Hong Kong's Tokenization Drive Sparks Regulatory Tension with Beijing

China’s securities regulator has informally instructed brokerages to suspend real-world asset (RWA) tokenization activities in Hong Kong, citing concerns over risk management and the need to verify the legitimacy of underlying assetsChina’s CSRC asks brokers to pause RWA tokenization business in Hong Kong^[1]. The China Securities Regulatory Commission (CSRC) reportedly advised at least two major brokerages to halt such operations, according to sources familiar with the matterChina Hits Pause on Hong Kong RWA Tokenization Amid Digital^[2]. This move reflects Beijing’s cautious stance toward digital asset innovations, particularly as Hong Kong advances its ambitions to become a regional hub for tokenized assets. The CSRC’s guidance, however, has not been formalized into a public directive, leaving the duration of the pause uncertainChinese Regulators Crack Down on Real-World Asset Businesses …^[3].

Hong Kong has been actively promoting digital asset growth, including the introduction of stablecoin licensing and legal reviews of tokenization practices by the Financial Services and the Treasury Bureau (FSTB) and the Hong Kong Monetary Authority (HKMA). Despite the CSRC’s informal restrictions, several Chinese firms, including GF Securities and Seazen, continue to expand their tokenization and stablecoin initiatives in the regionCSRC Calls for Stop to Hong Kong RWA Tokens^[4]. For instance, GF Securities’ Hong Kong unit launched fiat-backed “GF Tokens,” while China Merchants Bank International recently facilitated a tokenized digital bond issuance worth 500 million yuan ($70.29 million)China’s CSRC asks brokers to pause RWA tokenization business in Hong Kong^[5].

The RWA tokenization market, valued at $29 billion as of 2025China Hits Pause on Hong Kong RWA Tokenization Amid Digital^[6], is projected to grow significantly, with forecasts suggesting it could reach $2 trillion by 2030Chinese Regulators Crack Down on Real-World Asset Businesses …^[7]. This market involves converting traditional assets like stocks, bonds, and real estate into blockchain-based tokens, enabling faster trading and broader investor access. Companies like Seazen are exploring tokenizing real estate income and intellectual property, with plans to issue non-fungible tokens (NFTs) linked to their properties by year-endChina’s CSRC asks brokers to pause RWA tokenization business in Hong Kong^[8]. Meanwhile, AnchorX’s AxCNH stablecoin, pegged to the offshore yuan, was launched at the Belt and Road Summit in Hong Kong, signaling further experimentation with stablecoins outside the mainlandCSRC Calls for Stop to Hong Kong RWA Tokens^[9].

The regulatory divergence between Beijing and Hong Kong highlights a tension in China’s digital asset strategy. While Hong Kong embraces tokenization and stablecoin innovation, mainland China maintains strict controls, including a 2021 ban on crypto trading and mining. The CSRC has also instructed brokerages to cease publishing research endorsing stablecoinsChina Hits Pause on Hong Kong RWA Tokenization Amid Digital^[10]. This contrast underscores the challenge of balancing innovation with risk mitigation, as Hong Kong seeks to attract global capital while Beijing prioritizes financial stability.

Analysts note that the CSRC’s actions align with its broader efforts to curb speculative risks in the digital asset sector. The informal pause on RWA tokenization in Hong Kong is part of a larger regulatory framework aimed at ensuring that tokenized products are backed by sustainable business modelsChinese Regulators Crack Down on Real-World Asset Businesses …^[11]. Despite these cautionary measures, Hong Kong’s momentum in digital asset adoption remains strong, with 77 firms expressing interest in its licensing framework and investor enthusiasm driving stock surges for firms like Guotai Junan International and Fosun InternationalChina’s CSRC asks brokers to pause RWA tokenization business in Hong Kong^[12].

The CSRC’s guidance has not deterred all activity. Property developer Seazen recently raised $300 million through a dollar bond sale, positioning itself as the first private Chinese developer to access global credit markets since 2023China Hits Pause on Hong Kong RWA Tokenization Amid Digital^[13]. Such developments indicate that while regulatory hurdles persist, Hong Kong’s push to solidify its role as an Asian digital asset hub continues. The long-term implications of this regulatory tension will depend on how effectively Hong Kong can navigate Beijing’s caution while fostering innovation in the tokenization space.