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Hong Yea, co-founder of GRVT, believes that despite skepticism from some crypto proponents, incoming U.S. President Donald Trump may show genuine interest in a crypto-friendly environment.
China Unlikely to Shift Stance on Crypto
While some crypto proponents are skeptical that incoming U.S. President Donald Trump will honor his pre-election pledges, Hong Yea, co-founder of GRVT, argues that the inclusion of pro-crypto figures like Elon Musk in policy discussions and his son’s involvement with decentralized finance (defi) through World Liberty Financial indicate genuine interest.
Yea also told Bitcoin.com News that Trump’s social media platform, Truth Social, has a reported plan to acquire a crypto exchange, which suggests he might indeed push for a crypto-friendly environment. The GRVT co-founder, however, concedes that Trump’s willingness to honor his campaign pledges will “depend on how much legislative and regulatory support he can get.”
Regarding speculation that China will be forced to alter its stance on crypto should Trump honor his election promises, Yea suggested that this is unlikely to happen, especially now that Beijing is “trying to stabilize its forex outflow.” To back this assertion, Yea cites the announcement of new rules requiring banks to flag risky trades, including those involving cryptocurrencies.
These rules are expected to make it more difficult for mainland investors to buy and sell digital assets, thus pushing China further away from cryptocurrencies. Turning to the regulation of cryptocurrencies in general, Yea said increased regulatory clarity in countries like the U.S. will encourage further mainstream adoption. Furthermore, clear regulations will make interactions between traditional finance and cryptocurrency platforms easier and less cumbersome.
In the rest of his answers shared with Bitcoin.com News, Yea discussed the challenges of using blockchain for high-frequency trading and large-volume transactions. Below are the GRVT co-founder’s answers to all the questions sent.
Bitcoin.com News (BCN): The crypto market surged on the back of Donald Trump’s victory in the just-concluded U.S. Presidential election, with Bitcoin recording an $108,000 all-time high. Many believe Trump’s pre-election promises triggered the crypto market surge, though it is worth noting that Trump did not go into details while making those promises. A segment of the crypto industry thinks most of his promises were politically motivated. What’s your assessment of Donald Trump’s promises to the cryptocurrency industry, and do you think he’ll follow through on them?
Hong Yea (HY): Given Donald Trump’s history of following through on his campaign promises, there’s reason to believe he’ll act on his crypto commitments. His move to include pro-crypto figures like Elon Musk in policy discussions, and his son’s involvement with DeFi through World Liberty Financial, show a genuine interest. Recent moves by Truth Social to acquire a crypto exchange also back this up. While there’s always skepticism about political promises, Trump’s track record and the visible steps taken by his family and associates suggest he might indeed push for a crypto-friendly environment. However, the extent and speed of these changes will depend on how much legislative and regulatory support he can get.
BCN: It’s clear that government involvement in crypto is primarily driven by the need for regulation. Given that centralized finance (cefi) and decentralized finance (defi) are at the heart of crypto’s interaction with the mainstream, they are the sectors most directly impacted by the regulatory oversight. How would you rate the current crypto regulation environment, especially with a focus on cefi and defi protocols?
HY: The regulatory environment for cryptocurrencies, particularly for CeFi and DeFi, is still evolving. While the EU’s MiCA regulation marks progress, we’re only at the beginning of comprehensive crypto regulation. I expect more clarity, especially from countries like the U.S., which will likely encourage further mainstream adoption by providing a safer operational framework.
Currently, the lack of clear guidelines has made interactions between traditional finance and crypto platforms cautious. CeFi has been the primary focus of regulation due to its centralized nature, but as DeFi grows, it will also come under regulatory scrutiny, albeit with different challenges due to its decentralized structure.
The crypto industry benefits from relatively lenient regulations for now, but as it integrates more into traditional finance, we can expect more stringent rules aimed at balancing innovation with user protection and market stability.
BCN: What are the scalability challenges of using blockchain for high-frequency trading and large-volume transactions, and how can these be addressed?
HY: The scalability challenges of using blockchain for high-frequency trading and large-volume transactions are mainly due to limitations in throughput and latency.
Throughput limitations arise because traditional blockchains like Bitcoin and Ethereum have low transactions per second (TPS). Every transaction must be validated by multiple nodes to ensure security, which slows down processing. This low TPS is inadequate for high-frequency trading, where rapid execution of numerous transactions is essential.
Latency issues further complicate matters. High-frequency trading strategies rely on executing orders in fractions of a second to exploit market opportunities. The time it takes for transactions to be propagated and confirmed across a decentralized network introduces delays that are unacceptable in this context. Purely decentralized exchanges often cannot provide the low-latency environment required for such fast-paced trading.
To address these challenges, GRVT has implemented a hybrid model. We keep the order book and matching engine off-chain on centralized servers, which significantly reduces latency and allows for rapid order execution. Once orders are matched off-chain, the settlement occurs on-chain, ensuring security and transparency by leveraging blockchain’s immutable ledger.
This approach effectively overcomes both throughput and latency limitations. By combining off-chain processing for speed with on-chain settlement for security, we can theoretically achieve up to 600,000 TPS. This makes blockchain technology viable for high-frequency and large-volume trading, bridging the gap between decentralized technology and the demands of modern financial markets.
BCN: What are the regulatory hurdles and compliance challenges associated with implementing blockchain-based solutions in traditional finance?
HY: It is the lack of certainty and clarity in regulations across many countries. While some countries are developing better frameworks, many jurisdictions still don’t have clear rules, which creates challenges. This ambiguity can be difficult for pioneers like us in regulated DeFi, especially when competing with entities that operate without licenses. User acquisition becomes tougher due to additional burdens like KYC and AML screening and the need for strict controls before onboarding clients.
