On December 5, the Hainan Free Trade Port Digital Economy and Blockchain International Cooperation Forum officially opened in Haikou. The founder of Huobi Group published a speech entitled "Blockchain and Digital Finance: Building a Global Financial Infrastructure".
Li Lin said in his speech that for a country and region, the important infrastructures for its economic development are: logistics, information, and capital flow. For a country to develop, in addition to some people, it must have means of production, raw materials, and a good information base. It must also have money. Different forms of money and funds will support our development. An efficient financial system is very important for the economic development of a country.
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He believes that the blockchain provides the payment industry with a second chance to change lanes and overtake, which can realize informationization, mobility, and digitalization in one step. In the future, digital currencies and blockchains are likely to become the supporting technology of a new generation of financial infrastructure, which will have a profound impact on the global financial landscape . Blockchain is very democratic and does not rely on traditional financial markets. The advantages of the traditional financial infrastructure established under this new structure are not as large as before, because any country or region can rely on this technology to build its own network in a convenient way. At the same time, the new infrastructure may pose challenges to the global financial system and payment network, dominated by the U.S. dollar, with SWIFT at its core.
The digital finance era has brought new trends and issues in global finance, and Li Lin has put forward his own judgments and suggestions. First, fintech has become an important driving force for global financial development . We must pay close attention to fintech and protect it at the forefront of technology. Furthermore, the financial sovereignty of various countries may be greatly challenged by the trend of financial globalization . We need to maintain independent control Third, global financial facilities and systems will be more open and diversified , and new infrastructure may become an alternative or option for SWIFT or Libra in the future; fourth, financial supervision will become a global issue , and future global financial supervision On the other hand, countries should maintain cooperation and work together to maintain global financial security.
Finally, Li Lin announced that in 2020, Huobi will build Huobi Cloud and Huobi Chain, namely Huobi Cloud 2.0, to provide a blockchain-based digital currency issuance and payment, and the overall solution of the digital asset financial market. Program .
The following is the full text of the speech:
Welcome to Hainan. I am honored to speak with you today. My topic today is to build a global financial infrastructure with blockchain and digital finance. Let us first analyze what is infrastructure. In terms of a country and region, what kind of infrastructure does its economic development have? We choose a few very important infrastructures. The first is logistics . First of all, our goods trade. Our people are going to a country and region. Why are these infrastructures? Because these determine the very important factors of production. What are our production factors? For example, people, our materials, commodities, and even raw materials, etc., so the first thing is to have logistics. We see that development is very uneven. Many countries and regions may not have highways. Unlike China, after 20 years of development, our villages are connected by highways. We see that many African countries and regions are very white, such as highways, railways, etc. The logistics infrastructure is very backward. I think this is the first infrastructure that is very important.
The second information flow , we are talking about the digital economy. A very important infrastructure of the digital economy is information. First of all, we need to have information that can flow freely and efficiently around the world. After data has become a production factor and information has become an important technical support, the Internet and mobile Internet of our country and region, and how its infrastructure is, are very critical. Everyone knows that we have just used Huawei's 5G mobile phone in China recently. Some regions can be glad to see that 5G has been implemented in some regions in China. We can also see that this is only according to the proportion of different populations. We see that the Internet and the information infrastructure of the world are extremely unevenly developed.
Back to our important subject, the last funding flow . Just now we had many scholars, experts, and our leaders spoke. Everyone thinks that a very important support for the economy and a foundation is finance. If I want to develop, in addition to someone, I have the means of production and raw materials, and I have a good information foundation. I also have to have money, different forms of money, and funds to support our development. We see that in different countries and regions, there are bank or mobile payment account account ratios. This ratio includes China, the United States, Japan, and other countries. You can see that the colors are very dark and the coverage is very high. In many countries and regions, Is very backward. This is also the subject we are studying today. An efficient financial system and an efficient financial infrastructure are very important for the development of a country's economy.
