The message conveyed by the 2026 Hong Kong Web3 Carnival is clearly distinct from industry discussions of previous years. If, in earlier years, the market was still repeatedly validating “whether Web3 possesses genuine value,” this time—judging from remarks by Financial Secretary Paul Chan, Chief Executive Officer of the Securities and Futures Commission (SFC) Kelvin Ye, and Fan Wenzhong, Executive Committee Member of the China Society for Finance and Banking and former Chairman of Beijing Financial Holding Group—the core of the discussion has fundamentally shifted: Web3 is no longer a technological proposition requiring validation, but is now entering an institutionalized, structured implementation phase. More precisely, what Hong Kong is attempting to build is not a “Web3 industrial cluster,” but rather an operating system for the next-generation financial system.
From “Asset Digitization” to “Financial Structural Restructuring”: In his speech, Financial Secretary Paul Chan repeatedly emphasized the significance of “tokenization,” explicitly noting that asset classes included in this process have expanded beyond early-stage crypto assets to encompass currencies and bonds, real estate, and future revenue rights. The crux of this shift lies not in changes to technical form, but in a fundamental transition in the underlying logic of financial structure.
In traditional finance, asset liquidity, divisibility, and participation thresholds are typically determined by centralized intermediaries; under tokenization frameworks, however, these constraints are recoded as on-chain rules—enabling assets to be fractionalized, circulated, and settled and distributed programmatically. This signals a more profound transformation: finance is shifting from “who owns the asset” to “how the asset flows.” Historically, finance involved asset allocation by a select few; under the new framework, assets begin flowing to broader participants with significantly lower friction. Thus, the essence of tokenization is not merely “moving onto the blockchain,” but rather a shift in the financial resource allocation mechanism—from “institution-led” to “rule-driven.” This transition lays the foundational conditions for subsequent large-scale financial innovation.
AI’s Integration: From Efficiency Tool to Economic Actor. If tokenization reshapes “assets,” then AI’s integration begins reshaping “participants.” Fan Wenzhong’s proposed “DAE (Decentralized Agentic Economy)” framework—as an Executive Committee Member of the China Society for Finance and Banking—offers a forward-looking interpretive pathway: in future economic systems, AI will no longer serve merely as a decision-support tool, but as an independent economic actor capable of autonomous action.
This conclusion rests on three critical premises: (1) AI Agents possess continuously evolving decision-making capabilities and can execute strategic choices within complex environments; (2) blockchain provides them with identity, accounts, and verifiable execution environments; and (3) programmable money and smart contracts enable them to directly participate in value exchange. Under this framework, financial systems will undergo a fundamental change: transactional behavior will no longer be driven exclusively by humans, but gradually evolve into a hybrid model of “machine participation, rule-constrained execution.” This implies not only enhanced transaction efficiency, but also a complete restructuring of market operational logic. For instance, in high-frequency trading, liquidity management, and cross-market coordination, the convergence of AI Agents with on-chain infrastructure may dramatically compress existing intermediary layers. It is precisely for this reason that Paul Chan stressed: “This interest in AI Agents—and the intersection of Web3 with artificial intelligence—will change the ‘rules of the game.’”
Institutional Imperative: From “Exploration” to “Executable Framework.” Clarity in technological pathways does not automatically guarantee system operability. What determines successful implementation is institutional design. On this front, Kelvin Ye—the Executive Director of the Intermediaries Division at the Securities and Futures Commission (SFC), representing Hong Kong’s regulatory authority—has delivered a relatively clear signal: Hong Kong is advancing its digital asset ecosystem from “policy statements” to an “executable framework.” Over the past year, Hong Kong has achieved three critical transitions: (1) systematic expansion of regulatory scope—exchanges, custody, staking, and derivatives have been progressively integrated into a unified regulatory system, laying the groundwork for institutional participation; (2) incremental liberalization at the product level—from tokenized funds to money market instruments—regulators are establishing replicable product pathways; and (3) clarification of infrastructure priorities—especially stablecoins, which have now entered the core of policy focus. The combined effect of these three developments is that Web3 in Hong Kong has moved from “discussable” to “executable.”
