensive platform for the pricing, issuance, financing, and distribution of real estate asset securitization with real estate trust investment funds (REITs) as the main transaction target under the supervision of Hainan Sandbox. The form of ST promotes business, that is, from asset securitization to asset tokenization, realizing real estate assets that are tokenized are priced, traded, and circulated globally, and in the case of opening up traditional financial markets and the crypto industry. Here ("Crypto industry" includes the global cryptocurrency market dominated by mainstream digital currencies).

Previously, the highest official regulatory height for STO was: In December 2018, Huo Xuewen, director of the Beijing Municipal Bureau of Local Financial Supervision and Administration, publicly stated that doing STO in Beijing “will be deemed to be driven away from illegal financial activities”, and the market has since fallen into freezing point. Up to now, domestic issuers, consulting agencies and intermediary service agencies whose main business is ST issuance and their main research direction have all been studying what is happening abroad. In China, the mainstream has seen it cool. Even the "small air outlets", IEOs and various IXOs (IBO IMO IFO IVO …) that burst on the track this year, have no STO.

Compared with the caution in mainland China, the policies in other countries and regions generally have a higher risk tolerance. The SEC (abbreviation of the Securities and Exchange Commission) classifies tokens other than Bitcoin (BTC) and Ethereum (ETH) as securities, and includes all securities-type tokens under supervision. Although the state's policies differ slightly in implementation details, the overall framework is still within the SEC's guidelines, and the US market is currently the world's largest sto market.

Western European countries [Germany, Luxembourg, Estonia, Gibraltar (currently successful cases are mainly applied to high-value real estate and rich high-value art, cultural heritage, etc.)], Canada, Japan, Singapore and other countries have also adopted relatively loose supervision of STO By the standard, the Lithuanian central bank even became the first central bank in the world to issue STO guidelines. The move of the Lithuanian central bank represents, to the market, the urgent will of European entrepreneurs to switch asset issuance and financing methods to replace traditional loans; to national governments, it represents the strategy of "national system" for many small countries active in the crypto track. "Develop the card first to overtake the curve". In fact, like Estonia, Lithuania is also a member of the Baltic Alliance, which as early as November 2017 stated that it officially supports the development of blockchain technology. Estonia, also a member of the alliance, leads the world in the degree of openness of cryptocurrencies and its practical application.

However, Lanchain Think Tank scanned the issuers and asset targets in the domestic market and found that they were bad or non-formed (molding refers to a complete commercial closed loop, no challenge to supervision, non-air projects, etc.). The items were over-packed, using domestic and overseas, and domestic and foreign markets. False propaganda made by poor information from the source of intelligence in the market accounts for the vast majority of market activists. Most of the so-called research institutes, consulting agencies, and issuing housekeeping services agencies are actually just many distributors and subcontractors with first-hand resources. Under the SEC framework, the first case of an STO project (not listed, can be easily retrieved), due to its full exposure, its compliance has been generally recognized by the market, but the quality of the hundreds of projects queued in the subsequent queues is uneven, not What will happen with st issue? The health of the project and the asset itself is the key to determining the entire life cycle of the project, not the way the asset is priced and issued.

Since the "turning point" in the 18th Politburo's collective learning of blockchain technology [broadcasted by Xinhua News Agency on October 25, 2019 at 18:14 Xinhua News Agency], the entire digital asset industry chain with blockchain as the core underlying technology has undergone tremendous changes. The change. The rapid improvement of policies has greatly improved the development environment of the industry and promoted the compliance development of the industry. As a more advanced form of asset securitization, asset tokenization has also gained more attention from the provincial level government and more active and pre-researched aspects of supervision in the new context, but higher-level management And the academic world, since Director Huo has rarely spoken.

At present, the industry and academia can form a basic consensus: STO will provide lower issuance costs, more transparent information disclosure built on the blockchain, efficient smart contract revenue distribution and greatly increased assets (for example : Global real estate and artworks are suitable for the separation of high-value targets into small investment target assets, which greatly reduces the barriers to entry for investors to invest in high-value targets, and also has a full complement of regulatory and disclosure functions). But there are many problems.

The overall shrinking and downturn of the crypto industry, the expected and achieved harm caused by the scam of cryptocurrency under the cover of STO, regulatory uncertainty (now can be hedged with sandboxes), asset tokenization and asset securitization ( The impact of order in traditional financial markets, firewalls), and ST-issued infrastructure (that is, compliant exchanges) that can be recognized by central banks and regulatory agencies in various countries, are huge obstacles to staggering in front of st-issued.

At present, driven by favorable policies, the mainland is independently launching complementary asset pricing and issuance platforms such as the A-share main board / GEM / New Third Board / Science and Technology Board (such as the establishment of a new digital asset exchange in Hainan). It is still based on the ST's future issuance demand in mainland China, and other digital assets are fully or partly loaded into the regulatory sandbox of Hong Kong for long-term testing. Up to now, the mainstream will expressed by senior management and local governments is still “researching”.

The more realistic problem is that if one can find a clearing real estate through supervision of Shahe, and use TOKEN for token circulation worldwide, it may become a way to help the domestic real estate market increase liquidity, reduce inventory, and deleverage. A tool for regulatory reference and experimentation.

A deeper background is that global central banks are desperately releasing water. This year's inhabitants of the earth have moved towards the descending stairway of the new round of economic cycles. All-round multilateral trade friction, the geopolitical ignition point of the calabash, and the economic thoughts that continue to dissolve and innovate and can dominate the economic policies of major economic unions in various countries (such as the Austrian Retreat which represents a free economy , Representing the comprehensive recovery of Keynes involved in economic policy). In today's over-emphasis on technological competition, in the context of the game of great powers, competition in all frontier fields will begin in full swing. China, under the observation and leadership of Gao Wujian, the top leadership, has reversed China's international position in the global blockchain track in one fell swoop, and has profoundly affected the global cutting-edge technology ecology. However, each stage on the track, like the hills and positions in a major battle, not only can not be lost, but also strive to capture. No one knows whether a small, unknown highland today will be the key to turning the whole war.

Absolute freedom means absolute corruption and uncontrollability. Fully market-oriented "autonomous balance" is not necessarily impossible, but it will definitely pay the price of horror. The only benefit in the end is only the role of "absolute freedom". Up to now, the domestic regulatory storm for the entire stage of the blockchain circuit has made it clear to everyone that the order and hope brought by the supervision.

STO, too.

Looking forward to the top-down "Zunyi Meeting" on STO. After "clearing the source of the original", it is good to "get rid of the imagination" and "go up the mountain and go to the countryside".

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