Author: Xie Zhaoqing, Source: Tencent News "Qianwang"
Hong Kong's financial circle has begun to stratify: foreign institutions are still researching quantitative, hedging and IPOs as usual; and in addition to these, Chinese institutions have a new task - researching RWA (Real World Assets). Reliable Waivers (RWAs) involve tokenizing real-world assets, particularly those that generate stable income, such as hotel leases, photovoltaic power generation, and even stocks, bonds, and commodities, through blockchain technology, enabling them to be traded, managed, and circulated on-chain. "This is an arrangement from headquarters in China, and most other institutions are diligently experimenting with it," several financial practitioners from Chinese institutions in Hong Kong told Tencent News's "Qianwang" (perspective) that they will "experiment with implementing RWA projects." Some simply call it "assigned homework." A head of a leading fund company in Hong Kong told Tencent News' "Qianwang" that many institutions have recently received requests from headquarters in China to explore business opportunities in RWA projects. Tencent News' "Qianwang" has learned that, like most financial product launches in Hong Kong, these Chinese financial institutions' exploration of RWA projects requires the involvement of numerous lawyers. This has also led to an increase in business in the cryptocurrency sector for some Hong Kong law firms, including King & Wood Mallesons and Jun He Law Firm. This has made practitioners at Chinese-funded institutions in Hong Kong even busier. On August 7th, Ant Digital, along with other institutions, held an industry conference on RWAs at the Hong Kong Stock Exchange. Attendees included Leung Chun-ying, Vice Chairman of the National Committee of the Chinese People's Political Consultative Conference and former Chief Executive of the Hong Kong SAR, and Paul Chan, Secretary for Financial Services and the Treasury of the Hong Kong SAR Government. The organizers may have underestimated the enthusiasm of Hong Kong's financial community. When the event opened at 2:30 PM that day, the venue was packed, with most people standing in the back without seats. "It's been a while since I've seen so many people from traditional institutions attend a cryptocurrency event in Hong Kong," a representative from a traditional financial institution told Tencent News' Qianwang at the event, adding that he met many familiar faces in the industry.
1. Chinese financial institutions in Hong Kong are actively trying out RWA
"If the Hong Kong Stablecoin Ordinance had not been introduced, there would not have been this wave of Chinese enthusiasm." A head of a leading asset management institution in Hong Kong summarized the reason this way.
Executives like him who work in Chinese asset management institutions have traveled back and forth between the mainland and Hong Kong many times in the past period of time to discuss with the headquarters and some local regulatory agencies the possible business opportunities in Hong Kong under the promotion of stablecoins.
A head of asset management for a state-owned enterprise stationed in Hong Kong told Tencent News’ “Qian Wang” that “this wave is actually top-down. The headquarters hopes that institutions stationed in Hong Kong will try to do RWA to prepare for the ecological development after the issuance of stablecoins in the future.”
Prior to this, except for Chinese institutions such as Hua Xia Fund Hong Kong Company, Taiping Asset Management Hong Kong Company, Harvest Fund, Bosera Fund, etc., which issued some cryptocurrency products in Hong Kong, most Chinese institutions in Hong Kong did not get involved in the cryptocurrency business. Some even did not upgrade their asset management licenses to the category that allows them to participate in cryptocurrency products. Public data shows that China Asset Management (Hong Kong), a leading Chinese fund company in Hong Kong, has already issued Bitcoin and Ethereum spot ETFs in 2024, as well as a Hong Kong dollar money market tokenized fund in February 2025. In July of this year, it also launched RMB and US dollar money market tokenized funds. As of the close of trading on August 21st, the size of China Asset Management's Bitcoin spot ETF was approximately HK$2.072 billion. Meanwhile, the Bitcoin ETFs of Harvest Fund and Bosera Asset Management were valued at HK$260 million and HK$1.475 billion, respectively. Tencent News' "Qianwang" reported that among China Asset Management (Hong Kong)'s money market tokenized products, the tokenized Hong Kong dollar fund has a value of approximately HK$1.2 billion, while the tokenized US dollar fund has a value of US$40 million. In March of this year, CPIC Asset Management (Hong Kong) launched the first tokenized USD money market fund (CPIC Estable MMF), with an issuance size of US$100 million. Public data shows that CPIC Asset Management, the asset management arm of China Taiping Insurance Group, currently has over HK$70 billion in assets in Hong Kong. In September 2023, it upgraded its Type 1 and Type 4 licenses, enabling it to participate in virtual asset fund distribution and investment advisory services. It is also one of the first asset management companies to receive virtual asset licenses in Hong Kong. Zhou Chenggang, CEO of CPIC Asset Management (Hong Kong), told Tencent News' Qianwang that the decision to tokenize USD money market funds was primarily based on investor demand and market liquidity. Zhou explained that tokenized money market funds are relatively easy for institutional investors to understand. Furthermore, the importance of tokenizing products now lies in exploration and preparation, not in the pursuit of scale.
