Global Fintech Institute Talk about NFT, CBDC, and The Future of Cryptocurrency

This is an interview series called AheadoftheCurve which was arranged by ByBit.

In this episode, ByBit invited Chia Hock Lai, who is the Co-Chairman of the Blockchain Association of Singapore and Co-Founder of the Global Fintech Institute. This is an insightful session, packed full of Crypto goodness – as they discuss the prospects of Blockchain, the Adoption & Regulation of Crypto, NFTs, and much more!

It is a one-hour interview video. So to make it easier to understand while watching the interview, I have summarized some of the important points below.

Is crypto gaining global acceptance?

Check out the video at 3:07

• 2021 was considered quite game-changing because of a lot of blockchain use cases like non-fungible tokens and DeFi.
• Growing institutional interest, the top 15 banks by asset management has directly or indirectly invested in blockchain companies.
• El Salvador making Bitcoin legal tender
• However crypto adoption is less than 5% of the world’s population, and we are far from we’re so far from global adoption

How crypto is evolving in South East Asia?

Check out the video at 5:36

• Countries like Vietnam, and Indonesia are some of the world’s highest adopters of cryptocurrency.
• Southeast Asia has a population size of 650 million, half of them are below 30 years old. The population is pretty young and digitally savvy with very high mobile phone penetration but 70% of them are underserved by financial services. So we can expect the next 20 years that is going to be a large generation of wealth transfer from the first-gen to second-gen. This situation provides a very fertile ground for medium to the long-term development of blockchain in Southeast Asia.

How does the increase in interest rates & inflation impact the crypto market?

Check out the video at 11:08

• Crypto market started to fall after the Federal Reserve announced that it will start tightening the monetary supply going to raise interest rates, and then that triggered some selling off.
• Increasing the interest rate definitely will then increase the cost of business.
• It will actually like reduce the global liquidity flowing into the crypto market and that will negatively impact on crypto prices for quite an extended period.

What is the future development of CBDC – Central Bank Digital Currency?

Check out the video at 14:17

• According to the Bank of International Settlement, more than 80% of central banks are exploring or piloting or even launched their stablecoins.
• The reason for introducing CBDC is from an efficiency and financial inclusion perspective to support the growth of the digital economy, which was as accelerated due to COVID-19.
• Close to 200 million Chinese citizens don’t have access to bank accounts. So this financial inclusion plays a critical part in many of the countries that are implementing retail CBDC, including Nigeria.
• Another benefit of CBDC is the lower costs of printing and cross-border fund transfers.
• If CBDC becomes more pervasive, it is going to be a game-changer to connect real-world access to the crypto economy, because it will accelerate adoption. there will accelerate more asset tokenization by having more tokens that are backed by real-world assets.

What is the future of the regulatory environment in the crypto market?

Check out the video at 17:42

• The world of regulation on crypto is likely to continue to be quite fragmented over the short to medium term
• With regulators understanding the technology behind blockchain and the industry a lot better, we could expect more regulations and in fact, tightening of regulations.

What is the longevity and potential of NFT? Is it here to stay? And why?

Check out the video at 27:01

• NFT most likely will be a digital collectible and it is something that is visual people can relate to it. So that led to its prominence.
• NFT has also become an important element in gaming.
• NFT now has expanded to much other utility value and it’s here to stay.
• There is some high speculative element in the market now, but over time, the speculative side of things will slow down and the utility side of things will grow more.

Full Transcript From This Interview

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Francesca: Hey guys and welcome to ahead of the curve brought to you by Bybit. My name is Francesca and you could call me Fran. And here, you know we’re going to be talking about some of your favorite topics right or buzzwords if I were, to be honest, within the space, we’re talking about blockchain, digital assets, and the role is really in the advancement of the global economy as we know it. Joining us today, we have Chow Hock Lai, co-chairman of the blockchain Association of Singapore, and also co-founder of the global FinTech Institute. Hock Lai, Welcome. Welcome to the show. And thanks so much for joining us today. Do you want to say hi to everyone and do a little bit of intro?

Hock Lai: Hi, everyone, like what Francesca has introduced. I’m the co-chairman for the blockchain Association, Singapore and association founded in late 2018. Previously, I was the founding and former president of the Singapore FinTech Association has been quite active in both the FinTech and the blockchain ecosystem for the last five years. Happy to be here and honored to be invited by Bybit to share my views on things related to blockchain and crypto.

Francesca: You know, I think right now, it’s a really exciting time, right to be in the space, you know, that blockchain technology and also crypto adoption, really, in general, is growing massively right around the world. Just a couple of days ago, I saw a report from you know, US banking giant Wells Fargo’s Research Division, it was titled I think, cryptocurrencies like too early or too late. That kind of theme, you know, where they talk about really cryptocurrencies as a viable investment. Right. And they say that, you know, they don’t believe that the whole idea of now, you know, being too late to invest in crypto, you know, the, the whole timeline of things and it being like, I think they use the word relatively young, where they used to describe the space, you know, relative, of course, to other asset classes, at least. So, that’s on investment, but on a more kind of casually relatable front, right, we’re seeing more tie ups, between non-crypto or, you know, we can say legacy companies by teaming up with crypto firms, you know, on home ground, my home ground on bybit at bybit. Here we have Oracle Red Bull Racing’s partnership right with bybit announced just last week, all the way to like kind of Staples Center, very renowned landmark stateside being renamed the crypto.com arena. I think you and I, you know, Hock Lai, we we’ve been talking about basically how many people are seeing this as crypto inching into mainstream Right. Kind of crypto adoption. So Hock Lai, my question to you, what are your thoughts on this is crypto gaining global acceptance?

