Wu Jiezhuang leads the China-Korea joint effort to break the Web3 deadlock

On March 23, the “Hong Kong–Korea Web3 Policy Advancement Alliance” was officially established.

This is not a conventional regional forum in the usual sense, but a cross-regional policy coordination platform advanced in a grassroots, community-driven way. The alliance was jointly initiated by Wu Chit Chōng, a member of the Legislative Council of Hong Kong, and Min Byung-deok, a member of the National Assembly of Korea and the drafter of the digital asset basic law bill.

When Hong Kong’s financial system capabilities begin to connect with Korea’s technological know-how and market momentum, the impact of this cooperation driven by key policy participants from both sides may not be limited to Web3 or AI itself, but rather extend to the underlying digital-asset operating structure.

Complementary strengths

For a long time, although Asia’s Web3 markets have been active, overall development has tended to appear relatively fragmented.

Hong Kong, building on a mature financial system, has continued to advance within compliance and regulatory frameworks—steadily improving its institutional foundation, from the virtual asset licensing regime to the stablecoin issuance mechanism that is about to be implemented.

Korea, on the other hand, is more driven by markets and technology. It has formed a highly active industrial ecosystem in terms of crypto asset adoption rates, trading activity, and application layers spanning blockchain and AI.

Wu Chit Chōng noted that Hong Kong and Korea have clear complementarities in the fields of Web3, artificial intelligence, and digital assets.

On that basis, this cooperation did not stop at the direction level—it directly landed on several key tracks: coordinated development of blockchain and AI, compliance pathways for digital assets, stablecoin mechanisms, and cross-border data flows.

These topics themselves are precisely the core components in today’s digital economy that are both highly constraining and also have an amplifying effect.

As these directions are gradually advanced, the way the two sides collaborate is also expected to shift from point-to-point cooperation toward more systematic cross-border pilot programs and mechanism alignment.

Rule-puzzle pieces

From a more macro perspective, behind this cooperation is a phase-based differentiation of the global digital asset rules framework.

The United States and Europe, relying on mature financial systems and regulatory experience, entered the rules-building stage earlier. From stablecoin regulation to overall institutional design, they have gradually formed their respective frameworks.

And Asia is not absent.

Whether it is Hong Kong advancing the virtual asset licensing regime, or Korea pushing for digital asset legislation, fundamentally they are both building regulatory systems tailored to their own market environments—though in terms of timing, they are relatively later than in the US and Europe.

But it is precisely this “timing gap” that provides greater room for adjustment for the late-moving regions.

Hong Kong and Korea respectively represent two paths: “regulatory capability” and “market vitality.” Once these two capabilities begin to connect, the significance is no longer only about policy communication—it is an attempt to construct a new combined approach.

More specifically, this alignment also corresponds to real needs: Korea’s active industries and capital require clearer compliance handoff pathways; Hong Kong’s improved financial infrastructure also needs richer business scenarios and additional sources of liquidity.

In this process, the role of Hong Kong’s “super connector” starts moving from concept to concrete action: by designing institutions and conduits, connecting the region’s technology and capital to a broader set of international markets.

Phase switch

If you stretch the time horizon, the appearance of this cooperation also corresponds to changes in the stablecoin development stage.

In past years, the industry’s core problem centered on “who will issue stablecoins,” with competition focusing on scale, liquidity, and credit.

As infrastructure gradually matures, the question starts shifting to the next stage: how these “on-chain funds” enter the real-economy system, and under what rules they will flow.

Different regions are providing their own paths.

• Singapore is exploring the on-chain tokenization of traditional financial assets through Project Guardian;

• Europe is unifying regulatory standards with the MiCA framework;

• The United States is beginning to restrict the “deposit-like” treatment of stablecoins, redrawing its financial boundaries.

The paths may differ, but the direction is consistent—stablecoins are shifting from “tools in the crypto market” to “financial infrastructure.”

Capital flow paths

Against this backdrop, the cooperation between Hong Kong and Korea will gradually show its effects in more specific capital-flow structures.

Traditional cross-border capital flows rely on multi-layer intermediary systems to complete clearing and settlement; the routes are complex and the costs are high.

But once stablecoins and the regulatory framework form a link, some capital flows may shift to being completed on-chain, thereby compressing intermediary links, improving efficiency.

This change will not replace the existing system in the short term, but it will gradually open up a new pathway.

When a pathway emerges, the structure begins to loosen.

If rule coordination continues to advance on a regional basis, what it brings will not only be efficiency gains, but also possibly changes to capital pricing and clearing-and-settlement logic—structures that were previously concentrated in a single system may start to appear as possibilities that are more dispersed.

This does not mean that one system is being replaced; rather, it means that when capital flows across regions, it will have more alternative conduits to choose from.

On the eve of the pilot

There is another detail worth noting: this cooperation is not a traditional intergovernmental agreement in the usual sense, but rather unfolds in the form of grassroots policy coordination.

This means it does not need to achieve highly unified institutional design from the outset; instead, it can advance step by step through more flexible pilot programs and collaboration—building consensus from practice, and then, in turn, influencing rule-building.

Many evolutions of financial infrastructure often happen exactly through this kind of route.

From this perspective, this alliance is more like a preemptive “structural pilot.”

What it is trying to answer is a more long-term question: once stablecoins start entering the real economy, and when there is the possibility of alignment between different regulatory systems, will the ways funds move gradually shift from a “single center” to “parallel operation across multiple regions”?

If this trend is validated, then what today appears to be regional cooperation may affect not only Hong Kong or Korea, but the way the entire digital asset system operates.