We look at the next one, blockchain and digital currency. Why do we discuss the topic just now in such a forum and discuss infrastructure, because we think that blockchain and digital currency give us these foundations The facility offers a potentially better solution and options that will be more efficient, cheaper and more open than traditional solutions. What are the specific aspects? We can look at, for example, a system such as banking and payment. Our traditional payment system, the payment process, is settled through the central bank, including the bank interbank settlement system, which has an information flow and capital flow, and the information flow and capital flow realized in the blockchain system. Obviously we start from In terms of this architecture, the latter is more efficient. Due to limited technical restrictions, such as high-frequency restrictions on transactions, etc., there may be comprehensive applications of these two in more scenarios, but we can see that blockchain and digital currencies provide us with an optional choice, will More efficient than the traditional one.
For example, everyone knows that the development of China's banking industry has lagged far behind that of the United States. When credit card payments have become popular in the United States, China has not even popularized bank cards, let alone credit cards. However, due to the development of mobile payment, the development of mobile Internet, and the development of Internet payment, China actually skipped credit card payments directly and realized mobile payment for the whole people. Today in any of China's remote mountainous areas, WeChat and Alipay can be conveniently used To make a payment. This degree of convenience has even exceeded US credit card payments, and the cost is extremely reduced. This is the so-called new technology to implement financial infrastructure. In fact, it is a lane change overtaking . Therefore, I think that for backward countries, relatively backward countries and regions, and relatively developing countries and regions, the financial system has not been as sound as countries and regions in developed countries. I think new technologies, especially blockchain and digital currencies Technology is worthy of our in-depth exploration and research, and exploration and application. This is an example of China.
We can take a look at cross-border financial infrastructure. If we say that we want to use the blockchain method, and the blockchain uses digital currency to build a cross-border payment, what are the advantages? Everyone knows that our largest cross-border payment system today is SWIFT and payment companies such as Western Union Pay. Today, the remittance is from a Chinese bank to a bank in the United States or Africa. Pay at least a few tens of dollars in cost, if they pay with Western Union, they will charge a few percent. The overall cost and rate are very high and are built on the existing financial infrastructure that is now mature. In the new we think about it, if we can use a new technology such as blockchain and digital currency, we can build a new optional alternative global financial infrastructure, and its cost will be greatly reduced. , Efficiency will be greatly improved .
Why is everyone so concerned about the launch of Libra? Because after Libra came out, anyone who had a Facebook account automatically had a bank account, and global transfers could be reached instantly and at very low cost. This one is now opening accounts in various banks and remittances through SWIFT and Western Union. Its cost is extremely reduced. Everyone is very concerned. This is revolutionary. There is also JP Morgan to launch its own U.S. dollar tokens. The United States is still at the forefront in this aspect, with exploration and experimentation in different directions. So we have a judgment, we think that in the future digital currency and blockchain, it will most likely become the supporting technology for our new generation of financial infrastructure, which will have a profound impact on the global financial landscape .
Why is there such a judgment? Because of this new technology, it has several very many characteristics. The first is that it is very democratic and does not rely on the advantages of our traditional financial market and traditional financial infrastructure. Under this new structure, It's not as big as before, because any country or region can rely on this technology to build its own network in a very convenient way. For example, if you use the traditional way of building a bank, a developing country needs to be as developed as the Chinese banking system. Basically every town in China has banks, township banks, so many banks, and a very large Complex inter-bank financial settlement centers, SWIFT, etc. for docking with foreign countries are traditional and the cost is very high. But under the new technology, we do it from scratch, everyone is the same, so for us, the starting point of everyone is the same as the starting point of the technology infrastructure, so I think this is the first Will have a profound impact on us. Some countries and regions may be the first because of the use of new technologies, and their infrastructure will exceed those of traditional developed countries.
Secondly, he may have a profound impact on our future financial structure. Because of the use of new infrastructure, it is now the US dollar and SWIFT, which are led by the US dollar. Will the global financial system and payment network at the core of SWIFT be subject to new challenges? This is a subject. I think this is possible because of the strength of the U.S. dollar, in addition to the U.S. national credit and the developed American economy, there is also an important reason to rely on U.S. SWIFT. Compared with the United States, which has a sound banking and payment system, this infrastructure is his A very important reason. If there are more and better choices for this infrastructure, will the financial landscape change in the future due to the development of technology? I think this is also possible. So we come to such a judgment.
On the basis of the foregoing, we have several very important judgments and suggestions on the entire field of global digital finance, digital currency, and blockchain.
