Aptos CEO visits the U.S. Congress: Regulatory clarity is a watershed for the digital asset ecosystem

Conference highlights:

• Aptos CEO emphasizes: Tokens are the core of blockchain infrastructure

• Clear regulation is key to maintaining innovation and retaining developers in the United States

• Aptos has been implemented in multiple real-world scenarios such as payment, identity, finance, and entertainment

• Blockchain can be used in remote areas to achieve the payment experience of offline interaction and online chain

On June 5, Aptos CEO Avery Ching appeared at a U.S. Congressional hearing and testified on the important topic of American Innovation and the Future of Digital Assets: From Blueprint to Functional Framework, calling for a clearer regulatory framework for the digital asset market.

Avery’s speech was very informative and easy to understand. I strongly recommend Web3 investors and developers to watch the full replay: https://www.youtube.com/live/14UhCiMTn0Q?si=OIELerblod4xlFzM

To help everyone quickly get the key points, Movemaker compiled the main content of Averys opening speech and QA session, which are excerpted below (the content has been lightly edited and streamlined to retain the core points).

Key points of the speech: APT is the financial infrastructure of the next generation of digital economy

Members of the committee, thank you for the opportunity to testify before us. My name is Avery Ching and I am Co-founder and CEO of Aptos Labs. Aptos Labs is the RD team behind the Aptos Blockchain. Headquartered in the United States, we are proud to contribute to innovation and job creation in the United States.

In 2021, I founded Aptos Labs to drive the next era of the Internet, starting with building a global, scalable, and highly secure blockchain network that will ultimately transform payments, commerce, and digital identity.

Aptos is a high-performance, permissionless L1 blockchain designed to support internet-scale applications and billions of users.

Unlike centralized networks, applications (dApps) are built on distributed networks that are jointly participated and maintained by validators, developers, and users. Digital assets and tokens are essential to the operation of distributed networks, providing incentives and governance mechanisms to keep the network running securely.

First, Avery emphasized in his testimony that APT, as the native token of APT, is not a speculative product in the traditional sense, but the core element on which the entire Aptos network operates, and it has three key responsibilities:

Protect the network and record transactions on the blockchain. Users can choose validators to lock APT (commonly known as Staking) to protect the network from attacks by malicious actors. APT tokens are also used to reward validators for recording transactions truthfully.

APT holders can propose and vote, ensuring decentralized decision-making.

APTs are used to pay transaction fees. Although they are small amounts, they serve as a safeguard against spam transactions, ensuring that the network remains secure and efficient.

Security, decentralization, and practicality are what make blockchain networks like Aptos able to support real-world applications at scale. Applications on blockchain are no longer theoretical, with over 1,000 developers building on Aptos and hundreds of applications providing value in areas such as finance, commerce, entertainment, and infrastructure.

The world’s largest financial institutions, such as BlackRock, Franklin Templeton, and Apollo, have launched regulated tokenized money markets and funds on Aptos, which enables greater transparency, real-time peer-to-peer trading, and improved operational efficiency.

Secondly, Avery started from the perspective of the application layer, indicating that whether it is Pact providing on-chain loans for developing markets, or NBCUniversal using Aptos to build a fan interaction system, or Jellybean putting physical goods on the chain, these applications not only demonstrate the high scalability and composability of Aptos, but also confirm that blockchain is becoming the operating system of the new Internet:

PACT Protocol is a credit protocol based on the Aptos blockchain for licensed money lenders in emerging markets. The platform allows these money lenders to provide loan services on the blockchain, providing transparency and efficiency for both money lenders and borrowers. PACT Protocol has cumulatively issued more than $1 billion in loans, helping small businesses get capital faster, allowing them to purchase equipment, open a store or invest in clean energy.

Aptos also enables new forms of engagement in entertainment and commerce, such as issuing collectible digital tickets without the involvement of intermediaries, significantly reducing costs while driving loyalty and fan engagement.

Aptos has a multi-year partnership with NBCUniversal to reimagine the fan experience through blockchain-powered real-world experiences, loyalty programs, and interactive games.

Brands like Jellybean use Aptos to combine physical products with blockchain records, enabling immersive customer experiences and greater consumer trust through traceable, verified supply chain data.

These use cases are just the first step in a radical transformation of the Internet. Just as the Internet has transformed our daily lives, blockchain networks will form the core infrastructure of the digital economy, providing a transparent, interoperable, and innovative system.

Finally, Avery expressed his views on developing and protecting developers:

Tokens play a critical role in every application on the blockchain. For blockchain innovation to grow responsibly in the United States, developers need clear, unambiguous regulatory guidance on token issuance and distribution.

We thank the Commission for its leadership on market structure and legislation, and for developing consistent rules around token issuance and distribution to ensure networks like Aptos can operate as designed, that American developers can innovate while remaining compliant and competitive, and that regulators can implement meaningful consumer protections.

The infrastructure is in place and the regulatory clarity will solidify our leadership in the next phase of the Internet. We stand ready to work with the Commission, and we thank the Commission for its leadership!

Question and Answer Session

To help readers grasp the key points of the hearing more quickly, here are the five key points of the QA session as distilled by Movemaker:

1. Actual value and function of tokens

Q: What is the value of digital assets today? What potential value do they have for small businesses in the future?

