Wu Jiezhuang: Hong Kong's position as a global digital asset hub can be strengthened through three aspects: "DAO regulation, legal validity of smart contracts, and a regulatory framework for DeFi"

TechFlow, December 20 — Hong Kong Legislative Council member Ng Kit-kwong posted on social media stating, "To further strengthen Hong Kong's position as a global digital asset hub, I believe we should focus on the following three areas:

1. DAO (Decentralized Autonomous Organization) regulation — In November 2024, the world's first DAO case was heard and ruled upon by a Hong Kong court, marking Hong Kong's leading position in this area. Currently, there are over 100,000 DAOs globally managing hundreds of billions of dollars in assets. Establishing a clear legal framework would provide definitive guidance for the industry and help attract more DAOs to establish in Hong Kong.

2. Legal validity of smart contracts — Clarification is needed on whether smart contracts can be regarded as legally binding agreements, while establishing governance structures equipped with 'emergency response mechanisms' to handle unexpected incidents.

3. DeFi (Decentralized Finance) regulatory framework — While adhering to the principle of 'same business, same risk, same rules,' the unique operational models of DeFi must also be considered. Efforts could begin with clarifying legal definitions, ensuring smart contracts have protective mechanisms, and enhancing international regulatory cooperation.