Hock Lai: I think the year 2021 was considered quite game changing because like a lot of blockchain use cases like non fungible tokens DeFi really grow exponentially. And on the other hand, we are seeing growing institutional interest. I think one of the recent report shows that the top 15 banks by asset management has directly or indirectly invested in blockchain companies. And then of course, we have El Salvador making Bitcoin legal tender and then Coinbase, one of the very one of the proxy for for the Web3 world they got listed. However, if you look at the number of crypto addresses, I think for for Bitcoin is about 80 million, and for Ethereum is about 190 million. So if you add these two addresses together, it’s probably less than 5% of the world’s population. So I think we are far from we’re so far from global adoption. If we relate that to the growth trajectory of E commerce right 20 years ago, I think only like 3% of all sales are digital. But today we are seeing like close to 40%. So I think that is the benchmark we should be looking at. But then that also reflects that the growth opportunity for crypto is still a lot substantive right? Let’s see today we have 5%. At some point in time, 5-10 years down the road, we could reach 10%-20% or even up to 40%. Thanks.

Francesca: You know, I think right now, it’s a really exciting time, right to be in the space, you know, that blockchain technology and also crypto adoption, really, in general, is growing massively right around the world. Just a couple of days ago, I saw a report from you know, US banking giant Wells Fargo’s Research Division, it was titled I think, cryptocurrencies like too early or too late. That kind of theme, you know, where they talk about really cryptocurrencies as a viable investment. Right. And they say that, you know, they don’t believe that the whole idea of now, you know, being too late to invest in crypto, you know, the, the whole timeline of things and it being like, I think they use the word relatively young, where they used to describe the space, you know, relative, of course, to other asset classes, at least. So, that’s on investment, but on a more kind of casually relatable front, right, we’re seeing more tie ups, between non-crypto or, you know, we can say legacy companies by teaming up with crypto firms, you know, on home ground, my home ground on bybit at bybit. Here we have Oracle Red Bull Racing’s partnership right with bybit announced just last week, all the way to like kind of Staples Center, very renowned landmark stateside being renamed the crypto.com arena. I think you and I, you know, Hock Lai, we we’ve been talking about basically how many people are seeing this as crypto inching into mainstream Right. Kind of crypto adoption. So Hock Lai, my question to you, what are your thoughts on this is crypto gaining global acceptance?You know, hopefully you mentioned several very interesting topics here. You know, you talk about NFT. You talk about kind of El Salvador, and I think all these kinds of themes I would love to discuss with you further as we go along, right in the program. But for now, let’s tighten the playing field a little bit, right and talk about blockchain specifically in Southeast Asia. You know where you’re at? You’re just about I think, well, let’s start with, I think Thailand, I think just about one or two days ago, I saw an interview on Bloomberg, that the Stock Exchange of Thailand, you know, they’re they’re talking about their plans to launch a digital asset exchange. I think as soon as before the end of this year, they were saying that they’re bullish right on the utility and the investment tokens kind of assets in 2022. Right, so this actually follows very closely on the heels of what we’re seeing in Singapore, the country’s banking giant DBS, also announcing plans to launch their own retail digital asset trading desk by the end of this year. Right. So I guess my question to you, Hock Lai, is how in your point of view, do these decisions affect the crypto space? If not globally, then at least in Southeast Asia? And I guess Singapore, right, in particular?

Hock Lai: Yeah. If you look at the the digital asset exchange from Thailand, right, I think that one is operated by the Thai Stock Exchange, and is specifically referring to security tokens, because for the last few years, Thailand has been issuing out crypto exchange licenses. So they have been supportive of this market. And so do many other countries in Southeast Asia by and then, if I recall correctly, countries like Vietnam, Indonesia are some of the world’s highest adoption of cryptocurrency. So if you look at if you zoom out, and then look at Southeast Asia, it has a population size of 650 million, half of them are below 30 years old. So these are pretty young, and digitally savvy population with very high mobile phone penetration. But on the other hand, I think about 70% either unbanked or underbanked. So that which means that they are really underserved by financial services. And we know that younger folks prefer digital assets, and we can expect for the next 20 years that is going to be large into generation wealth transfer from the first gen second gen. conglomerates to the younger. So I think overall, I think this provides a very fertile ground for for medium to long term development of blockchain in Southeast Asia. As for Singapore, I think the the position he plays right are twofold. First, is that being one of the leading financial sector, I think, by positioning itself as the institutional crypto hub makes a lot of sense, in terms of retail market, with just a population size of 5.6 million, or it’s just a fraction of Southeast Asia. I don’t think that it is a very attractive market to many people. But I see many blockchain and crypto companies setting up offices using Singapore as a business hub over the last 24 months. I see a pickup in this. So I think everyone knows the luxury retail market will be in Southeast Asia one or one of the fastest growing and many are using Singapore purely as a business hub as a base for them to launch their crypto and blockchain businesses in the region. Thanks.

