Hong Kong’s financial sector is grappling with an unprecedented surge of interest in real-world asset (RWA) tokenization as mainland Chinese institutions pour resources into developing blockchain-based products in the city.
The big moves follow the rollout of its new stablecoin licensing framework. Industry leaders and advisers are now pressing the government to accelerate regulatory measures to channel the enthusiasm into sustainable growth.
Mainland institutions pile into tokenized assets
Until recently, most Chinese-funded institutions in Hong Kong had limited exposure to digital assets, focusing instead on traditional investment vehicles.
That changed this summer after the city’s Stablecoins Ordinance, which took effect on August 1, established a licensing regime under the Hong Kong Monetary Authority (HKMA) requiring issuers to maintain high-quality reserves, guarantee convertibility, and comply with anti-money laundering controls.
Since then, fund managers and insurers backed by mainland capital have been told by headquarters to trial tokenized products. “This is assigned homework,” one Hong Kong-based fund manager said, noting that institutions were experimenting with RWAs such as tokenized money market funds and rental income streams.
Industry executives argue that blockchain-based products will ultimately make markets more efficient. “In the next five to ten years, all financial products will be on the blockchain,” one Hong Kong fund head told Tencent. But others caution against excessive hype.
Zhou Chenggang, chief executive of Taikang Asset Management Hong Kong, warned the sector was experiencing a false fire and needed to cool off, adding that not all assets need to be on-chain.
He said, “I oppose mythmaking about any new technology. Many people mistakenly believe that RWAs, which will be possible years in the future, are feasible today. This is a misconception and can mislead the market.”
PwC calls for more market reforms
The regulatory momentum around tokenization is also prompting calls for more capital-market reforms. At a press conference tied to the government’s consultation for the 2025 Policy Address, PwC urged the authorities to take decisive steps to strengthen Hong Kong’s role as a “super-connector” between China and global markets.
Recommendations included expanding the scope of confidential listing applications to cover dual-primary and high-growth companies, giving issuers more flexibility to keep sensitive data private until approvals are secured.
Regarding the Hong Kong government’s recently released “Hong Kong Digital Asset Development Policy Statement 2.0,” PwC recommends accelerating the implementation of digital asset-related strategies.
The consulting firm believes that Hong Kong has the potential to become a digital-first asset and wealth management hub. According to PwC, the establishment of a blockchain-native asset registration system will help promote asset tokenization.
Also, it pointed out that a registration mechanism for the issuance and transfer of digital assets such as land, intellectual property, and equity investments should be established to streamline processes and shorten transaction times.
Hong Kong is balancing momentum and caution
The city’s policymakers have made no secret of their ambitions. In June, the government unveiled its LEAP Framework (Legal streamlining, Expanding tokenized products, Advancing use cases, People) to institutionalize stablecoins, tokenized bonds, and RWAs in the financial system. The city has already issued tokenized green bonds and is seen as a testing ground for offshore yuan-backed stablecoins.
But industry insiders warn that liquidity constraints and regulatory uncertainties could stall progress. A senior crypto executive told Tencent that if an asset could already secure financing through traditional channels, tokenization added little value. Meanwhile, for lower-quality assets, blockchain would not solve liquidity concerns.
Still, the mainland authorities remain cautious. Analysts note that while Hong Kong is advancing stablecoin and tokenization rules, Beijing remains wary of capital flight risks and will allow only a handful of licences in the near term.
