Reuters sources indicate that at least two leading brokerage firms have received advisories from the China Securities Regulatory Commission (CSRC) requesting them to avoid deploying RWA activities overseas. This move is believed to be aimed at strengthening risk management within this emerging business sector and ensuring businesses are backed by a legitimate and solid operational foundation.
The recommendation also comes as the Financial Services and the Treasury Bureau (FSTB) and the Hong Kong Monetary Authority (HKMA) are conducting a legal review of RWAs, referencing international experience.
Real-world asset (RWA) tokenization involves converting traditional assets like stocks, bonds, and even real estate into digital tokens for trading on a blockchain. Several mainland Chinese companies, including brokerage firms, have launched RWA products in Hong Kong in recent months.
It remains unclear how long the CSRC's request to halt RWA activities will last.
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RWA involves converting real-world assets into tokens for trading on a blockchain. Graphics: Phien An |
An HKMA spokesperson stated that "the tokenization space is developing very rapidly". The authority is exploring the implementation of "Project Ensemble," a limited sandbox for tokenization. Hong Kong's legal review of the tokenization market will initially focus on bonds.
Over the past year, Hong Kong has intensified its efforts to position itself as Asia's digital asset hub. Many companies, including brokerage firms, are preparing to deploy virtual asset trading, investment advisory, and management services.
Meanwhile, mainland China—once the world's largest Bitcoin trading and mining center—remains cautious about digital assets. Since 2021, Beijing has banned cryptocurrency trading and mining due to concerns about systemic financial risks. Last month, authorities also requested major brokerage firms to stop publishing research reports recommending stablecoins (cryptocurrencies pegged to the value of another asset, usually USD) to curb domestic investor interest in these digital currencies.
The global RWA market is currently estimated at around 29 billion USD. China Merchants Securities predicts this figure could exceed 2,000 billion USD by 2030. In June, the Hong Kong branch of GF Securities launched "GF tokens," a yield-generating product pegged to USD, Hong Kong dollars, and renminbi.
In August, China Merchant Bank International assisted Shenzhen Futian Investment in raising 70.29 million USD through the issuance of RWA-backed digital bonds. Chinese property developer Seazen Group announced it is establishing a research institute to promote RWAs in Hong Kong.
Phien An (according to Reuters)