Francesca: Sounds good. Sounds good. I think it’s quite an apt kind of time to take a look at the markets today. The Crypto markets, I think, overnight, spilling into today really, we’re seeing a sea of red. Right. So looking at where we stand right now, the bellwethers, of course, we can’t talk about crypto without mentioning BTC right, the king of crypto Bitcoin at this point 34,000 US Dollars 8% South bound and changed on 24 hours change. Ether we’re looking at 2300 US Dollars 12% lower than what we saw yesterday same time, and also various other currencies like XRP 0.6 USD per change negative 11%. You know, all these really slam slap the sentiments pretty negative right now slammed on a back really a deepening I think Russia and the Ukraine crisis. Crypto prices, of course have been trending South since reaching record highs. If and if I’m not mistaken, I think like early early November of last year, right. So, recent volatility, though, does come in amidst like a broader market sell off, driven by investors worldwide right, recalibrating their portfolios to account for a more aggressive central bank stance, specifically, when we’re talking about state sides with the US Federal Reserve putting in a very hawkish tone recently expecting to raise interest rates as many as seven times this year, in a bid really to fight inflation. So Hock Lai, let me bring the conversation back to us here and really tapping on your expertise and understanding of the global economic situation, what outcomes really would the rise in interest rates, right have on markets? And I guess, you know, we’re in this space. Well, let’s talk specifically also in the crypto markets, and really, I guess the real questions on many traders minds is should they be concerned right.

Hock Lai: Now, you rightly mentioned the all time high for Bitcoin, Ethereumrium and many other cryptocurrencies were reached in early November last year, and and they started to to fall after the Federal Reserve announced that they will start tightening monetary supply going to raise interest rates, and then that that trigger of some selling off, so So definitely, from the wider perspective, right. We see a lot more positive correlation over the last few years between tech stocks and and cryptocurrency. The main reason is that like, when interest rates rise, it will hurt the tech stocks more, because many of the tech companies are moving, you recall the early days of Facebook and Google, right? They make, or even Amazon, they could be making losses for five years, 10 years, because they rely on loans to expand. So increasing the interest rate definitely will then increase the cost of business. So that’s that’s one angle. But the other angle is also for the last few years, right that we asked, we are seeing more institutional players coming into space. So again, so now we start to see that it is more correlated to how the traditional equity market is reacting, like what they are reacting to the latest developments between Russia and Ukraine. Few hours ago, Russia, just the Russia military forces has entered Ukraine territory. So we see that positive correlation. But so all this combined, right, it will actually like reduce the global liquidity flowing into the crypto market. And hence, I think that will negatively impact on crypto prices for quite an extended period, I think at least until q3 this year. And I think the other reason is also that the current crypto Bull Run is already close to two years old. So typically, it will take at rest. So I think that’s how this how the interpret of interest rate, geopolitical tensions, and institutional players, how are they they are now affecting the price of crypto. Thanks.

Francesca: So so it sounds like the momentum, you know, in the markets or, you know, whether slowing down or kind of taking a breather, right, if I may say so. But I think we’re also looking at key developments on the CBDC front, right central bank digital currency last year, especially, you know, I think we’re, I think we saw like 80, 80 plus close to 90 countries exploring cbdc at this point, and something like nine countries, including I think, China, South Korea, and I think the latest entrant might be Nigeria being on the frontlines of adoption and implementation. What is really the significance of this development? Is there any spillover into market sentiment, investor sentiment, and what should we really pay attention to in 2022 when it comes to defining moments in this area?

Hock Lai: So according to the Bank of International Settlement, right, more than 80% of central banks are exploring or piloting or even launched their stablecoins. The reason of introducing cbdc right is really, from an efficiency and financial inclusion perspective to support the growth of the digital economy, which was as accelerated due to COVID-19. So even if you are looking at a country like China, which is already very, very developed in terms of FinTech, right, I saw report that close to 200 million Chinese citizens don’t have access to bank accounts. So definitely this financial inclusion plays a critical part to many of the countries that are implementing retail cbdc, including in area from Nigeria that you pointed out. And the other benefit, of course, is the lower costs in terms of like printing in terms of cross border, fund transfer, cbdc will result in all this benefit. In fact, to me, I think, if CBDC becomes more pervasive, right, it is going to be a game changer to connect real world access to the crypto economy, because I think that will accelerate adoption, there will accelerate more asset tokenization having more tokens that are backed by real world assets. And because now you have very legitimate widely adopted cbdc, more people will then be willing to come into this crypto assets economy and start adopting all this all this CBDC. But I also have a different take as like, frequently people ask me right, then are CBDCs competing with privacy? Because my take is that I think the market is big enough to for both to coexist. They have different strengths and weaknesses. For example, let’s say if you’re looking at like for, for US to even launch digital dollar, that will take at least easily another three to five years. But now you already have many privacy, private cyber coins that are backed by USD. Yeah. So So I think the world will have enough room for both CBDCs and stablecoins to coexist together. Thanks.

Francesca: I like that CO is coexist, I was actually curious to find out from you, right? Whether or not one would replace the other kind of the roles that they play in terms of, you know, the whole grand scheme of things. coexistence is something that I’m personally very excited about. So thanks for shedding light into that. How about the regulatory environment of things are kind of like the development, the landscape of regulatory acceptance? And I guess more importantly, kind of like the implementation of things, how things have evolved? Right. I think, from my perspective, at least from what I’m reading, you know, from conversations, I think it might have evolved quite significantly. Again, as of last year, writing 2021 was quite a defining moment for the space, whether you know, in terms of momentum, like a given market momentum, but also on acceptance. You mentioned institutional acceptance. And also, you know, on the regulatory front, I think we’ve got El Salvador, legalizing Bitcoin. And also, I think what was quite interesting towards the end of last year, we had the US Bitcoin futures ETF being passed, and crypto firm coinbase going public, right with its NASDAQ IPO. But in parallel, we’re also seeing countries adopt a stricter stance right toward cryptocurrencies. So Hock Lai, from your point of view as a leader in the blockchain and fintech space, talk us through your views, your opinions really on the future of the regulatory environment as you see fit.

