Global Tokenization Competition: How Hong Kong Can Gain the Upper Hand

Real World Asset (RWA) tokenization is rapidly entering the mainstream, reshaping the global financial landscape. Currently, over $24 billion of RWAs are circulating on public chains, covering multiple areas such as yield-generating U.S. Treasuries, private credit pools, tokenized commodities, and real estate. This trend is evolving from niche experiments into an important component of global financial infrastructure, quietly reconstructing the underlying architecture of capital markets.

In this transformation, Hong Kong is actively positioning itself to become a global leader in tokenization. The recently released "Digital Asset Development Policy Statement 2.0" by Hong Kong proposes the "Leap" regulatory framework, which expands the regulatory scope to include stablecoin issuers, custodians, and RWA platforms. This framework not only allows for tokenization but also actively advocates for the development of tokenization.

"Leap" framework includes four aspects: simplification of laws and regulations, expansion of tokenized products, promotion of application scenarios, and development of talent and partnerships. It promotes the formation of a broader vision by establishing a stablecoin licensing system, clarifying the regulatory framework for tokenized ETFs, and continuing the previous pilots in digital bonds and green finance, encouraging the tokenization of various assets ranging from precious metals to renewable energy infrastructure.

Hong Kong's strategy stands in stark contrast to other markets. Singapore has adopted a more cautious approach, focusing on institutional participation and limiting retail investors. In contrast, Hong Kong has chosen a broader, more inclusive path, allowing retail users to participate under clear appropriateness rules, thereby expanding the potential market space. Compared to the EU's regulatory framework for crypto assets and the fragmented regulatory tug-of-war in the United States, Hong Kong offers a more unified, principle-based system that provides the clarity needed for innovators and investors.

However, simply establishing a regulatory framework is not enough to ensure success. The real challenge lies in creating products that the market truly needs. Many tokenization projects fail not due to technical or regulatory barriers, but due to a lack of real commercial value and market demand. Successful tokenization projects, such as tokenized U.S. Treasury products and private credit protocols like Maple Finance, have achieved widespread adoption because they genuinely address the real problems of specific user groups.

The local ecosystem in Hong Kong is also developing in this direction. The Financial Management Authority's "Project Ensemble" is exploring multiple scenarios such as tokenization of bonds, funds, carbon credits, charging pile infrastructure, and supply chain finance. These projects all have potential, but a "blockbuster" product that can truly connect assets, audiences, and use cases on a large scale has yet to emerge.

Hong Kong has already laid a solid foundation for tokenization development: clear regulations, institutional recognition, and the continuous advancement of credible projects through public-private collaboration. As a safe and clearly structured experimental environment for digital assets, Hong Kong's influence far exceeds the local market, especially considering its potential as a "fortress" for China's digital asset strategy.

However, the most challenging phase is just beginning. Future competition will be determined by the alignment of products with the market, rather than more policies. Can Hong Kong attract Southeast Asian savers to invest in truly profitable stablecoin products? Can it connect China's industrial assets to global capital through compliant digital packaging? Can it incubate a new generation of RWA products that are not only legal and compliant but also truly meet market demands?

The answers to these questions will determine whether RWA is just a temporary trend or can become a lasting transformation; it will also decide whether Hong Kong can become the global tokenization center of this new era. If successful, Hong Kong will not only be a leader but will also become one of the important shapers of future financial forms.