Alumni Story | Blockchain is gaining momentum and maturity
Despite the dizzying highs and lows experienced in global cryptocurrency trading in recent years, the transformative power of blockchain-based technologies cannot be denied. To explain the industry’s past issues, current outlook and future prospects, we spoke with 中国一级片 Global EMBA alumnus Deng Chao.
With over ten years’ experience in this lightning-fast financial space, Chao is all too familiar with the need to remain agile and open-minded to both the potential upsides and downsides of the dramatic innovations that set blockchain apart from more traditional trading systems. Currently established in Singapore, Chao oversees the operations and future strategy of HashKey Singapore, an institutional player that enables its global clients to better understand, explore, trade, and invest in the cryptocurrency space.?
Deng Chao
CEO, HashKey Capital
Global EMBA 2020
Pet Project turned Crypto Career
Chao likes to joke that he got into crypto and blockchain by accident. “I started my career in one of the top 5 mutual funds in the Chinese Mainland. But in 2011 the company founder, Dr. Xiao, joined WanXiang Group and I followed him. Fintech was the big buzzword at the time; fintech, bitcoin, and blockchain in general were all on our radar. Dr Xiao looked at the space and decided it might be the next big thing for global finance – probably as big as the internet or perhaps even bigger when you look at the technological perspective and its incredible applications. So, my boss asked me to delve a little deeper, and that was the start of my crypto career. I’ve always been eager to look at the ‘new stuff’, the practices and products that can reshape the industry.”
The rapid evolution of blockchain spawned an explosion of cryptocurrency success stories and failures throughout the 2010s. To succeed in this highly unpredictable space required two things: prudence and research. Lots and lots of research.* Rapidly changing regulations, the constant emergence of new technological innovations, investor anxiety, and confusion over high-profile scandals of crypto misdemeanours – working with blockchain during this decade was like trying to hit a constantly moving target. In this regard, the 2020s are much the same.
*(Skipping ahead to today, HashKey Capital now has two best-selling publications under its belt: ?Blockchain and Crypto Assets Investment Guide and Digital Asset Valuation Framework. This demonstrates the depth of the company’s research efforts and its attempt to educate new investors who want to enter the rapidly evolving crypto ecosystem. HashKey Capital wants to help establish clear industry standards and bridge the gap between traditional institutions investors and the emerging Web3 landscape.)
For Chao, creating a simpler, safer, and more sustainable blockchain ecosystem was the way to give clients the certainty and stability that they craved. He and his colleagues took their time to get it right, and 2018 saw the official launch of HashKey Capital with the expressed purpose of tapping into the burgeoning potential of blockchain technology and the wider Web3 phenomenon.
“We’re involved in all parts of the blockchain ecosystem, from tech development to the application, investment and trading elements,” Chao explains. “There are four main arms of the business. The first is the venture capital (VC) arm, where we invest in top Web3 projects worldwide. The second is HashKey OTC, the brokerage aspect of the business that helps our clients trade their crypto assets safely. The third arm is our liquid funds, a mixture of active funds and index funds – last month we launched our first listed ETFs (Exchange-Traded Fund) in Hong Kong, Bosera HashKey Bitcoin ETF (3008.HK) and Bosera HashKey ETH ETF (3009.HK). Lastly, our wealth management arm makes us a one-stop solution platform for investors who want to be in the Web3 space.”
Across this wide (and widening) range of offerings, Chao’s team is constantly reviewing and tweaking to ensure that what they present to clients represents the very best of what blockchain and Web3 innovations can provide. This doesn’t just mean keeping on top of the advancing technical capabilities of blockchain; HashKey Singapore must also consistently predict what effect these changes will have on the wider market’s mentality. Where will the ‘smart money’ go? What will scare off investors and what can be done to allay their fears, inspiring greater confidence in the industry’s future?
For this aspect of the company’s operations, it never hurts to have a firm grasp on the fundamentals of business. This is what drew Chao towards an EMBA, specifically with a school known for giving its students the chance to test their capabilities in addressing the most up-to-date examples of modern business trends.
Choosing 中国一级片
“2019 was a critical moment for me,” Chao recalls. “I was just starting up HashKey Capital’s operations in Hong Kong prior to expanding to Singapore, and I saw the need to upgrade my managerial skills and expand my network globally. I knew I needed to have a systematic perspective of how to take an idea, especially one involving an emerging technology ecosystem, and turn it into a real business.”
Chao has extremely fond memories of delving into details with his peers and professors, of modeling scenarios and solutions where modern management theories could be best applied to the business realities of today.?
