InnoKOL | Jay Liang: Digital Economy Will Be Booming and Potentially Dominating in the Post-Pandemic Era

2020/04/29 Innoverview Read

On April 29th(UTC+8), we had a fascinating  conversation with Mr.Jay Liang, the Founder and Co-chairman of Hong Kong Blockchain Association,talking about his  more than 25 years experience in investment and deep insights on the development of digital economy.

Jokia: How would you describe yourself in three words? What’s your motto?


Learning, fighting, living.

Learning any new knowledge,Fighting against any injustice, Living a fruitful life.

Jokia: Can you please share more about your educational and professional background? And we’d love to hear what brought you to blockchain.


Although I had a BA in psychology from Brigham Young University and Master of Public and Private Management from Yale University, I always treasure my free-style self-learning experience in high school and college in China a lot more, which enable me to always stay open-minded and keep up learning. More a conventional investor (sometimes labeled as “Classic Investor” comparing to investors buying tokens without asking for fundamentals”), I started my career as a long fund manager in Etech Capital Group in San Francisco with focus in high tech in early 1990s. I co-founded OES Capital in Hong Kong as private equity fund with focus in natural resources late part of the first decade of this century, and last year, I co-founded GSR Matrix Fund with Mr. Sonny Wu, the Founding Chairman of GSR Ventures and GSR Capital, to invest into digital economy technology startups. 

Jokia: As a Veteran PE, VC and hedge fund professional with over 25 years in experience from Wall Street to Asia Pacific, what’s your opinion towards the stocks and oil sink again and again as recession fears batter markets and coronavirus spreads?


COVID-19 definitely caused dramatic changes on everything of human societies, economies, politics and geopolitical orders. Particularly, three major trends will have strong impact on economy worldwide in next one or two decades and the financial markets will be further disturbed along the way:


Number one: the accelerating decay of liberal world order dominated by the United States, and emerging multi-polarized world with US upfront but no longer dominating, China in the middle with some uncertainly, and EU the third, mostly following US on politics and partnering with China in trade. Unfortunately, we might see a sharp decrease of public goods at the global level, and instabilities might be the keyword for international relationship in next two decades.  We are facing both Kindle Berger Trap and Thucydides trap simultaneously according to Joseph Nye in his recent article “Power and Interdependence with China”.


Number two: the increasing domestic demands of social safety net in health care, basic incomes and economic equality. With only several exceptions like Germany, most of about 200 countries or independent jurisdictions, developed or developing discovered they are not well prepared for the pandemic or similar disastrous incidents. The pandemic further exposed the existing social problems of many developed countries, especially the United States for their lack of universally-available healthcare programs and basic welfare programs, as stated by Professor Colin Gordon in his article “COVID-19 Is Exposing the United States’ Ragged, Shameful Safety Net”.


Number three: the restructure of economy. While general consumptions in the physical world were substantially reduced and international trade will continue to wind down following the trend from last year, online activities are surging during the pandemic period, and will continue as a major trend. Digital Economy Will Be Booming And Potentially Dominating In The Post-Pandemic Era , automation will be speed up and AI will be universally applied. “the behavioral changes are already in motion to completely change the retailing landscape and commerce overall for years to come.” According to Forbes’ article “How COVID-19 Is Tranforming E-Commerce” published yesterday.


Recession is ongoing, and the oil price will be under pressure for a while as the productions continue and storage spaces run out. However, all central banks are reacting vigorously and huge liquidities are pumped into the market to sustain the asset prices, at least for a short period. The recovering pace later this year will be critical for the mid-term direction, most likely some corrections and retest the low in early March. And in the next two decades, investors might encounter a lot more turbulences from the financial market and physical world.

Jokia: How do you look back on 2019 financially? What would you say were the most important highlights and low points?


Chinese stock market in 2019 was not doing very well as Chinese economy was going through the transformation. However, US stock market was doing remarkably well with earning growth and reasonable liquidity. Comparing to 2020, 2019 would be a very calm year, and will be shadowed in memory by whatever happened within last 3 months.

Jokia: The financial industry is becoming ever more digitalized. What’s unique and game-changing about Blockchain technology for traditional financial industry? 


