Industry leaders at the Finternet 2025 Asia Digital Finance Summit in Hong Kong agreed that policy shifts in Hong Kong and mainland China are reshaping the Web3 industry — but they described the market as undergoing consolidation, not a full bear cycle. Panelists said Digital Asset Trusts (DATs) remain a promising institutional vehicle, although DATs must evolve beyond simple staking strategies to survive and attract broader institutional capital.
Summit setting and who spoke
The Finternet 2025 summit — held at the Grand Hyatt Hong Kong on Nov. 4 and organised as a regional forum for digital-finance leaders — brought together regulators, exchange operators, asset managers and Web3 founders to discuss policy, compliance and product innovation. Panelists on the Hong Kong–Mainland China policy session included crypto commentator Colin Wu, Kevin Cui (OSL), Patrick Pan (China Renaissance advisor) and Livio Weng (Newfire Technology), among others.
Market view: consolidation, not collapse
Speakers repeatedly framed the current market as a consolidation phase driven by rationalization of business models and capital, not as the start of a prolonged bear market. Panelists pointed to stronger compliance, tighter capital discipline, and product rationalisation (fewer, higher-quality projects) as characteristics of this phase — a pause that may set the stage for more durable growth if regulators and markets continue to align.
DATs: promising — if they evolve
Digital Asset Trusts drew particular focus. While DATs are still seen as one of the most credible paths for institutional crypto exposure, panellists warned they can’t rely solely on staking yields as a business model. To attract long-term institutional capital, DATs must broaden their value propositions — for instance by providing diversified yield stacks, clearer custody and audit frameworks, and more predictable regulatory treatment. Several speakers urged product innovation and stronger disclosure to address investor concerns.
Hong Kong: steady opening and pragmatic regulation
Panelists described Hong Kong’s approach as gradual and pragmatic — regulators have moved from rigid gatekeeping to building regulated on-ramps for digital assets and institutional participation. Observers highlighted recent regulatory adjustments that shift Hong Kong’s posture from “guardrails only” toward enabling growth and connecting local liquidity to global capital, noting the territory’s ambition to be an Asia hub for compliant digital-asset activity.
Mainland China: cautious but watchful
By contrast, mainland Chinese authorities remain cautious. Panelists said Beijing’s policy stance is heavily shaped by consumer-protection and anti-fraud priorities; authorities continue to crack down on schemes that have led to retail losses, and that posture keeps large parts of China’s regulatory apparatus conservative on Web3-facing products. That caution limits cross-border institutional activity originating inside the mainland, even as Hong Kong opens to business.
What industry players said (high-level takeaways)
- Consolidation ahead of recovery: Market participants expect a period of rationalization where weaker actors exit and stronger, compliance-focused firms gain share.
- DAT evolution required: DATs must move past single-strategy models (staking) and offer diversified, audited, and regulated exposures to win institutional capital.
- Regulatory bifurcation: Hong Kong’s step-by-step opening contrasts with mainland China’s caution, creating a multi-speed regional landscape that firms must navigate strategically.
Why this matters
The region’s policy path will help determine whether Asia becomes the global testbed for regulated Web3 products or whether activity fragments to other jurisdictions. Hong Kong’s willingness to calibrate rules to attract exchanges, custodians and institutional products could channel liquidity and talent — but mainland caution and ongoing fraud concerns mean market access and retail participation will remain uneven. The net effect: more institutionalized products, but a slower, more compliance-driven growth arc.
What to watch next
- Regulatory tweaks in Hong Kong — watch for further technical rule changes that make it easier for custodians and DAT managers to operate.
- DAT product roadmaps — whether trust managers publish diversified yield and risk-management plans to appeal to institutional allocators.
- Cross-border cooperation — any regulatory coordination between Hong Kong and other APAC regulators that could expand institutional access.
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