The first is that fintech will become an important driving force for global financial development. It was mentioned just now because new technology brings new means and new ways. It may be revolutionary, so this is not just China. China has always attached great importance to science and technology, and attaches great importance to new technologies and new technologies. Including us two months ago, we proposed the blockchain as a very important national strategic technology. So we suggest that we pay close attention to fintech, and real-time protection is at the forefront of technology. This is the first.
Second, the financial sovereignty of various countries may be greatly challenged in the trend of financial globalization , which is a huge problem. We communicate with our partners in various countries. Everyone has a common concern. What is it? If Libra comes out, will my citizens use Libra currency instead of their own sovereign currency? Because these nationals have Facebook accounts, once the Facebook Libra coin is launched, they automatically own Libra coins, which can facilitate payment and transactions. Will it challenge my financial sovereignty? This is a lot of countries, and our partners are worried about one thing. From the perspective of practitioners, I think this will inevitably be a challenge, and it is also inevitable in the process of financial globalization. In this regard, I think that I think we need to suggest that we need to maintain our ability to be autonomous and controllable, that is, whether we can rely on our own strengths and make something as good as Libra. This is a question. In addition to our own currency credit, in terms of technology, do we rely on our independent capabilities and can also make the same advanced and convenient currency payment system, currency distribution system and network as Libra? I think this is very important . From the perspective of maintaining national financial sovereignty, autonomy and control are very important topics.
Third, global financial facilities and systems will be diversified and more open . I just said that it is the current global currency payment. The entire financial system is instantaneous. The US dollar and the United States are the dominant related infrastructures. I believe that having more choices must be a better thing. If there is competition in any market, relevant entities will benefit from the competition. If there is a second one and a third one becomes an option, I believe it will be a happy thing for all countries. So driven by new technology, I think the global financial system will be more diversified in the future, and new infrastructure will become an alternative or option for SWIFT to become Libra.
The fourth financial regulation will become a global issue. Libra has discussed many rounds in the US Congress, and one of the important concerns is regulatory issues. Because of digital currency, and because of blockchain, financial globalization has been brought about. It brings the point-to-point de-intermediation characteristic, which brings a very big problem to the supervision. In the past, we basically supervised in one region and one country. The future financial supervision is global. We often see that some time ago, the G20 held a meeting in Japan. The governors of the central banks of the 20 countries discussed how to coordinate supervision. In response to this new digital currency, the new financial globalization situation and situation. Therefore, we have a suggestion. We believe that in the future global financial supervision, countries should maintain cooperation and work together to maintain global financial security.
These are our conclusions and recommendations. Seeing this demand, Huobi launched its own Huobi cloud, which began as a technical service for digital asset exchanges. But because we saw a lot in the cooperation process, in addition to the digital asset transaction, in financial infrastructure, relying on the blockchain, relying on digital currency, this one is the core demand. So we upgrade Huobi Cloud's strategy once.
2020 For us, a Huobi cloud, for us Huobi, we have an important strategy: we redefine ourselves, define digital financial technology and operating service providers, we used to be just a digital asset exchange Such a technical service provider. Everyone knows that capital markets or securities markets are only a small part of financial infrastructure. And blockchain and digital currencies can do more. In the process of working with these partners, these countries and regions, we discovered their new needs, and we also have the ability to do this better, so we hope to bring our Huobi Cloud, Huobi Chain's two products are made to share a new financial infrastructure solution based on the blockchain, which is shared with all our partners.
What characteristics do we have? Huobi Chain is open source. All of our systems are shared. All of our systems are completely autonomous and controllable. We do not sell them to you or we control them. The second is autonomy. On all chains, in each country and region, each partner can set up its own nodes on the chain and operate its own chain independently. The third is customized for financial applications. Finance has many payment scenarios, including fees, the purpose of the model, and so on. Including the knowledge regulation issues mentioned later. This is our most important feature. Supporting the government as a key node to join our public chain control and supporting KYC, these are several cores. Stable and reliable because for so many years our experience based on blockchain and digital assets is our feature.
Finally, I sincerely say to all partners from all over the world that we hope to strengthen cooperation with you. We hope that in the future, the new new finance, the new wave of financial globalization, and the new financial infrastructure, we Can further strengthen cooperation and further strengthen communication and exchanges. Create the future together. thank you all.