Hock Lai: Okay, first thing I think we the world of regulation on crypto is likely to continue to be quite fragmented over the short to medium term. But one thing is clear is that nowadays, regulators understand the technology behind blockchain and understand the industry a lot better. And with this better understanding, we could expect more regulations and in fact, tightening of regulations. So for example, the most recent would be like, for example, like Singapore or MES recently to give a guidance to ban crypto advertisement totally. The following night right. Spain also came up with thier it’s not a ban for for Spain actually subject to advertisement to regulatory review. So do you need that need the regulator to approve before you can advertise. And then a few days later, UK also follow suit that they’re going to regulate to advertisement and they will classify crypto as financial products that’s subject to financial regulations and And again, like we see that in India, they have the push pool like 1/10. For the longest time, I think the Reserve Bank of India has been trying to outlaw crypto but on the other hand, they are many supporters for having crypto and now they seems to try to reach a compromise especially from the angle of extracting taxation revenue from crypto. Russia said many times that they intend to ban and restrict and I think last week, I saw that you can actually endorse Bitcoin. Yeah, same thing. Thailand has banned the use of crypto for payments, but they are supportive of crypto as investments. So you so I think we are not going to like, we will still continue to see this very fragmented nature. But it is my belief that the regulation will continue tighter as regulators understand the sector more, they will know, which are the areas that they need to safeguard, for example, consumer protection, for example, like preventing money laundering or terrorist financing. So those are the areas that they are more interested in. But of course, there’s also the angle of like, taxation, right? We are now in the now moving towards a post-pandemic world. So in the root of economic recovery, I think we need as much tax revenue as possible. So So I think overall, the trend will still be like tightening, but that will also introduce regulatory clarity, clarity, and that that will then usher in more mainstream adoption of crypto. So I think while is tightening. I think it’s good for the industry over the medium to longer term. Thanks.

Francesca: That’s, that’s very, very interesting, Hock Lai. And I want you to hold that thought because I want to do a shout out really to our audience viewing and today, if you’ve just joined us, welcome, welcome to ahead of the curve. Brought to you by bybit. You know, we have today, Chia Hock Lai, who is the co-chairman of the blockchain association of Singapore. He is also the co founder and the leader, really in the global FinTech Institute, very knowledgeable in a space, talking about blockchain talking about FinTech and really digital assets, right in the kind of like the role in the advancement of the global economy. We’re talking about collaboration, you know, implementation, and just so many different use cases, right of the blockchain technology into digital assets. I do see some questions streaming in from the audience right now. Do keep writing in if you have any questions for Hock Lai, you know, tap on his expertise has his his experience in the space. And I’ll be happy to kind of read it out in about 10 to 15 minutes from now. Because I personally have burning questions myself. So so back to Hock Lai and and what you just mentioned earlier, if I may just kind of throw in a little curveball for you Hock Lai, how do you see kind of the, the use case, right for crypto currencies? We’ve talked about? And you’ve mentioned really, you know, kind of a coexistence potentially, when it comes to cbdc How about cryptocurrencies, some people view it as an investment, kind of asset, right? Some people say that, you know, you can use it as a form of currency. I saw an interesting video produced by some of the talents within the company the other day, and it really shows the life of three three guys, right? Going around the city, New York City to be exact, kind of just, you know, trying to use Bitcoin as a currency trying to buy pizza, trying to buy coffee, with Bitcoin, people talk about it, but I think the reality at least at this point of using Bitcoin as a currency is still a little bit tricky, right? So I mean, that’s just just kind of my observation and what I thought is interesting. So Hock Lai, I don’t know whether you have an opinion on on how crypto is being viewed right now, and whether or not there’s a potential or case right for for crypto to be used as a currency in whether the near medium or long term future.

Hock Lai: So okay, I think we have to look at the crypto because many cryptocurrencies have different functionalities right, while Bitcoin originated to be peer to peer electronic money arising from the global financial crisis, but due to the volatility volatility in prices, so you we hardly see any merchants or people using Bitcoin for transaction many of them rather hold it for is price. growth potential, right? So so so I think more or less the world settles down. Okay, Bitcoin can play this digital gold role, although whether they are really digital gold is subject to a lot of controversy. So So yeah, but more or less right people, I mean institutions, or even the high net worth folks, they are viewing Bitcoin as a form of store of value. But when we look at other currencies, they have other kinds of utility value, right? For example, ethereum, right with the smart contract capability, you can then build a lot of things, including, like, you know, NFTs. And one of the things of this material is really you can use it to create stablecoins, right. And then when we talk about stablecoin, that is where I think I think is very exciting. And if you look at it together with CBDCs, these are currencies with very stable value, and it makes sense for you to, to use it for transaction as a payment. Yeah, so that’s why I say that further development of CBDC is actually very good for the whole crypto economy as a whole because you bring more people into the fold of the crypto economy. Yeah, so So that’s, that’s my view that for a cryptocurrency to be used as a unit of exchange, right? It needs to have stability in value, and that’s where stable coins come into play. Yeah. Thanks.