Stability and Continuity: Hong Kong’s Differentiated Advantage. Globally, regional attitudes toward Web3 exhibit pronounced divergence. The United States frequently adjusts policy, resulting in uncertain regulatory expectations; Europe emphasizes stringent regulation, constraining innovation space to some extent. By contrast, Hong Kong has adopted a distinct path: applying the principle of “same risk, same regulation,” it gradually unlocks innovation space via sandbox mechanisms while maintaining policy continuity. Hon. David Choi, Legislative Council Member of the Hong Kong Special Administrative Region, underscored “stability and transparency” in his remarks—an ostensibly principled statement that, within today’s global regulatory landscape, constitutes a significant institutional advantage: when uncertainty becomes the norm, stability itself becomes a scarce resource. This is especially critical for long-term capital and institutional participants.
From Industrial Competition to Systemic Competition. Synthesizing the above dimensions, what Hong Kong is advancing is not a single technology or sector, but a systemic construction: (1) an asset digitization pathway represented by RWA (Real World Assets); (2) a settlement network centered on stablecoins; and (3) an economic actor reconfiguration driven by AI Agents. These three pillars are progressively converging on a shared infrastructure—ultimately pointing not to “who is doing Web3,” but to “who will define how the next-generation financial system operates.” In this sense, Hong Kong’s role is transitioning from participant to rule-setter. When assets, rules, and participants all change simultaneously, financial systems often enter an accelerated phase of structural reconstruction. The current question may no longer be whether Web3 holds long-term value—but rather, in this wave of systemic reconstruction, how the new power structure will be redistributed.
*The content of this article is for reference only and does not constitute any investment advice. Markets involve risk; investment decisions should be made with caution.
Hong Kong Web3 Carnival: A Watershed Moment as Web3 Enters the Execution Phase
The Hong Kong Web3 Carnival marks a fundamental inflection point in the evolution of blockchain technology and digital finance. Unlike previous industry gatherings that debated the theoretical merits of Web3, this event signals the beginning of institutionalized implementation, with Hong Kong positioning itself as the architect of next-generation financial infrastructure. For experienced investors, this transition represents not just a narrative shift but a fundamental restructuring of market dynamics, investment theses, and value capture mechanisms.
Tokenization: The Financial Structure Revolution
The most significant development is the explicit shift from asset digitization to financial structural restructuring. Financial Secretary Paul Chan’s emphasis on tokenization extending beyond early-stage crypto assets to currencies, bonds, real estate, and revenue rights reveals a systemic transformation. This is not merely about moving existing assets onto blockchains; it represents a fundamental recasting of financial resource allocation mechanisms.
The core value proposition for investors lies in the shift from “institution-led” to “rule-driven” finance. In traditional markets, asset liquidity, divisibility, and access barriers are determined by centralized intermediaries. Tokenization recodes these constraints as on-chain rules, enabling programmable asset flows with dramatically reduced friction. This unlocks trillion-dollar markets currently trapped in illiquid forms, creating unprecedented opportunities for:
- RWA (Real World Asset) infrastructure providers: Projects enabling seamless tokenization, custody, and settlement of real-world assets will capture significant value as they become the plumbing for this new financial system.
- Composability protocols: The ability to combine tokenized assets with other financial primitives will create network effects and value multiplier effects.
- Specialized DeFi primitives: New financial instruments designed specifically for tokenized real-world assets will emerge, offering yield generation opportunities beyond traditional DeFi.
AI Agents: The New Economic Participants
Fan Wenzhong’s DAE (Decentralized Agentic Economy) framework introduces a paradigm shift that few investors have adequately priced in. The concept of AI evolving from decision-support tools to independent economic actors capable of autonomous action represents a fundamental reimagining of market participants.
This convergence of AI and blockchain creates several high-conviction investment opportunities:
- AI Agent infrastructure: Projects providing identity, accounts, and verifiable execution environments for AI agents will become critical infrastructure.
