In a move that could stir controversy in the rapidly evolving world of digital assets, recent reports reveal that Chinese authorities have instructed certain brokerages to temporarily halt their real-world asset (RWA) tokenization activities in Hong Kong. This development highlights the ongoing tension between China's cautious stance on cryptocurrencies and the ambitious efforts of Hong Kong to establish itself as a leading hub for digital finance. But here's where it gets interesting—while Hong Kong pushes forward with its plans to become a major player in virtual assets, Beijing appears to be tightening its grip, signaling concerns over the risks associated with offshore digital asset markets.
To clarify, RWA tokenization involves transforming traditional assets—such as stocks, bonds, real estate, and funds—into digital tokens that can be traded on blockchain platforms. This process aims to make asset trading more efficient, transparent, and accessible. Over the past few months, numerous Chinese firms, including brokerages, have launched RWA projects in Hong Kong, betting on the city’s growing reputation as a financial and technological innovation center.
However, recent sources indicate that the China Securities Regulatory Commission (CSRC) has issued informal guidance to some of these brokerages, advising them to pause their RWA activities outside mainland China. The primary concern appears to be risk management—ensuring that claims made by these companies are backed by solid, legitimate business operations and that the new ventures do not pose unforeseen threats to financial stability.
This regulatory caution comes amid a broader context. Hong Kong has been actively positioning itself as a digital assets powerhouse, with many firms preparing to launch virtual asset trading platforms, investment advisory services, and asset management solutions. The city’s efforts are part of a strategic push to attract international and Chinese firms alike, especially as China itself has adopted a more conservative approach following its 2021 ban on cryptocurrency trading and mining, citing concerns over financial stability.
In fact, just last month, Chinese regulators instructed major local brokerages to cease publishing research endorsing stablecoins—a move aimed at curbing the rising interest in digital currencies among domestic investors. Meanwhile, Hong Kong’s regulatory bodies, including the Financial Services and the Treasury Bureau and the Hong Kong Monetary Authority, are conducting legal reviews of RWA tokenization, drawing on international best practices.
The global market for RWA is currently valued at approximately $29 billion, with projections suggesting it could surpass $2 trillion by 2030, according to industry forecasts. Despite this promising outlook, the immediate future of RWA activities in China remains uncertain, as the regulatory environment continues to evolve. The exact duration of the CSRC’s guidance remains unclear, and authorities from both Hong Kong and China have yet to comment publicly.
In the meantime, Chinese brokerages like GF Securities and China Merchant Bank International have been actively exploring RWA-based products. For example, GF Securities’ Hong Kong unit launched "GF tokens," which generate yields backed by various currencies, while CMBI helped Shenzhen Futian Investment raise hundreds of millions of yuan through a digital bond linked to RWA. Additionally, property developer Seazen Group announced plans to establish an institute in Hong Kong dedicated to RWA tokenization.
The enthusiasm for digital assets in Hong Kong is further fueled by the city’s recent introduction of a stablecoin regulatory framework, which has attracted dozens of firms eager to obtain licenses. This environment has led to a surge in the stock prices of Chinese companies interested in virtual assets. For instance, Guotai Junan International’s shares soared over 400% after receiving approval to offer cryptocurrency trading services, and Fosun International’s shares jumped nearly 30% following meetings with Hong Kong officials.
All of this raises a provocative question: Will China’s cautious approach ultimately stifle innovation, or will Hong Kong’s more open stance create a competitive edge in the global digital asset landscape? As the regulatory landscape continues to shift, the industry’s future remains uncertain—yet undeniably fascinating. What’s your take—are these moves a sign of cautious progress or a sign of impending restrictions? Share your thoughts below.