Yes, the financial industry has been transformed by digitization, and blockchain already brought a lot of innovations into the industry, particularly banking sectors. However, Libra from Facebook and DC/EP by China’s Central Bank will completely reshape the banking landscape by 1) cut-down the intermediaries, 2) reduce the time, labor and monetary costs, and 3) enable equal access to banking services through digital wallets to majority of the world population with 3 bn from Facebook and 1.4 bn + from DC/EP up-to-date with a potential high growth rate going forward.


For the capital market, security token will be the key to disrupt the traditional investment banking industries and provide equal accesses people to make investment and to raise capital. With fully implementation of blockchain technologies, capital markets can be fully automated, and disintermediation will make substantial progress, with more efficiency, transparency, equal access. In a way, blockchain revolutions are not only technology innovations, but also financial innovations and social movements, providing a solution to the problems pointed out by Thomas Piketty in his book “Capital in the Twenty-First Century”. 

Jokia: Could you disclose the unique opinions on opportunities and challenges for China’s digital currency revolution especially the Central Bank Cryptocurrency?


DC/EP is another Big Brother helping Chinese government to have more control over economy and over the society in general. But it might not stimulate the price climb of Bitcoin, because Chinese government will use DE/EP to track down all the spendings.And they now take  a neutral stand on BTC, but they definitely prohibit circumvention of the forex control.As DC/EP is strongly pushed out by Chinese government with its eocnomic mights, in short term, there are some good investment opportunities in payment system, wallet technologies. and cross-border transactions along the Belt-and-Road zones. The major challenges for DC/EP will lie in its birth: the credibility of Chinese Government, and the closing system discouraging innovations.

Jokia: How do you envision the future of the Hong Kong financial market? How will GSR Matrix Fund and HK Blockchain Association engage in moving forward the development?


Hong Kong has been the window for China ever since 1949, and has been the capital bridge between international investors and Chinese economy since 1978. Because of its free market economy and western legal system, Hong Kong became one of the top-three leading international financial center supporting the rapid growth of China. Hong Kong Stock Exchange also has done some good reforms to its listing rules welcoming high tech companies from China to be listed here. Particularly biotech firms without revenues or earnings are allowed to be listed since 2018, and companies with different classes of shares like Alibaba are also welcome since 2019. Hong Kong will become more important for China in the upcoming years while the US market turns less favorable for Chinese companies.


At the same time, Securities Future Commission of Hong Kong has also followed the latest trends of technologies. Late 2018, SFC issued the regulatory guideline for virtual asset fund management firm and brokerage firm, and also set up the regulatory frameworks for virtual asset trading platform (exchange). Last November, SFC further published the detailed Terms and Conditions for Virtual Asset Trading Platform inviting industrial players to apply licenses in Hong Kong. Early this year, SFC issued licenses to virtual asset management firms. We can definitely see SFC’s determination to encourage financial technology innovations and to develop Hong Kong as the financial center for digital economy.


Focusing on investment in next generation information technology such as artificial intelligence, blockchain, cloud computing, big data and internet-of-things (ABCDI), GSR Matrix Fund headquartered itself in Hong Kong to take advantage of the free market economy and common law system in Hong Kong as the world leading financial center on one side, and to invest into the entrepreneurial economy in Greater Bay Areas leading by Shenzhen, all over China and the Asia Pacific Areas. We do see a great future in these industries here.


Hong Kong Blockchain Association is an open exchange and education platform to connect China and the world for blockchain entrepreneurs, investors and policy makers. We already have couple of thousand industrial players in our wechat groups, and we expect to grow rapidly in next a few years. We have regular offline events, and also just started our online educational platform last month. We welcome everyone to join our wechat groups, follow our wechat official site: HKBA, website:, and Facebook: Hong Kong Blockchain Association.

Jokia: We’ve noticed that you are an active speaker on trade, public policy, geopolitical issues, and frontier technology investment. What’s your benchmark to select the top-tier conferences?


Top-tier conferences should have 1) good topics, 2) good speakers including industrial leaders, policy makers and also investors, 3) good quality audience, 4) good publicity for the events, so the messages from the speakers can be well conveyed and received by the communities. Look forward to speak in a conference by InnoKOL.