Huobi: Journey to the “X”
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It has been nearly a year since Huobi underwent a change of ownership and completed its brand upgrade. In these past nine months, Huobi has undergone a series of significant changes, including the entry of H.E. Justin Sun as an advisor, major restructuring of its organization and personnel, and the decision to apply for a Hong Kong VASP license.
Founded in 2013, Huobi was once one of China's most well-known cryptocurrency exchanges and this year marks its 10th anniversary. Over the past decade, Huobi has experienced the ups and downs of crypto while weathering various challenges. It witnessed the rise of Binance, the fall of newcomers like FTX, and the emergence of several new exchanges.
Now, the question arises: what lies ahead for Huobi? Where is the future of this veteran player in the cryptocurrency industry?
Hong Kong: A New Hope
Since October 2022, Hong Kong has officially embraced cryptocurrencies and Web3, causing a ripple effect that shook the crypto world. Amidst these adjustments, Huobi sees the need to embrace change and undergo a "new Huobi" transformation to strategically position itself in the Hong Kong market. The significance of Hong Kong in the crypto space is highlighted by its prestigious Hong Kong VASP license and the recently established HKVAC, which has garnered considerable attention from the Chinese crypto community.
In April 2023, Huobi Night was held during the Hong Kong Web3 Carnival, featuring a rare appearance by H.E. Justin Sun. This event sparked lively discussions both online and offline, leaving a lasting impression on the Web3 Carnival. In May 2023, Hong Kong witnessed the establishment of the pioneering crypto rating agency HKVAC with Huobi proudly becoming its first exchange member. On June 1, Hong Kong's new licensing regime came into effect, and Huobi was among the applicants for the Hong Kong VASP license. The exchange also launched Huobi Hong Kong (Huobi HK), making it available for registration by residents in the region. These developments reflect Huobi's unwavering commitment to Hong Kong and its strategic focus on the Chinese community and users across the Asian market.
The new regulatory framework in Hong Kong is crucial for the entire Web3 industry and especially for virtual asset exchanges. It provides essential support to nurture the Web3 ecosystem, encompassing virtual asset issuance, tokenized securities, blockchain payment platforms, virtual asset management, custody services, and underlying technological sectors. These directions align well with the development path pursued by leading exchanges like Huobi.
Apart from Hong Kong, Huobi has also made strategic moves in other regions by obtaining licenses in Japan and Gibraltar back in 2018. With five years of experience in operating compliant exchanges, Huobi has set up an independent system and appointed local experts to meet regulatory requirements in various jurisdictions.
However, whether Huobi will successfully obtain the VASP license remains uncertain. Like OKEx, Gate.io, and other cryptocurrency exchanges, the final answer on becoming part of the first batch of exchanges operating under Hong Kong's new regulatory regime will be revealed around the middle of 2024.
From the Past to the Future: Embracing Change
Earlier this year, Huobi underwent layoffs and a major restructuring of the organization.
What aspects of Huobi are adopting new directions and what retains their vintage charm?
While the exchange's core business continues to flourish, strategic changes have been implemented. It emphasizes the establishment of three pillars: the exchange, public chain, and stablecoin. These three pillars are also key focus areas for prominent exchanges like OKEx and Binance.
The involvement of H.E. Justin Sun has also brought some unique features to the platform. As a partner of TRON and DMC Labs, Huobi has provided full support for the Dominica Digital Identity (DDID) project, which aims to create a digital identity system within the Dominica universe.
Regarding products, Huobi has recently listed various virtual assets, such as wstUSDT (wrapped stUSDT), PENDLE (Pendle), TOX (INTOverse) through its PrimeVote event, and DESO (Decentralized Social), along with a featured zone dedicated to Real World Assets (RWA). Additionally, Huobi has collaborated with JustLend DAO to support the stUSDT staking project.
The narrative of Real World Assets (RWA) is currently trending and Huobi is actively participating in it. As traditional financial giants like JPMorgan Chase, Goldman Sachs, Citigroup, and BlackRock show increasing interest in RWA tokens, investors are placing more emphasis on risk management and compliance. Government bonds, especially US Treasury bonds, have become a safe haven for investment. TRON has introduced stUSDT and Huobi has provided significant support for it. Positioned as the Web3 version of Yu'e Bao, a Chinese money market fund, stUSDT aims to bridge the gap between individual and institutional investors, connecting the worlds of cryptocurrency and traditional finance through smart contracts. By doing so, stUSDT seeks to eliminate the divide that exists between individual and institutional investment targets.
Huobi has been focusing on developing stUSDT as a key product, which aims to bridge the gap between the blockchain world and real-world assets. It is considered a key factor in Huobi's plan to turn losses into profits in the second half of 2023. stUSDT offers users low-risk, low-threshold, and stable investment opportunities to invest in US Treasury bonds while providing the added benefit of flexible withdrawals. Furthermore, due to its composability, stUSDT is expected to play an essential role as a Lego brick in the DeFi ecosystem, which may further unleash the securitization potential of Real World Assets (RWAs).
Competing and leading: Huobi's path ahead?
Hong Kong's new crypto rules are viewed as a significant turning point in the cryptocurrency world with some industry insiders even referring to it as "the East is rising and the West is declining". This development has sparked great excitement among crypto entrepreneurs in the region. The policy has also triggered a competitive race among major cryptocurrency exchanges to secure a VASP license in Hong Kong, with the hope of being among the first batch of exchanges to operate under the new regulatory framework.
While Binance, OKX, Bitget, Huobi, and other exchanges are all expanding their presence in Hong Kong, they each have distinct focuses and stages of development. Binance is currently allocating more resources to address US regulatory challenges as it has already established a well-rounded business layout in terms of exchanges, public chains, stablecoins, and wallets. OKX, on the other hand, places more emphasis on the development of public chains and wallets with its resource allocation. Bitget is actively seeking breakthroughs in multi-dimensional and high-frequency trading, utilizing its wallet (Bitkeep) and Launchpad for these endeavors.
H.E. Justin Sun believes that exchanges, public chains, and stablecoins would become the core of the blockchain industry. It will be driven by new crypto friendly regulations in Hong Kong and tightening regulations in the United States. Following his strategic guidance, Huobi aims to play a significant role by establishing a strong foundation across the three pillars of the crypto market – exchanges, public chains, and stablecoins. Currently, Huobi is actively participating in initiatives such as applying for the Hong Kong VASP license and the HKVAC. Huobi hopes to position itself to take further action as Hong Kong's stablecoin regulatory policies take shape.
Centralized exchanges remain a pivotal player in the cryptocurrency industry. Though the changes in their status and structure may appear, the industry can experience sudden shifts with the top players "changing hands" approximately every three years. The question remains whether Huobi's strategic emphasis on Hong Kong and its three-pillar architecture will enable it to establish a foothold and thrive in this rapidly evolving landscape.
Huobi, a veteran player in the cryptocurrency industry for ten years, is now embarking on a new path with changes to its global presence and product lineup. While the past cannot be altered, striving for improvement and progress towards future goals is always within reach. The old Huobi may have faded away but the future of the new Huobi is bright.
About Huobi
Founded in 2013, Huobi has evolved from a crypto exchange into a comprehensive ecosystem of blockchain businesses that span digital asset trading, financial derivatives, wallets, research, investment, incubation and other areas. Huobi serves millions of users worldwide, with a business presence covering over 160 countries and regions across five continents. Its three development strategies – "global development, technology drives development, and technology for good" underpin its commitment to providing comprehensive services and values to global cryptocurrency enthusiasts.
Contact Details
Michael Wang
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COMTEX_437265514/2655/2023-07-24T15:10:39