"There are not many suitable financial targets for tokenized products in Hong Kong now. In addition to stable money market funds, there are some attempts at equity tokenization, and some are even exploring the tokenization of Private Credit (private credit products). "The head of a state-owned enterprise fund said that most institutions had not been exposed to cryptocurrency products before. After the stablecoin craze in Hong Kong in mid-to-late July, they all had to start "accumulating" projects, and some even formed temporary teams to build products in order to "hand in their homework."
A head of a Chinese-funded institution in Hong Kong told Tencent News' "Qianwang" that this was not surprising, and that everyone would have to learn about blockchain products in the future. In his opinion, more financial products may be put on the chain later. A relatively optimistic head of a leading Chinese fund in Hong Kong told Tencent News' Qianwang that within the next 5-10 years, all current financial products will be on the blockchain, solving the problem of 24/7 trading, making them more efficient and reducing costs. "The development of the financial industry aligns with the current trends in AI development, and both will face comprehensive transformation." What excites the heads of these Chinese asset management institutions in Hong Kong is that the US market already has successful pioneers, such as BlackRock. Public data shows that BlackRock listed its Bitcoin spot ETF, iShares Bitcoin Trust (IBIT), on the Nasdaq on January 11, 2024. As of the close of trading on August 20, the fund's size exceeded US$86.77 billion, making it the fastest-growing ETF in history and breaking multiple industry records. Subsequently, on March 20, 2024, BlackRock launched the iShares USD Money Market Fund (BUIDL), its first tokenized USD money market fund. More importantly, the RWA market in the US is also growing rapidly. Public data shows that as of August, the RWA market size was approximately $24 billion to $25 billion (excluding stablecoins). Of this, RWAs with underlying assets like private credit accounted for over $13 billion, followed by RWAs with underlying assets like US Treasuries at $8 billion. The latter includes approximately $2.38 billion in RWAs from asset management giant BlackRock's tokenized fund, BUIDL. "We want to become the BlackRock of China," the head of the aforementioned leading Chinese fund told Tencent News' Qianwang. As the world's largest asset management company, BlackRock has "already undergone a self-revolution," and as a Chinese institution in Hong Kong, "we can no longer afford to struggle in the competitive sea of traditional financial markets like bonds and stocks." Seizing the opportunities presented by Hong Kong's policy and industry changes is the only way to timely adapt to the development and transformation of the entire capital market. This is the motivation behind the overwhelming number of Hong Kong asset management institution leaders and their teams flocking to the RWA market. These optimists believe that current company strategies are not difficult to understand, and that only by preparing early for technological advancements can one seize opportunities to overtake competitors and seize new opportunities. Second, practitioners urge "This is just a false alarm, and we need to calm down." However, not everyone believes that the current RWA market is suitable for all institutions. Zhou Chenggang, CEO of Taibao Asset Management Hong Kong, told Tencent News' Qianwang that the current RWA market in Hong Kong is "overheated, a false alarm, and we need to calm down." These optimists believe that all financial assets in Hong Kong will be on the blockchain within the next 5-8 years. However, Zhou Chenggang disagrees. He believes that all financial assets will have the opportunity to be put on-chain in the future, but a specific timeline is currently unpredictable as it depends on the development of the entire RWA ecosystem. More importantly, not all assets need to be put on-chain. The ability to put assets on-chain must conform to financial logic and be designed to solve specific problems. Like many financial professionals in Hong Kong, Zhou Chenggang acknowledges blockchain technology, but he stated, "I oppose mythmaking about any new technology. Many people mistakenly believe that RWAs, which will be something that will happen years in the future, are feasible today. This is a misconception and misleads the market." Zhou Chenggang's view is not uncommon. Several fund managers in Hong Kong (both foreign and some Chinese) and cryptocurrency industry insiders stated that issuing RWA products in Hong Kong at this stage is more about exploring their significance. A senior executive with years of experience in the cryptocurrency industry put it more bluntly: If the underlying assets of RWAs can quickly secure financing in traditional finance, this suggests they possess reasonable liquidity. In the current RWA market, where liquidity is relatively low, putting them on-chain would not be a priority. Similarly, for underlying assets that aren't high-quality enough, even if they are put on-chain, their liquidity remains questionable. "The Hong Kong RWA market is already showing signs of overheating," said Zhou Chenggang, one of several practitioners in Hong Kong. They believe RWAs will undoubtedly have significant room for development in Hong Kong, but the ecosystem is still in its very early stages, with much room for improvement in areas such as financing and liquidity. Following the stablecoin boom, the popularity of RWAs has also risen. An asset manager who is leading a team planning to launch an RWA product told Tencent News' Qianwang that he has contacted many teams, but the quality of these teams varies greatly, and some teams are even unclear about the legal rights and interests corresponding to RWA assets. Zhou Chenggang shared a similar view: "RWA is actually a product built on a complete legal system." He believes that both the rights of investors holding RWA asset tokens and the ownership of the underlying assets corresponding to these rights need clear legal regulations.
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