Tokens are the way to interact on the blockchain. They provide governance functions, staking functions, i.e. security, and the opportunity to make payments and represent digital identities around the world. We are starting to see new entrepreneurs adopting blockchain and new ideas blossoming in the blockchain space, such as gaming projects, sports projects.

I think this innovation is important not only in helping American developers bring these products across the U.S., but more broadly, making them more accessible around the world.

Q: How do you explain “What is Crypto” to a beginner?

I want to acknowledge up front that the way we describe digital assets right now is just a very neutral term: to perform use cases that are very difficult to achieve in the traditional world, like how to govern, how to stake, how to support payments in a global and open world, and so on.

There is no other technology today that can support these use cases. So Crypto is really a global infrastructure, just like when we think about electricity or roads, that any application can be built on top of. And tokens are the lifeblood of that infrastructure.

What is Crypto? Probably the simplest way to describe it is a utility token that allows you to make payments, govern, transact, and have a digital identity on a trustless and globally accessible infrastructure.

Q: What gives Crypto its value? How is it different from Pokemon cards?

It really depends on the token and what the token represents.

As for APT, APT is the native token of Aptos. It can be used to pay transaction fees, can be staked to ensure the security of the network, and can be used for governance functions.

2. Financial access to remote areas

Q: What effect will the bill have on the financial literacy of people in remote areas?

We are working very hard to support innovations, such as making blockchain usable without the internet.

So you can imagine a world where you could conduct transactions the same way even without the internet, and then at some point in the future when you use the internet, finalize those transactions on the blockchain.

So regulation was very helpful in getting this innovation into the United States.

Many projects we have worked with in the past, including ourselves, have struggled to understand confusing rules and regulations, spent a lot of time and resources trying to understand them, and were ultimately forced to issue tokens in the face of a lot of uncertainty.

Other programs don’t even have the resources that we have, and they’ve even had to work to move outside of the U.S. or find other ways to address this challenge.

In short, clarity will go a long way toward helping innovation happen in the United States.

Q: How to ensure the accessibility of digital assets? Especially in remote rural areas where Internet and financial knowledge are lacking, such as Hawaii

I think education is a big part of this. Last year, I attended the inaugural Hawaii Blockchain Summit and have been exploring discussions around the islands around the tokenization of driver’s licenses and using blockchain technology to support different types of value exchange.

However, I also share your concern that the lack of broadband access makes it difficult for many people in Hawaii to experience and benefit from this technology.

Earlier, I described how blockchain is going through a transformation where you can still interact without internet access, and then have those transactions confirmed on the blockchain only after the user has internet access.

So Aptos Labs is exploring these technologies from its own perspective to ensure that this can actually be achieved in the future.

3. User Privacy Protection

Q: If American citizens want to protect their privacy, how do you solve this problem?

Today, most blockchains support very transparent operations, which means that any transactions that occur will be fully accessible and visible to everyone. But it also means that you know that these transactions cannot be changed, reversed, or rolled back.

At the same time, we are very accustomed to privacy when buying a coffee or a sandwich. There are additional blockchain features being built, explored or already prototyped by Aptos Labs and other companies, that will support user privacy while complying with regulatory requirements.

So I think we can have the benefits of transparency and the benefits of privacy but within regulatory requirements.

4. The relationship between blockchain and agriculture

Q: As everyone jokes, what does Crypto have to do with agriculture? Why is Crypto so critical to the future of agriculture?

The payment infrastructure on the blockchain is more efficient than traditional payment methods. You can send money around the world at a fee of 0.01 cents and settle within one second.

Its not something thats limited to one sector or another. I think its critical for anyone who runs a business or a farm to be able to support this technology and build programmable applications.

Its not just payments, there can be other use cases, you can have multiple accounts at the same time, and combining these ideas will be very useful for running a business.

5. FTX incident and its relationship with US developers

Q: What do you think about FTX’s bankruptcy?

I think the lack of clarity in regulation really led to the FTX bankruptcy.

Q: How does a clear bill ensure that the developer community stays in the United States?

As an entrepreneur, I can say that launching a token in the U.S. is difficult. In 2022, we faced many challenges and a lot of uncertainty when launching our own token.

We already know that the Internet has produced many great innovations in the United States, from Netflix to Facebook to Amazon and Google, etc. I would love to see the next iteration of innovation from these entrepreneurs happen on Web3 and in the United States.

In order for that to happen, we have to have clear regulations. There are millions of programmers in the United States who are going to go elsewhere, to work in other fields because of the lack of clarity that exists in Crypto today.

Kesimpulan

From financial technology to decentralized identity, from entertainment marketing to global payments, Aptos has demonstrated the feasibility of blockchain technology in the real world. And Averys speech in Congress is a microcosm of Aptos promotion of the next generation Internet from the perspective of a builder. In the global competition for the next generation Internet operating system, Aptos CEO used a clear and rational voice to provide a coordinate system for developers and policymakers to build the future together.

About Movemaker

Movemaker is the first official community organization authorized by the Aptos Foundation and jointly initiated by Ankaa and BlockBooster, focusing on promoting the construction and development of the Aptos Chinese ecosystem. As the official representative of Aptos in the Chinese region, Movemaker is committed to building a diverse, open and prosperous Aptos ecosystem by connecting developers, users, capital and many ecological partners.

Penafian:

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