- Machine-executable financial protocols: Smart contracts designed specifically for AI agent interaction will capture value as these agents begin participating in markets.
- Specialized AI training datasets: Financial market data and behavior patterns will become increasingly valuable for training specialized AI agents.
The implications for market structure are profound. In high-frequency trading, liquidity provision, and cross-market coordination, AI agents could dramatically compress existing intermediary layers, creating efficiency gains but also disrupting traditional market makers and arbitrageurs. Investors should position for both the winners (AI infrastructure providers) and the displaced (traditional intermediaries).
Hong Kong’s Regulatory Framework: Institutional Adoption Catalyst
The SFC’s transition from “policy statements” to an “executable framework” represents regulatory clarity that has been absent in most global jurisdictions. The three-pronged approach—systematic expansion of regulatory scope, incremental liberalization at the product level, and clarification of infrastructure priorities—creates a runway for institutional participation.
For investors, this regulatory clarity unlocks:
- Institutional on-ramps: Projects positioned to benefit from Hong Kong’s regulatory clarity will serve as primary entry points for institutional capital.
- Stablecoin infrastructure providers: With stablecoins now at the core of policy focus, projects providing compliant stablecoin solutions will experience significant demand.
- Regulatory technology providers: Solutions helping projects navigate Hong Kong’s regulatory environment will become increasingly valuable.
Hong Kong’s “same risk, same regulation” approach offers a balanced alternative to the US’s frequently adjusted policies and Europe’s stringent regulations. This stability advantage becomes particularly valuable for long-term capital and institutional participants, creating a self-reinforcing cycle of capital inflows.
Market Implications and Investment Strategy
This transition from industrial competition to systemic competition redefines how investors should allocate capital. The question is no longer “which blockchain will win” but “who will define how the next-generation financial system operates.”
Short-term Opportunities (6-18 months):
- Projects demonstrating compliance with Hong Kong’s regulatory framework
- RWA tokenization platforms with early-mover advantage
- Stablecoin infrastructure positioned for institutional adoption
- AI agent development frameworks targeting financial applications
Medium-term Opportunities (1-3 years):
- Composable DeFi primitives designed for tokenized real-world assets
- Specialized AI trading and liquidity provision protocols
- Cross-chain interoperability solutions connecting different financial systems
- Decentralized identity systems for AI agents and institutions
Long-term Implications (3+ years):
- The potential displacement of traditional financial intermediaries
- The emergence of entirely new market structures governed by AI agents
- The tokenization of essentially all financial assets and revenue streams
Risks and Considerations
Despite the optimistic outlook, investors must navigate several significant risks:
- Regulatory arbitrage: While Hong Kong provides clarity, global regulatory divergence could create compliance complexities for cross-border projects.
- Implementation challenges: The tokenization of complex real-world assets faces significant technical and legal hurdles.
- Market structure disruption: Traditional finance may resist this transition more aggressively than anticipated, creating regulatory friction.
- Concentration risks: Power may consolidate among a few players in the new financial system, contradicting Web3’s decentralization ethos.
- Technology adoption curves: The integration of AI agents into financial markets may proceed more slowly than optimistic timelines suggest.
Conclusion
The Hong Kong Web3 Carnival signals the beginning of the execution phase for Web3, moving beyond theoretical validation to institutionalized implementation. For experienced investors, this represents a fundamental shift from speculation about blockchain technology to investment in the infrastructure of next-generation finance. The convergence of tokenization, AI agents, and stablecoins creates a new paradigm where value is captured not just by applications, but by the rules and infrastructure governing this emerging system.
Hong Kong’s regulatory clarity and stability advantage position it as the primary gateway for institutional capital entering this new financial ecosystem. Investors should focus on projects that serve as foundational infrastructure, demonstrate regulatory compliance, and benefit from the systemic transformation from “institution-led” to “rule-driven” finance. The current market cycle may be characterized by short-term volatility, but the long-term trajectory points toward a structural redefinition of financial markets with profound implications for value distribution and capture.