Francesca: Nice. That’s, that definitely does shed some light into the use case of crypto and I guess how people can adopt it and, you know, kind of have it as part of their daily lives, right? You mentioned NFTs and that’s really an area that I’m personally very interested in. Right. The wonderful and colorful world of NFTs for the uninitiated, it’s NFTs basically is known for non fungible tokens essentially digital assets right anything from JPEGs to videos and audio that can be bought and sold. And a lot of people will some see it as a fad right other see as an investment opportunity. Ownership I think that’s a big area that people talk about long known in the blockchain world really but recently really taking hostage the imagination if I may say so of the broader public, right? We’ve got celebrities and brand names really entering the space from our remember my Google classic The parrot trap, right star, Lindsay Lohan and Shark Tank investment guru, Mark Cuban. We’re also looking at brands like NBA, Formula One, luxury brands like Louie Vuitton, Gucci, they’ve all really gotten into this whole NFT craze or NFT space, right? Let’s talk about an NFT and potentially like the longevity of NFTs is it here to stay? And why?

Hock Lai: So okay, I think we have to look at the crypto because many cryptocurrencies have different functionalities right, while Bitcoin originated to be peer to peer electronic money arising from the global financial crisis, but due to the volatility volatility in prices, so you we hardly see any merchants or people using Bitcoin for transaction many of them rather hold it for is price. growth potential, right? So so so I think more or less the world settles down. Okay, Bitcoin can play this digital gold role, although whether they are really digital gold is subject to a lot of controversy. So So yeah, but more or less right people, I mean institutions, or even the high net worth folks, they are viewing Bitcoin as a form of store of value. But when we look at other currencies, they have other kinds of utility value, right? For example, ethereum, right with the smart contract capability, you can then build a lot of things, including, like, you know, NFTs. And one of the things of this material is really you can use it to create stablecoins, right. And then when we talk about stablecoin, that is where I think I think is very exciting. And if you look at it together with CBDCs, these are currencies with very stable value, and it makes sense for you to, to use it for transaction as a payment. Yeah, so that’s why I say that further development of CBDC is actually very good for the whole crypto economy as a whole because you bring more people into the fold of the crypto economy. Yeah, so So that’s, that’s my view that for a cryptocurrency to be used as a unit of exchange, right? It needs to have stability in value, and that’s where stable coins come into play. Yeah. Thanks.If you look at NFT, right, I think he came into prominence in 2017. I’m not sure they still record the crypto kitties craze that almost like gem of the entire ethereum network. Yeah, but that time was just flashing the tech was so different this round, I think mainly because like, we have an extended run. We have people like medical vendor who needed who bought everyday 500 NFC for 69 million that really then spark off worldwide craze over NFTs and if you look at NFTs right, I think this is something that the mess the the mess the I mean, more people can relate to which rather than cryptocurrency which is more abstract, right, because an NFT for example, most likely will be a digital collectible and it is something that is visual people can relate to it. So that led to his prominence. And then of course that we see that the NFT once you extend it right, it becomes an important element in tourism in gaming. So that now close to games, right? With all the items like your swatch your shoe, or as an NFT you can then take it out and sell or even move it across different blockchain gaming environment. And then by the same token, right, the NFT could be your Nike sneakers in the metaverse and then of course then we have then then relate to the how Facebook has rebranded into metal how Microsoft is going to spend $69 billion to to acquire Activision, which is one of the major gaming companies. So you can see that I think NFT now has expanded to many, many other utility value. And I think it’s here to stay definitely there is there is some high speculative element in the market now, but I think over time, the speculative side of things will will, will slow down and the utility side of things will grow more. In fact, I still think that even for NFT, it will be it could have it could be in future lending, that, that on one spectrum, right, you have, you have countries like for example, China, they term NFT as, I think digital or virtual collectibles, that you can buy, but you cannot resell, so they are trying to eradicate the speculative element. On the other extreme, right, you have the wild west of NFTs whereby it is super and regulated, it can also report that up to 90% of all sales in open sea, or one of the top NFT platform was trading, right. And you will have those that will be in between there will be some of them will start doing KYC to make it more legitimate. So I think this is three different landing points of the future of NFT. And the thing they are all equally possible. In fact, I think they like me, they will coexist very much like how many countries are treating crypto regulations differently? Thanks.

Francesca: Nice. That’s, that definitely does shed some light into the use case of crypto and I guess how people can adopt it and, you know, kind of have it as part of their daily lives, right? You mentioned NFTs and that’s really an area that I’m personally very interested in. Right. The wonderful and colorful world of NFTs for the uninitiated, it’s NFTs basically is known for non fungible tokens essentially digital assets right anything from JPEGs to videos and audio that can be bought and sold. And a lot of people will some see it as a fad right other see as an investment opportunity. Ownership I think that’s a big area that people talk about long known in the blockchain world really but recently really taking hostage the imagination if I may say so of the broader public, right? We’ve got celebrities and brand names really entering the space from our remember my Google classic The parrot trap, right star, Lindsay Lohan and Shark Tank investment guru, Mark Cuban. We’re also looking at brands like NBA, Formula One, luxury brands like Louie Vuitton, Gucci, they’ve all really gotten into this whole NFT craze or NFT space, right? Let’s talk about an NFT and potentially like the longevity of NFTs is it here to stay? And why?That’s, that’s very interesting. I have a few kind of follow up questions because I, you know, you mentioned the gaming side of things, and also mentioned the wash tray sort of thing. So I do want to address, you know, kind of like what advice you would give in terms of how to safeguard but let’s let’s park Let’s park that thought because, you know, I recently got myself an Oculus, right. And that personally for me was fascinating entering the world, the metaverse and experiencing it firsthand, you know, whether when it comes to gaming or really just socializing in the metaverse, I think that was personally an eye opener for me. You know, within the metaverse, there’s obviously an avatar, right. So I don’t look like this in the metaverse and I think you mentioned, you know, the use case of NFTs being able to take on a new persona within the metaverse with the use of an NFT whether in terms of Avatar or even the clothes that that that your avatar would wear. Again, you know, I’m not sure if our viewers here watch the movie Ready Player One? I think that was was it 10 years ago, I think it was the whole idea and the whole technology and the you know, the whole metaverse space has been around for the longest time. Right? But it kind of you know, came into popularity in recent years. People like me, I only just recently got into the space. But you’re reading articles, you know, talking about people buying real estate, right? So the real estate can be informed NFT to use case in the metaverse and also kind of like your luxury brand handbags, right? In fact, I think some are saying that the price point for example, for a certain brand of handbag, you know within the metaverse is slightly more expensive than the actual bag itself in, if I may say like real life, right where we are right now. Right? So I don’t know I this is just kind of my experience and my point of view of things, but Hock Lai for you apart from kind of gaming, I used to be a gamer used to buy I don’t know, various. Yeah. Fun stuff within the gaming space. But, you know, potential uses of NFTs. Do you think there is, you know, kind of a, an extended use case or a longevity also when it comes to the potential use case of NFTs?

