Editor’s note: This article is from Bihu, author: Gu Yanxi, former deputy director of information technology of Huatai United Securities and COO of several financial service companies, reprinted by Odaily with authorization.
Editor’s note: This article is from Bihu, author: Gu Yanxi, former deputy director of information technology of Huatai United Securities and COO of several financial service companies, reprinted by Odaily with authorization.
The future world of encrypted digital assets must be a network ecology of digital finance. This ecology must be supported by the bottom layer of the blockchain, and the companies above it use the organization method of the token economy model to cooperate and compete. In such an ecology in the future, the identity of each user is confirmed and verified, and exists in a state that can ensure both privacy and identity authenticity. Various asset types in the real world are listed and circulated in this ecology through ST. On the basis of these assets, stable coins will be formed and circulated in this ecology. Users' digital assets and stable coins are stored in their own wallets on this chain. Since there are very liquid exchanges in this network ecology that provide digital asset trading services 24/7, users can freely and conveniently convert directly between their own digital assets and stablecoins. Users only need to use a wallet to trade on exchanges, pay at retail outlets, or transfer money to any wallet address on the chain. In such a network ecology, the current boundaries between banks and securities are not so clear, and securities transactions and retail payments will be more seamlessly combined.
Such a network ecology is not out of reach, and its prototype is emerging in the US STO market. The STO market in the United States is providing various basic parts of this network ecology, including the tokenization of real assets and transaction circulation, the discovery of stablecoins on mortgaged digital assets in a distributed manner, the link between transactions and payments, and the The custody of encrypted digital assets and post-trade liquidation on the blockchain, etc. And now it is clear that some companies have clearly seen this prospect and are working in this direction step by step. For other companies, it is very important to see this prospect clearly and combine their own advantages to prepare to establish their own unique value in this future ecology.
At this stage of the development of encrypted digital assets, all companies are basically on the same starting line, whether they are traditional financial companies, successful companies in the Internet industry, or current blockchain and encrypted digital industries. Companies that are thriving, or even companies that haven't existed yet. For these competitors, if they can clearly see the future development prospects and stick to the correct strategy, they have a high probability of grasping the opportunities brought by the blockchain. Of course, these companies also include Facebook.
According to current news reports, one of Facebook’s strategies in this regard is to develop its own stablecoin. In addition, although there are reports that Facebook has purchased some blockchain companies or has contacted some blockchain-related companies, there is no official report on Facebook's strategy in this regard.
In the process of working towards the ecological goal of this digital financial network, the most important thing is to clarify the goal and prioritize, so that it is really possible to establish its own place in this future ecology. For Facebook, I don't think stablecoins are suitable for Facebook at this stage. What Facebook should do now is to create an open network ecosystem based on blockchain technology that supports ST issuance, marketing and transactions. The value of such an ecology will be much greater than the equity value of a Facebook company. Moreover, the future development space, current development stage, regulatory system, technological development stage, competition situation, product and user operation space of the US STO market, as well as various advantages of Facebook itself are all important for Facebook. best chance.
In terms of market development space, although the current US STO market is still very small, I think it has huge room for development in the future. Various rights and assets in our reality will be mapped to the world of encrypted digital assets through ST. Its volume will far exceed the current stock market.
According to the current regulatory system in the United States, ST is mainly handled as an alternative asset, but equity financing can also be carried out on a small scale. Fundraising based on ST is basically private placement, but public offering can also be carried out on a small scale. And it can raise funds from both US users and overseas users. In terms of relevant regulatory licenses, various current regulatory licenses can also support this fundraising process, including licenses for investment banking, trading, asset custody, and investment and wealth management. Therefore, as long as any company in the United States holds a relevant license, it can carry out STO-related business in a compliant manner. This of course also includes Facebook.
In terms of technological development, basic technical systems have begun to migrate to distributed systems. Some distribution platforms are fully supported and operated on the blockchain network, and some trading platforms also adopt the mode of centralized matching and distributed liquidation. However, there is still a lack of a blockchain bottom layer that can be shared by various companies in the market. And this bottom layer is the foundation of the financial ecology based on ST in the future, and its value can be imagined.
In terms of competition, the current participants in the U.S. STO market are mainly start-up companies, whether in terms of issuance platforms, trading platforms, marketing platforms, or asset custody companies. Facebook is definitely an 800-pound gorilla in this market. The existing participants in various segments are definitely not Facebook's opponents.
In terms of the chronological order of development, since the US STO market is still in the early stages of development, the business development will not be too fast, and the transaction volume will not be too large. This gives Facebook enough time and opportunity to develop and improve related technical systems. The development of these technologies can actually be carried out simultaneously with the development of the STO market. The advantages of Facebook itself are obvious. Its huge social network covering all countries in the world is the coveted target of any financial company. In this regard, one can imagine Bakkt's pursuit of Starbucks. Facebook installs a digital wallet that can both trade and pay on its client, which can immediately increase the scope of transactions and usage of encrypted digital assets. In terms of financial business, Facebook has previously developed Facebook Pay and Facebook Credit products, so it has a good accumulation in related technologies and businesses. These are the advantages of Facebook in building a digital financial network ecosystem centered on the ST trading platform. Once this ecology is built, stable currency is one of the products. There can be multiple providers offering this product in a competing fashion. And there will be a more reasonable stable currency generation mechanism, rather than the current simple fiat currency encryption and digitization.
