China’s securities regulator has quietly advised some mainland brokerages to put a stop to their real-world asset (RWA) tokenization activities in Hong Kong. In recent months, a number of Chinese companies, including well-known brokerages, have rolled out RWA products in Hong Kong. RWA tokenization refers to the process of converting conventional financial assets such as […]China’s securities regulator has quietly advised some mainland brokerages to put a stop to their real-world asset (RWA) tokenization activities in Hong Kong. In recent months, a number of Chinese companies, including well-known brokerages, have rolled out RWA products in Hong Kong. RWA tokenization refers to the process of converting conventional financial assets such as […]

China’s securities regulator told some brokerages to halt real-world asset tokenization in Hong Kong

2025/09/23 00:56

China’s securities regulator has quietly advised some mainland brokerages to put a stop to their real-world asset (RWA) tokenization activities in Hong Kong.

In recent months, a number of Chinese companies, including well-known brokerages, have rolled out RWA products in Hong Kong. RWA tokenization refers to the process of converting conventional financial assets such as equities, bonds, funds, and even property into digital tokens that can be traded on blockchain platforms.

Two large securities firms have already received informal instructions from the China Securities Regulatory Commission (CSRC) in recent weeks. The message was clear. Suspend tokenization ventures beyond the mainland.

According to Reuters, the guidance was intended to ensure that companies engaging in this new business demonstrate proper risk controls and that their product claims are tied to solid, lawful operations.

Hong Kong is trying to become the hub for DeFi

The warning comes as Hong Kong has sought to establish itself as a hub for digital finance over the past year. Authorities there have encouraged companies to set up virtual asset trading, advisory, and management services.

China, in contrast, has kept a wary eye on cryptocurrencies and related innovations. Once the world’s leading centre for bitcoin mining and trading, the mainland outlawed crypto transactions and mining in 2021, citing risks to financial stability.

Last month, Chinese regulators reportedly told major domestic brokers to stop publishing research favourable to stablecoins, a measure aimed at cooling investor interest in those tokens. On the other hand, Cryptopolitan reported earlier that the Hong Kong government has urged the setting up of an RWA regime.

Meanwhile, Hong Kong’s Financial Services and the Treasury Bureau and the Hong Kong Monetary Authority said in June they were conducting a legal review of RWA tokenization, drawing lessons from international markets.

The global RWA sector is currently valued at about $29 billion, according to data provider RWA.xyz. Analysts at China Merchants Securities said last month that the figure could rise above $2 trillion by 2030.

It is not yet clear how long the CSRC’s informal guidance will remain in place. The individuals with knowledge of the matter declined to be identified in the exclusive report by Reuters as they were not authorised to speak publicly.

DeFi firms are readily testing virtual assets in Hong Kong

Brokerages and other firms have recently tested new products in Hong Kong’s friendlier regulatory climate. In June, the Hong Kong arm of GF Securities introduced “GF tokens,” a series of yield-linked products supported by the value of the U.S. dollar, Hong Kong dollar, and offshore renminbi, according to its partner HashKey Chain.

China Merchant Bank International (CMBI), a unit of China Merchant Bank, announced last month that it helped Shenzhen Futian Investment raise 500 million yuan ($70.29 million) through the issuance of a digital bond tied to real-world assets. GF Securities and CMBI did not immediately reply to requests for comment about whether they had been contacted by regulators regarding their tokenization work.

Beyond brokerages, Chinese developer Seazen Group revealed in August that it was setting up a Hong Kong institute to promote RWA tokenization.

Hong Kong’s recent introduction of a stablecoin regulatory framework has further fuelled investor interest. Earlier this month, the HKMA reported that 77 companies had shown interest in applying for licenses by August 31.

Investors have already started reacting. Shares in Chinese firms with digital asset goals have surged after announcements tied to Hong Kong approvals.

A state-owned brokerage, Guotai Junan International’s stock went up by more than 400% earlier this year after it disclosed that it had secured permission to provide crypto trading services in Hong Kong.

Similarly, Fosun International’s shares spiked as much as 28% on August 12. The spike came after reports surfaced that chairman Guo Guangchang and the firm’s stablecoin team had met senior Hong Kong officials.

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