Hock Lai: Yeah. Yeah. So like, since you’re talking about metaverse right from to me, I’m a very simple way of explaining Metaverse will be like, you have AR plus VR plus blockchain. Right. The blockchain part. I mean, Oculus has been around for the last few years. They are not new, but really like, inspires people’s imagination is really when people start thinking that when you add in the blockchain element, right? Then all the items in the metaverse can be an NFT they can be traded. They can like be proof that you own that asset. Totally. Right. So that’s why now, there’s a lot of investment into this whole metaverse. But then back back to the point on NFT. Beyond beyond gaming, beyond collectibles, and I think there are a few number of potential uses. One is NFT as a form of digital identity. Yeah, because like as we move more commerce into the into online into Metaverse, right, we definitely need that and if the your passport can be an NFT for example, even your education certificate can be a number although that is already being done in the lot of people really issuing educational certificate in blockchain. The other thing is that I recently came across a project that actually converted they actually tokenize villas in the resort in Indonesia into NFTs. So, in that resort, they have 300 villas, so they actually sell each of the villa that they are building into an NFT that in a way makes it easier for people to transact to trade on this villa resorts right. The other use case I see people are using it to tokenize wine into NFT or even does this show me that they actually sell NFT shoe that at some point in time, they will actually build the actual shoe that you can redeem, okay. And and NFT can also be used in healthcare, for example, like all the different when we go to see a doctor, all the different medical reports, right, they can be then represented as a form of NFT. And then combined with self sovereign identities, as I talked about NFT identity, right, then we can decide we can easily aggregate all the different medical data of ourselves, and then decide which are the one we want to release to the doctors. So that’s another use case, I think, again, supply chain is definitely one of the strong use case mean very obvious, right? You talk about luxury handbags, right? They can be treated, they can be minted as NFT, and track and trace from from factory to the retail shop. Last but not least, I think it can also be applied into the insurance industry, for example, like your whole life endowment policies, they accumulate cash value over time. And at some point in time, right, some people might want to cash it out due to one reason or another, instead of surrendering that that life insurance policy to your insurance company, you could you could sell the NFT version to other people and, and because it’s an NFT, it makes it easy to buy and sell so you you for the for the one selling the the insurance and NFT, right, they fetch a higher price for the buyer, right, it makes it easier for them to then resell to somebody else at some point in the future. So I think we are just we are just merely scratching the surface of the different functionality of NFTs. Yeah, we are still in very early stage. That’s why I believe in the longevity of NFTs

Francesca: I like scratching this scratching the surface is so so true. I think that the possibilities are endless and I’m kind of like smiling grinning right now because I recall a conversation that I had right about someone wanting to propose with an NFT ring. Some people find that romantic because it lives forever right on the blockchain. There’s also kind of better value if you’re talking about reselling than physical ring, but I mean it’s it really just kind of brings to life right kind of what how creative people can can be with the use case of an NFT but I want to circle back Hock Lai into you know, kind of the safeguards and of how people use or I guess you know, live with this this new you know, innovation right. Earlier you mentioned various, you know, brother hacks or compromises within the system security system, what advice would you give investors or the public and kind of what should they note to better safeguard themselves?

Hock Lai: Yeah, because like, now, you see every Tom and Harry are coming into into NFT. So like, like, the last few last month, we have this Indonesian guy who did his own selfie and manage to sell $1 million worth of his own selfie and NFTs right and then in Singapore, we have this Irene Zhao. She also managed to raise a few million. Right. So So and then of course, we also have similar news that people are being scammed. They paid for NFT. But they didn’t get it, or there’s a rug pull whereby the they put in the money, but the developer ran off. Right? So I think one thing very important is that when we are investing in nft, right? Don’t invest just money, invest in time, invest in time to pick up knowledge. That’s why like, a few governments, they are not supportive of retail investors to come into crypto because unless you are crypto savvy, right, this is really not a suitable investment class for you. Yeah, and if you really, really want to really spend time, okay, do your research, check in multiple sources, right? Where is a social media that websites? The Reddit, right? And also have very strong cyber risk hygiene? Like how can you protect your crypto wallet? Yeah, because we see that if you don’t do it, well, your your, your valuable NFT could be easily stolen. And also be very, very wary when there are dubious websites, or even phishing links. So all these are different effect. But one thing that I always highlight is that if the offer is too good, right, probably is too good to be true. These are red flag already. Don’t be too greedy. Really do your homework check. Yeah, thanks.