However, these challenges also present opportunities. Some countries offer sandbox regimes where we can work directly with regulators to shape future regulations. By engaging in these programs, we help establish clearer guidelines that benefit the entire industry. Despite the difficulties, adhering to these regulations makes us stronger by building a more secure and trustworthy platform for our clients.
BCN: You are the co-founder of GRVT, a hybrid crypto services platform. Can you briefly tell our readers about GRVT and what the platform intends to offer the crypto community? What’s the need for a hybrid exchange when we already have defi?
HY: GRVT is the world’s first regulated DEX that operates as a self-custodial centralized exchange (CEX), merging the best of both worlds for a secure, compliant, and user-driven trading experience. DeFi is here, but it’s far away from becoming mainstream, it is a shame for DeFi’s many great features and capabilities that could bring greater financial inclusion to more people. GRVT is here to change this.
While decentralized finance (DeFi) has revolutionized the crypto space, it currently accounts for only about 15% or less of the trading volume, with centralized exchanges handling over 85%. This disparity exists because DeFi platforms often face significant limitations:
First is complexity and usability issues. DeFi platforms can be difficult to use, especially for newcomers. Users often struggle with deposits, managing wallets, and dealing with gas fees.
Second is security concerns. While DEXs offer self-custody, they are not immune to smart contract vulnerabilities and hacking risks.
Third is lack of mainstream adoption and liquidity: Without widespread institutional participation, DeFi platforms often suffer from lower liquidity compared to their centralized counterparts. That’s why we take a compliant and licensed approach from day 1.
While DeFi has brought significant innovations to the crypto space, it still faces challenges that hinder mainstream adoption. DeFi platforms can be difficult to use due to complex jargon, gas fees, and the need to navigate on-chain transactions, which adds layers of complexity for average users. This complexity can be a barrier for those not deeply familiar with blockchain technology.
At GRVT, we’ve addressed these challenges by redesigning the DeFi user experience to resemble that of any traditional financial application. We’ve made the DeFi elements “invisible” to ordinary users, eliminating technical barriers and simplifying the process. Users can engage with our platform without needing to understand blockchain intricacies, making it accessible to everyone.
To date, we surpassed 30,000 KYC-verified users registered on GRVT, signaling a strong initial user base poised for substantial trading activity—a figure notably higher than that of other industry players at their initial launch.
Users can also start seamlessly transferring assets between GRVT and CEX accounts or crypto wallets through Proxy Bridge now, an innovative solution designed to make cross-chain transfer effortlessly by XY Finance, a leading cross-chain DEX and bridge aggregator. We are also the first to introduce gas-free cross-chain transactions from a CEX to a DEX.
And security is paramount in the crypto space. GRVT combines the self-custody security of blockchain technology with traditional security measures like passwords, two-factor authentication, and whitelisting. By providing multiple layers of protection, we offer a robust security framework that safeguards users’ assets while giving them full control.
Lastly, being the first regulated DeFi exchange is significant. It means we can open doors to other regulated entities, including licensed funds and institutional clients that have historically faced difficulties interacting with non-regulated DeFi platforms. Our compliance with regulatory standards not only builds trust but also facilitates broader participation from traditional financial institutions, bridging the gap between conventional finance and the decentralized world.
BCN: What will your firm do differently to assure potential users that they will not be exposed to the kinds of risks they were exposed to by using centralized exchanges that failed?
HY: At GRVT, we protect our users from the risks associated with failing centralized exchanges (CEXs) by combining the strengths of both Web3 and Web2 security measures.
The main issue with CEXs is counterparty risk—if the exchange fails, users can lose their funds because the exchange holds their assets. GRVT eliminates this risk by offering self-custody of assets. Your funds are stored in smart contracts on the blockchain and are accessible only by you through your private keys. This means that even if something happens to GRVT, your assets remain secure and under your control.
While decentralized finance (DeFi) platforms offer self-custody, they can be vulnerable to hacking and phishing attacks. To mitigate these risks, we incorporate traditional security measures like passwords, two-factor authentication, biometric verification, and wallet whitelisting. These additional layers of protection help prevent unauthorized access and enhance overall security.
By combining self-custody with robust security features, GRVT provides a more secure trading platform than traditional CEXs or typical DEXs. Our hybrid approach ensures you have full control over your assets without sacrificing security or user experience.
BCN: Asia is seemingly dominating defi with seven of the top 20 countries located there. China’s defi market is also said to be expanding, with investors embracing decentralized finance solutions, despite the country’s existing cryptocurrency ban. Can you highlight some of the key factors driving Asia’s defi dominance?
HY: If we think about DeFi’s essence, it’s disrupting what TradFi can’t offer for many retail customers. In this sense, it may shed some light on why Asia is leading:
Tax benefits compared with EU or USA
Less sophisticated foundation of TradFi offerings to many users in the emerging markets, for example, in South East Asia
Cultural element: stronger speculative culture in the likes of China and Korea
In terms of China’s DeFi development, it could look like any other industries – China has its own version of localized adoptions, for example, social media, forex, banking etc. The country is very proactive in developing its own blockchain advancements, as well as its own CBDC (digital yuan China’s local currency), so DeFi could be another example of China having its own “version” despite the crypto ban, as long as there are local demands within the country.
BCN: Considering the growing adoption of cryptocurrencies and the potential shift in U.S. policy under Trump, the question remains whether China will lift its crypto ban or ease restrictions to allow the return of crypto users and solutions. What is your perspective on this?
HY: This is a broad topic. But in short, I don’t think China will lift the ban in the foreseeable future when the country is trying to stabilize its forex outflow.
In fact, China’s foreign exchange regulator just released new rules over the new year that require banks to flag risky trades, including those involving cryptocurrencies, which would make it more difficult for mainland investors to buy and sell bitcoin and other digital assets.