Risks Mitigation Strategy Unexpected changes in policies due to political changes It is by design that many blockchain services being rolled out are crossborder in nature, needing the support and consent of more than one government. This is a mitigation strategy as it ensures any sudden changes in one country won’t impact the continuity of the service since the consent of the counterpart in the other country would also be needed to implement any changes. Involvement of multiple stakeholders may slow down and delay progress in roll-out of services While involvement of multiple governments/stakeholders may make a service/concession more difficult to unwind/change, it brings with it its own set of challenges, such as delays or slow progress in roll-out of projects due to challenge of having to take into consideration varied preferences and readiness. Nevertheless, mitigation strategies here include rolling-out services in phases once there is mutual agreement on important elements and expand the service progressively as agreements reached on other matters. Volatility in digital asset prices Price volatility may create uncertainty and concern among participants, but unlike many blockchains not backed by any real-world use cases but is merely a means for speculation, Zetrix is built specifically to support real-world use cases and as such there will always be real-world transactions happening on the Zetrix blockchain, thus generating demand for tokens regardless of market sentiment. Limited access to expertise and talent in the development of cutting-edge technologies in the ASEAN region, particularly in the areas of AI and blockchain and robotics The Group set up its ASEAN China AI Lab to ensure access to the latest and best technologies being built by leading Chinese providers. In collaborating with these entities through this G2G-endorsed approach, these new technologies can be brought to the region and customised to meet the local cultural, social and economic norms of the region, ensuring that solutions of real-world utility can be deployed to the market for immediate mass adoption. Opportunities Leveraging Strategy A new impetus in blockchain development with establishment of crypto-friendly policies such as in closely-watched markets like the U.S. and growing global acceptance of blockchain solutions for cross-border payments and asset tokenisation. Global regulatory environment towards cryptocurrencies and blockchain are turning friendlier, led by the U.S. The Group aims to take advantage of the more conducive environment to roll-out more products and services targeted at all levels of stakeholders in the blockchain community be they developers, investors, consumers of applications, etc. In particular, the growing interest and acceptance globally in the use of stablecoins for cross-border payments as well as the tokenisation of real-world assets is opening new opportunities for the application of blockchain technologies in financial and capital markets. As an established and trusted Web3 platform, Zetrix is well positioned to be the preferred ecosystem in the region for the deployment of such applications, especially given the previous introduction of products such as, stablecoins, digital bank guarantees, digital ID verification services and more. Increasing global adoption of digitalisation of government documents, led by calls from multilateral bodies like the United Nations (“UN”). Promote the use of blockchain, and Zetrix more specifically, among governments as the ideal platform for digitalisation of such documents, given the inherent advantages of blockchain in facilitating such applications. MANAGEMENT DISCUSSION AND ANALYSIS (cont’d) 32
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