Francesca: You bring up very, very good points there, you know, within the context of vibe, and even my personal experience, right, when I first entered the space, it was very, very, it’s a fascinating space, there’s so much to learn and understand about it, it’s not just about the technology behind it, but it’s a lot about kind of, you know, the community, right, and how community sentiment kind of drives the entire space. So, you know, within my work here at bybit, we do produce a lot of educational material, right? Like you mentioned how to, you know, Safeguard your assets, when you entered the NFT space, if you want to find out about what NFTs are to begin with, there’s an NFT one-on-one, you know, so check out learn.bybit.com That’s where you get to find a an array really of information and educational material that we can tap on just to learn a little bit more from the outside looking in. At the same time, if you’d like to experience right and NFTs in if I may say so like in the physical realm, ByBit will actually be purchased participating in art, Dubai, and we will be the lead partner in this event happening from March 9 to 13th. In Dubai, what this is really is our first NFT marketplace showcase. So, you know, serving as a bridge really between the crypto sphere and the art market or device digital section, we’ll explore the digital digital space through the eyes of the art world. Earlier we talked about ownership, we talked about expression and I think NFT at the NFT space really could provide great potential and and you know, a space for expression right for artists worldwide. There will be a gallery section showcasing art and innovative formats for participating galleries and also a series of bybit talks, discussing the technicalities and possibilities within the new media and NFT art stratosphere. So we are I’m afraid running almost out of time. So I just wanted to, you know, touch on your expertise again, being in the blockchain space where I want to talk about the future of blockchain. Final question really for me before we move on to audience questions and answers, you know, buzzwords aside, we heard blockchain we heard you know, fill in the blanks tech, right? So we have FinTech, EduTech, medtech. There’s almost every forms of filling the blanks tech in nowadays. What direction Hock Lai Do you think blockchain technology and really just financial innovation as a whole is headed towards and more importantly, what themes would be worth paying attention to this year amidst all these discoveries and fluidity in the space?

Hock Lai: Okay, I think early on I touch on the thing on like cbdc and asset tokenization. I think this is the space that I think will be very interesting to watch out for this year and next year. I do believe that cbdc will start to gain more adoption. And then that will lead to more demand for tokenized assets. That’s the first thing. The second thing I think will be in the space of DeFi moving 2.0 Because the current DeFi was on one of the major floor is the way that attracts liquidity, which is not sustainable. So we have various different 2.0 projectors that are coming out. So I’m quite excited over that. But also this will be I also think this will be the year whereby BOC right regulations come into the DeFi space. So do expect to see some DeFi regulation to come in this year. The third thing, I think we will see more and more niche and specialized level one layer one, layer two chains, for example, like, you know, like, Dapper Lab they have the flow chain. For the NBA Top Shot, axie infinity, they also came up with their own side chain, Ronin sidechain. So I think this is going to be I mean, no longer it will be dominated by that one not that few player one chain, I think it’s going to be multi chain world. So we will see some niche chain coming up. And something that is related to it will be why call more and more cross-chain interoperability projects because more and more layer one layer two chain right then need the technology that can facilitate moving of assets across all these different chain? Yeah, that’s my very brief take on the future and what to expect in 2022. Thanks.

Francesca: Yeah, it’s really impossible to really dive deep into detail with such a short amount of time. I don’t want to hog your all of your time, Hock Lai, because I do want to get to some of the questions that the audience have written into. Right. Thanks so much for sharing your analysis and really, you know, feeding into my curiosity for the past half an hour or so. Let’s start with a question on web 3.0. Do you think it is a boon or bane towards working together in the digital asset space? Question from nat.

Hock Lai: Okay, so the common definition of web 3.0 is really about the ability to own things. And that’s where the strength of blockchain comes in, right. So we see that for NFT, right? You can like uniquely on a particular digital asset. So So I think web3 is going to be a boon. In general, for the digital asset space, we already see that because of this, right. We see now, there’s a lot of innovation in NFT. I shared, I shared that just now I forgot to say that I think 2022 are going to see NFT 2.0. And NFT there are more dynamic. For example, let’s say if you have a digital collectible cut for basketball players, the statistics of the player could be dynamically updated based on the player’s performance in the coming year in the future. So I think, in general is going to be boon

Francesca: Nice. Speaking of NFTs, there’s another question from the audience asking for your views on trading NFTs in Singapore. Do you foresee Singapore as an NFT friendly place?

Hock Lai: I think last last week or the week before MES actually gave a response to that thing saying to the tune of like Currently, most of the NFT use cases are digital collectibles and art. And these are not regulated and mes can’t regulate possibly everything. Right? However, if the NFT has elements of financial product, right, then regulation might come in. So I think that’s that. That’s the response to that.

Francesca: Staying within the space and discussion of, you know, Singapore, there’s also another question on whether Singapore will be more open to crypto in the near future.

Hock Lai: Singapore has Oh, I mean, the Singapore government has stated many times that we are supportive of innovations, all kinds of innovation, including those innovations from blockchain. So definitely we are seeing a lot of innovation for crypto again, like the only thing is that most countries including Singapore, they don’t want too much speculation. So those that are speculative Those, those crypto innovations are speculative in nature, and especially when it involves retail investors, especially it can be systemic, right. Those are the things that the government will not support. This is already reflected in recent ban on the retail crypto advertisement. Thanks.

