When it comes to the OTC market, the biggest headache for regulators is the lack of transparency. Back then, when Soros shorted the Thai baht, the large positions he and investment banks traded privately over the counter were completely invisible to the Bank of Thailand. They only saw their opponents as some retail investors, but little did they know, it was actually a whole carrier fleet.

Has this historical pain point been solvable in the Web3 era? Recently, an interesting idea has emerged—using privacy-preserving computation protocols like APRO to reconstruct the financial regulatory system.

What is the core concept? Suppose the global derivatives market operates on a hybrid network of DeFi and CeFi. Each OTC trading desk must deploy dedicated privacy nodes, such as APRO’s zk-Reporter. The cleverness of this setup is that it can fully hide client identities (protecting Soros’s privacy) while still reporting total exposure data. In other words, regulators won’t know who is shorting, but they can see the total number of short positions.

With this infrastructure, the system can automatically generate a global heatmap—such as a "Thai Baht Shorting Heatmap." Data is aggregated in real-time, and if the short position ratio for a certain currency exceeds 30% of the total supply, an alert is triggered. During the 1997 crisis, it was precisely because short positions accumulated to this dangerous level that the central bank had a window to counterattack.

Later, the Bank of Thailand’s approach was quite classic—they didn’t foolishly deplete foreign exchange reserves to absorb the spot market, but instead launched a "short squeeze." They suddenly raised the overnight borrowing rate of offshore Thai baht to 1000% (a tactic also used during Hong Kong’s 1998 defense). This move instantly skyrocketed the financing costs for all short sellers, forcing them to close their positions.

From today’s perspective, if such a transparent yet privacy-respecting monitoring system existed, the entire story might have been different. Central banks could have detected extreme risks early and had ample time to prepare defensive measures. Moreover, this mechanism wouldn’t require sacrificing any personal privacy—your counterparty information remains confidential, but systemic risk signals are fully visible.

Of course, this is just a technical concept. To truly realize it would require deep collaboration among global regulators, exchanges, and DeFi protocols. But at least, based on the lessons of 1997, having something is better than nothing.