China Halts Domestic Brokerages’ RWA Operations in Hong Kong

• China’s securities regulator ordered mainland brokerages to stop their blockchain asset tokenization businesses in Hong Kong. 

• Hong Kong continues to welcome digital asset companies, and 77 firms have applied for stablecoin licenses. 

• The RWA tokenization market is worth $29 billion today but could reach $2 trillion by 2030.

The China Securities Regulatory Commission (CSRC) has directed mainland brokerages to suspend real-world asset tokenization activities in Hong Kong. This move creates a sharp policy divide between Beijing’s restrictive approach and Hong Kong’s progressive digital asset strategy.

The regulatory body issued informal guidance to major Chinese brokerages, instructing them to halt tokenization businesses in the territory. Sources familiar with the matter confirmed that at least two prominent firms received these directives. The CSRC’s action signals growing concern about offshore digital asset markets and stricter risk management protocols for blockchain-based financial products.

Beijing Tightens Digital Asset Controls

China’s latest intervention follows its comprehensive cryptocurrency ban implemented in 2021. The mainland government prohibited all cryptocurrency trading and mining operations, citing financial stability risks and regulatory concerns. In recent months, there have been additional restrictions, including orders for major brokers to stop publishing research supporting stablecoins.

Real-world asset tokenization converts traditional financial instruments into blockchain-based digital tokens. These assets include equities, bonds, investment funds, and real estate properties. The process enables digital trading of conventional assets through distributed ledger technology.

Several Chinese financial institutions had established significant RWA operations in Hong Kong before the regulatory crackdown. GF Securities launched “GF Tokens” backed by multiple currencies, including US dollars, Hong Kong dollars, and offshore renminbi. 

China Merchants Bank International facilitated a 500 million yuan digital bond issuance for Shenzhen Futian Investment. Supply chain fintech company Linklogis partnered with XRP Ledger to enhance its global digital finance platform.

Hong Kong Pursues Digital Asset Leadership

Hong Kong has adopted an opposite regulatory approach, positioning itself as Asia’s premier virtual asset hub. The Financial Services and Treasury Bureau and Hong Kong Monetary Authority initiated comprehensive reviews of RWA tokenization frameworks earlier this year. These efforts align with international standards to attract global digital asset businesses.

The territory’s new stablecoin regulatory framework has attracted 77 firms seeking operational licenses. Local brokerages have experienced substantial stock price increases following crypto-related announcements. Guotai Junan International’s shares surged over 400% after receiving crypto trading approval in June.

Property developer Seazen Group announced plans to establish a Hong Kong-based institute focused on RWA tokenization research and development. These initiatives demonstrate strong private sector interest in blockchain financial services.

Industry data indicates the RWA tokenization market currently holds a $29 billion valuation. Analysts project growth to exceed $2 trillion by 2030, representing significant expansion opportunities for financial services providers.

The regulatory divergence between mainland China and Hong Kong reflects broader tensions between financial innovation and regulatory control. Beijing’s restrictive stance contrasts sharply with Hong Kong’s ambition to lead regional digital finance markets. This policy gap may influence future cross-border financial services cooperation and regional fintech development strategies.