Frank, Executive Director of OKX Hong Kong: Opportunities, risks and future of the RWA track

On April 6, the roundtable forum "Unlocking RWA: Insight into Opportunities, Challenges and Cooperation in the Blockchain Era" held during the 2024 Hong Kong Web3 Carnival came to a successful conclusion. Frank Zhang, Executive Director of OKX Hong Kong, Devon Sin, General Manager of ZA Bank, Paolo Chen, Chief Strategy Officer of VDX, Darshan Vaidya, Co-founder of Credora and other industry veterans conducted in-depth discussions on topics such as opportunities in the field of RWA (Real World Asset On-Chain), risk management strategies, and the integration of traditional finance and decentralized financial ecology. As one of the Executive Directors of OKX Hong Kong, Frank is responsible for overseeing the business growth and operations of OKX Hong Kong, a leading virtual asset platform. In addition, he leads the exchange’s business strategy, which aims to provide industry-leading virtual asset services to the Hong Kong market while adhering to the strict regulatory compliance standards under Hong Kong’s Virtual Asset Service Provider (VASP) regime. In the past, Frank has more than a decade of experience in the traditional financial sector, having worked at renowned financial institutions such as Daiwa Capital, CLSA and Liquidnet Asia, and led the design and implementation of complex algorithmic trading strategies for these companies.

During the event, guests discussed the development opportunities in the RWA (Real World Asset On-Chain) field. Frank said: "The traditional financial ecosystem has a history of more than 600 years. In the past 600 years, people have made the world more efficient by understanding the essence of traditional finance and applying it scientifically. But with the advancement of technological innovation, the development of RWA is clearly a trend. People can use technology to further improve efficiency and further save related costs. Of course, some traditional financial companies are already very mature and do not necessarily need to add RWA-related businesses, but other companies are likely to increase their development space and competitiveness by deploying the RWA track."

When mentioning how the RWA platform deals with risk factors. Frank believes that for the RWA platform, it is very important to implement various strong measures to mitigate risks and enhance investor confidence for the long-term stable development of the RWA track. The platform should have a strong security infrastructure, smart contract audits, self-regulation (such as POR), compliance with regulatory requirements, full transparency, appropriate investor communication, continuous monitoring and incident response, insurance coverage, etc.

"We look forward to more institutions exploring and adopting blockchain technology-based solutions using a hybrid model of traditional financial industry standards and blockchain technology for all aspects of RWA operations. This model can combine the advantages of traditional finance (such as regulatory expertise and established customer relationships) with the efficiency and innovation of blockchain platforms, and can promote the virtual asset industry to form a set of best practice standards, and promote seamless integration, data sharing and asset transfer between the two ecosystems of traditional finance and virtual assets."

In addition, when participating in the discussion of RWA's future application scenarios and related innovation directions, Frank said that the following three areas may attract the interest of innovators:

The first is to standardize the protocol for asset on-chain. Standardized protocols will enable seamless integration and interoperability between different RWA platforms, which will promote efficient transfer and exchange of cross-platform assets.

Second, strengthen security and privacy measures. With the advancement of blockchain technology, such as improved consensus mechanisms (e.g., proof of stake), privacy protection technologies (e.g., zero-knowledge proof), and advanced cryptography, the security and privacy of RWA platforms will be enhanced. This will enhance investor confidence, mitigate cybersecurity risks, and address regulatory issues related to data protection, promoting the adoption of RWA in the traditional financial ecosystem.

Third, apply AI and data analysis to the RWA platform. This will enable advanced data processing, risk assessment, and predictive modeling. AI-driven algorithms can analyze large amounts of data, identify patterns, and provide valuable insights for investment decisions, risk management, and asset valuation. This integration will improve operational efficiency, improve investment strategies, and reshape traditional financial analysis.

Regarding the development of RWA-related innovations in the Hong Kong market, Frank analyzed: "Hong Kong has the potential to play an important role in the global adoption of RWA platforms and technologies. As one of the world's three major financial centers, Hong Kong has excellent connectivity, resources, talents, mature financial infrastructure and regulations, a large number of Web3 companies and ideas. At the same time, Hong Kong also has a mature investor base, which provides a favorable and solid environment for the adoption of RWA. More importantly, Hong Kong is a gateway to Asia and other regions. Its strategic location and strong international connections may help the RWA platform enter the Asian market on a large scale.

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