Francesca: Sounds good. I have another question here, actually, to back to back. So I’m not sure maybe we want to focus a little bit more on the NFTs side of things. But there’s a question from the audience asking about what we think of the Elrond ecosystem. But focusing on the NFTs side of things. We did discuss this earlier, but I guess for the benefit of our friends who’ve joined a little bit later in the discussion, and NFTs really are a very big topic that piques the interest of many people. So Hock Lai do you think NFTs will ever be used to transact property titles or other real life assets? That can be uniquely identified?

Hock Lai: I think that never say never. Yeah. It’s it’s a complex question. It depends on quite a lot of things. Right, including like whether whether the entire property property information system is ready to be integrated into the blockchain. Right. So but but to me, I mean, it might happen. But I don’t know when it but I think it’s, it’s more likely to happen in one of the smaller countries, whereby it’s a lot more manageable. Yeah.

Francesca: Sounds good. Sounds good. We do have other questions surrounding CBDCs. Hock Lai, could you elaborate on the differing roles of CBDCs, and private, stablecoins and how they would co-exist?

Hock Lai: Yeah, for example, like, if you look at most of the private stablecoins, right? Most of them are not using it. I’ll be very blunt, and most of them are not using it to purchase goods and services. They’re using it to trade crypto. Right. So I don’t, I don’t expect that many people will use cbdc to trade crypto for for obvious reasons. So that’s why they could quit. That’s one of the one of the many reasons I can think of Yeah.

Francesca: I I personally very intrigued by this question, and I would love to hear your thoughts on it. What is the impact of crypto Bitcoin on the environment? And maybe I personally would throw in another aspect of this right. What do you think is the impact on blockchain? The technology on the environment?

Hock Lai: Yeah, I think the this the question, the ESG impact of Bitcoin has been argued many times, because on one hand, right, we know that like the the energy consumption of Bitcoin is higher than many countries, right? On the other hand, the crypto miners are saying that most of the energy they are using renewable energy that would have gone to waste anyway, if they don’t use it, because you read the energy demand are lower a certain period of time. So they’re actually helping to use the renewable energy. who’s right who’s wrong to be frank at this point. I, I think it is still too early, until we have more definite data on that. Having said that, we are seeing more and more change moving to for example, like a proof of stake consensus, which is more green, like the likes of Solana the likes of polygon. So I think over time, as more and more layer one blockchain move to the more energy friendly consensus algorithm, I think the impact on the environment will lessen. And on the other hand, blockchain technology can be used to facilitate some of the Green Movement, for example, they can use it to trade carbon credits, they can be used to trade renewable energy certificates, they can be a very good source of database to solve to store metrics of companies say that they are going green. Right. So so so I think it blockchain does have its role to play in in the ESG world. Thanks.

Francesca: I think you know, even Steve Wozniak who’s like the co founder of Apple, he, as well launched an energy efficient company called G force. which really combines the best of blockchain and environmental support. So I think this is definitely a space that has much potential and definitely a space that I’m personally looking into and keeping my eyes on as well. Going back really into collaboration and extend into co creation, there is another question from our audience, asking about the opportunities to collaborate shake hands co create within the FinTech and crypto space. Now, just just an additional point, a, you know, prior to being I guess, within the space, I think there’s a lot of general sweeping of you know, FinTech, tech, innovation and crypto, it being lumped in together. But I think there are the various nuances that that kind of defines each of these words in space. So, you know, back to the question, Hock Lai, from our audience, what do you think? And where do you think are the opportunities to collaborate between FinTech and crypto?

Hock Lai: as I do to the interest of time, this is probably the last question I trust. Okay, I’ve been active in both FinTech and blockchain space. Actually, I shared before the founding president for Singapore FinTech association. So before I stepped down last year, we have pulled in 100 corporate members and international collaborations in 40 countries. I’m seeing the same growth trajectory for blockchain. In fact, I think blockchain was is like FinTech three years ago. So in fact, I will say that the blockchain is growing much more rapidly. Now. Some people will say that blockchain is the next fintech. Having said that I start having some of my FinTech friends approaching me How can FinTech company, either pivot into blockchain, or at least have some products related to crypto? Right. So I think there is some kind of convergence. On the other hand, there are many people in the FinTech space, the quite anti crypto so far be very frank. Yeah, they don’t believe that is a legitimate product. So is I think this is where I think industry associations can play a very important role by bringing different stakeholders whether is it the regulators, different parts of the industry, including the bank, or even the consultancies all into one platform and facilitate collaboration among them? So I think this is where industry as you can play that kind of rollout to facilitate collaboration. Thanks.

Francesca: You know, guys, really, where did the time go? Hock Lai, like you mentioned, I’m afraid we that’s all we have time for for today’s session. It’s been an amazing one hour there are still questions from the audience that we weren’t able to address but you know, guys for anyone and every one of you who who’s watching this and really have burning questions for various leaders when there’s within this space, right, this is a monthly show, and we do come back every month with various you know, leaders within the space. Next month. It is women’s will next month, I can’t remember what day but we are celebrating Women’s Day next month and we will have a very special guest joining me on ahead of the curve. So tune in again, we will be sending out reminders and dates and details for that coming up. So this is ahead of the curve. I’m Francesca. You guys are awesome. And thank you so much, Hock Lai for just being an amazing guest in the past hour. We can’t wait to have everyone again and as well as you Hock Lai on the show. Goodbye, guys. Be kind to one another and take care. Okay.