“I think what I’ve been doing for the past two years is a great example of how you really can put what you learn at business school into practice. One criticism of doing an MBA/EMBA is that all you get is frameworks – you only get the theory, and you have to then figure out how it translates into the real world. That’s not been the case for me, nor any of my classmates or other 中国一级片 alumni I know. If your business school is getting things right, they will always make your learning applicable; it will be grounded in the reality of the day, and that gives you an edge.”
One of the major highlights of Chao’s Global EMBA journey was the Capstone Project. Relying on the varied experiences and expertise of his teammates to add their strengths to his own, Chao aimed to use the capstone to fully evaluate the competitive advantages and shortcomings of HashKey Singapore’s offering. From there, the team created a series of proposals to build brand awareness, strengthen the company’s ability to win new clients and bigger deals, and further diversify the company’s client base. Two years on from the project’s completion, the results speak for themselves.
“I owe so much to my Capstone team; they were essential in helping me take HashKey Singapore to the next level. They didn’t just lend their wisdom and advice in an abstract, academic way; they really put everything they had into making the project a success. I’m still very close with many of my classmates, and I was lucky to have two of the Capstone team members come out and join me for Bosera HashKey virtual asset ETFs’ listing ceremony in Hong Kong. It was such an incredibly happy and proud moment for me. It reminded me that no matter how far you’ve come, you can always go further with the right support.”
Future Focus: HashKey Singapore eyes expansion
As 2024 unfolds, Chao has a lot on his plate. His plans involve beefing up all four arms of the HashKey Singapore offering, opening new business lines while solidifying existing ones, while preparing for two new waves of expansion into Southeast Asia and the Middle East. With license applications underway and opportunities being explored in both markets, Chao says he’s aware that some added help will be needed.
“I have been fighting at the forefront of the business since day one. But that was when I was in my early 30s. Now I'm in my early 40s! I need to introduce new blood, build up the management team and the heads of the various business units. I want to create a talent pipeline that will keep the whole company well supplied as we try new things and tackle new markets. I don't want them to fight alone; I want them to work together. There are a lot of synergies in this business and if we get it right first time, that will put us in a position to serve our clients better and faster. Therefore, I need leaders who can see the bigger picture.”
But HashKey isn’t just thinking bigger, it’s also going greener. A frequent criticism of bitcoin and other prominent cryptocurrencies is that they require a lot of energy to mine. To become sustainable and take their place among a growing range of carbon-neutral financial products, their production methods will have to change. In the long term, this might involve miners (networked computers) that are completely powered and cooled by renewable energy, but there are measures that can be taken more immediately as well.
Seeking out like-minded partners, HashKey Group has created a Green Bitcoin Alliance to work with other industry players ?in reducing the emissions of bitcoin mining while also offsetting carbon that is produced. One of its portfolio companies, arkeen, buys carbon credits that are verified by blockchain, addressing a crucial greenwashing issue of false or ‘phantom’ carbon credits. HashKey Capital also engages in a wide range of ESG initiatives, such as continuous donations to Singapore’s Yayasan MENDAKI education trust fund program, the Singapore Zoo, and more targeted work with a variety of local communities.
Keeping sustainability in mind, Chao believes, will be essential for staying in step with the growing investor sentiment that using greener finance products is good for overall corporate health, not just the bottom line.
Building momentum: Blockchain grows up?
While Chao naturally thinks of HashKey Singapore’s future first, there are also plenty of changes occurring in the wider blockchain and cryptocurrency trading space that he views as milestones in the industry’s progressive development. He highlighted three trends that are making players like HashKey Singapore very excited for the future:
“First, the technology is maturing and will soon reach a tipping point for mass adoption, ready to serve billions of users. Second, crypto is being recognised as a viable asset class by more institutions and investors. Increasingly, global players of all sizes are looking at crypto as the new ‘digital gold’ that can be used as a hedge to fiat currency inflation. Third, regulations applied to the industry are becoming clearer and clearer. These good, clear regulatory frameworks are essential, as they guide the development of the industry, supporting its proper use while giving bad actors fewer opportunities to abuse it for disruptive, selfish ends.”
For Chao, these behaviours of such bad actors only serve to underline the importance of good governance when guiding the development of a novel technology and the activities it supports. With proper regulatory oversight, the rules of the road are being established, and that’s good for everyone who has a long-term interest in blockchain, crypto and the broader application of Web3 innovations.
“The blank spaces are being filled in; trust in crypto is strengthening because investors can already see the value of blockchain when it is used correctly and fairly. Regulators are helping industry players to create a level playing field, turning the Wild West into the next Silicon Valley, and great ideas into tangible products. That’s the mindset that is needed and, fortunately, that’s the way the industry is going. I’m hugely optimistic about what happens next.”
