Huobi is an international bitcoin exchange based in Singapore and with offices in Hong Kong, the United States, Korea and Japan. They are planning to move their headquarters to Hainan, China, the country they were founded in.
With China shutting down cryptocurrency exchanges within the country, Huobi has found itself at a crossroads and has decided to pivot towards research and development of blockchain technology, while still focusing on bitcoin trading internationally.
CoinJournal sat down with Huobi at the Consensus 2018 conference to talk about regulation, education, what Huboi is doing now and what happened with their SBI partnership.
CoinJournal: What do you think about the Ecosystem today and Huobi’s role in it?
Huobi: We are one of the first adopters and one of the pioneers in the blockchain industry. We started the company in 2013 so it has been running for five years now. Most of our competitors are speculators and tried to gain some money and cash out. But, we really wanted to build this ecosystem. So we decided to take a couple different approaches to achieve that goal. One is setting up this million dollar fund. Second, we set up the incubators in China. We have a 40,000 square meter office space. It is a massive space.
So, projects can come over and start a business, with all the resources and funding that we have. Hopefully, we will see some real adoption of the blockchain technology in the industry. And in the meantime, we’ve made some alliances. One example is we just made an alliance with Aelf’s Innovation Alliance. We added a couple other strategic partners too, including the including Michael Arrington, who’s the founder of TechCrunch and the managing director of Arrington XRP Capital and also there’s FBG, one of the cryptocurrency venture capital groups, who is also in the Alliance.
Together we want to build a better ecosystem.
CoinJournal: What companies are you looking to attract for your incubator?
Huobi: We don’t have a very specific appetite on what kind of projects that we want to put in the incubator. It is more about the adoption of technology. So, as long as we find a good fit with their own ecosystem, their own community, then we are more than willing to help them out.
CoinJournal: So what happened with SBI?
Huobi: I think we have a partnership with them. It’s also about alliances and about trying to be a better ecosystem. We were based out of China, and gradually wanted to be more globalized. We now have different offices and locations including Singapore, Australia, Japan in Tokyo, Korea in Seoul. Finding the right partners is very important for us.
SBI was one of the strategic partners that we found in Japan. So that same strategy will be applied to many different countries, we’re going to find the right local partners to help us expand the business.
CoinJournal: Do you still have a good relationship with them, even though they’re not building an exchange with Huobi anymore and they’re going to develop everything in-house?
Huobi: With the regulation and environmental change in Japan, I really like the company holding 100% control of their own IP.
CoinJournal: What do you think about the regulations developing in Japan at the minute? Do you think they are forward thinking, or do you think it’s going to stifle innovation in the country?
Huobi: Japan is creating a clear framework for regulating cryptocurrencies, which shows the country’s commitment to ensuring the safety of its citizens who are participating in the blockchain and cryptocurrency ecosystem. This, alongside other regulations, will better protect customers and bring a new wave in adoption.
CoinJournal: Have you come across any kind of regulatory hurdles when expanding? Because your expansion has been so huge as of late. Have you had any pushback from government regulatory bodies?
Huobi: We’re actually moving at a steady pace with the process of conversations with regulators in each market. We’re not like some of our other competitors who are just throwing around words. We’re moving at a pace according to the progress of each jurisdiction we have conversations with.
CoinJournal: What’s next for Huobi this year?
Huobi: We’re thinking this is a big year for education and a big year for building the ecosystem. And we are opening Huobi Hainan, that will be our new headquarters. We also have Huobi Capital, Huobi Labs. All different elements of the ecosystem that we are setting up. We try to attract the best companies and players in different space to work with, to set up the whole ecosystem and it’s not just for Huobi. We are one of the only companies to actually advocate for research and growth. We have our research institute, we have our media, all these internal institutions set up with the goal of creating a good market
CoinJournal: Obviously, you are a Chinese company. China has had its issues with cryptocurrencies. Do you feel that the Chinese government slowly warming to cryptocurrencies, or do you feel that it is still quite a hostile environment?
Huobi: Yes and no. We can’t walk around [the Consensus Conference] right now and talk about blockchain without talking about cryptocurrency. With blockchain, the technology part, China has always had very a positive attitude. Different authorities always seem to have a very supporting attitude for blockchain technology.
CoinJournal: Do you think you’ll be able to open up the exchange to Chinese customers again?
Huobi: Not until we have a yes from the government.
CoinJournal: Do you foresee that happening this year? There are a lot of rumors, that they will open up. Do you think that things will change this year?
Huobi: We are not in a position to answer that right now.
CoinJournal: Do you feel they are being more receptive than they were two, three years ago?
Huobi: They have a very similar attitude as other regulators, they’re learning. It definitely will help that they are learning from the best from our industry and from different practitioners as well.
CoinJournal: Yeah, that’s the impression I get, we work and communicate regularly with a lot of Chinese companies and they are all reporting that the government is becoming increasingly receptive.
Huobi: For a large part. I was at Ethereal and I was watching the people from World Economic Forum and even members of the EU parliament were talking about it. Everyone is focused on educating everyone at a policy level and really understanding what blockchain technology can do for their infrastructure because they don’t understand it.
They are probably only seeing the cryptocurrency part of it, and because of that are scared, or opposed to it. But there’s so much more education that needs to be done from top down that, right now, I don’t think there’s enough information for them to make those decisions. Which is why they’re engaging with so many different stakeholders within the community to really figure out what should be the policies and working with teams like [the alliance] to figure out what’s the right way and wrong way of establishing that. It’s really the only way that we can see crypto and blockchain having a future.
CoinJournal: It’s all about having that dialog.
Huobi: Right, and that’s across the world. You know, it’s not just for Huobi here, you know. Everywhere, in Europe, in Greece, there are all those countries where everyone’s trying to figure out more or less the same thing.
But for China, Hainan is actually a really interesting place to be because it’s going to be established as a free trade zone in China. So it’s going to be the next center. And that’s the president’s plans that are already out there. So, us moving there is actually really strategic, we can work on this incubation and we can work on building that ecosystem around that area of China.
CoinJournal: Do you think the community needs to a better job of working with people on education?
Huobi: Yeah, because if you think about it, even white papers are technical. They’re written by developers as if everyone is a developer. From the Facebook congressional hearings, we know that government is not savvy enough or they just don’t know enough or have enough information to see all the different aspects of the community. So, if they are more open to talking to people and understanding it, then obviously they’re going to become more educated to the point where they understand what the true implications are. So, it’s about educating the entire government and the entire country of citizens, and that’s massive.
The following interview was conducted by Oliver Carding and Cameron Carpenter at Consensus 2018 and has been edited for clarity and ease of reading. We have done our best to represent Huobi’s words as accurately as possible while still providing an entertaining and informative article for our readers.