"Is our project suitable for RWA in Hong Kong?" A company representative asked earnestly, flipping through the project document as several people gathered around a wooden table in a cafe in Nanshan District, Shenzhen. Such conversations have been recurring in various cities across the Greater Bay Area in recent months. RWA, short for "Real World Assets-tokenization," refers to the conversion of real-world assets into tradable digital asset tokens based on blockchain technology. According to incomplete statistics from Yicai Global, over 13 institutions have experimented with RWAs in the past two years, including well-known companies such as Longsun Group (19.750, 0.28, 1.44%), China Asset Management, and Pacific Insurance (4.620, 0.04, 0.87%). Their underlying assets range from new energy equipment, financial products, and even agricultural products (8.090, 0.07, 0.87%). Behind these initiatives are technical support providers like Ant Financial and OSL, jointly building a new path from domestic assets to Hong Kong title confirmation and global circulation. Today, more companies are stepping up their efforts, leading to a surge in business for RWA consulting agencies. Beyond financing, listed companies are also focusing on the diverse value of RWAs. For example, they pave the way for companies to expand overseas, generate brand exposure, and even boost stock prices.
With the resurgence of RWA financing, is there a risk of overheating? Many industry insiders have pointed out that not all assets are suitable for RWA. Even if the assets meet the regulations, there are still risks in the early stages of the industry, such as high financing costs and uncertain financing results.
The number of RWA orders to Hong Kong has surged
According to an incomplete review by a reporter from the First Financial Daily, since 2024, 13 institutions or companies, including Longxin Group, Xunying Group, China Asset Management, and Pacific Insurance, have successfully implemented RWA. The underlying assets include funds, bonds, physical gold, real estate mortgage loans, agricultural products, etc., and technical partners include Ant Financial, OSL, and HashKey. For example, the New Electric Platform under Longxin Group uses the income rights of charging piles as its underlying asset; GCL Energy (11.980, 0.12, 1.01%) issues RWAs based on the future income rights of photovoltaic power stations; and Cruise Eagle Group and Oride (3.410, 0.07, 2.10%) use the income rights of battery swap assets and AI servers as their underlying assets, respectively. In accordance with Hong Kong regulatory requirements, these projects are not open to retail investors, but only to institutional or professional investors, and there is no secondary market trading. They have raised funds ranging from tens of millions to 200 million yuan. More and more companies are trying to replicate this successful experience. Zhang Jing (pseudonym), head of an investment firm specializing in RWA consulting, told reporters that real estate companies have recently shown a significant increase in interest in seeking RWA financing, hoping to alleviate financial pressures by financing mature commercial properties with stable rents through RWAs. Companies in the cultural tourism and entertainment, photovoltaic new energy, and charging stations sectors have also shown strong interest. Shao Jiayi, a partner at Mankiw Law Firm (Shenzhen), told reporters that the number of inquiries regarding RWAs has skyrocketed in the past year. These inquiries come from businesses, technology service providers, licensed managers, and even intermediaries. According to RWA.xyz data, the total market value of on-chain RWA assets globally has exceeded $25 billion (excluding stablecoins) by the end of July 2025. Boston Consulting Group and other institutions predict that the RWA market is expected to exceed $10 trillion by 2030. Currently, several listed companies, including Longsun Group and GCL Energy, have issued RWAs in Hong Kong. These companies have not disclosed specific details of their RWA issuances, including divested asset income rights and raised funds, in their annual reports or announcements. Shao Jiayi stated that if a listed company fails to make relevant disclosures, it may be because it doesn't meet disclosure standards, or, although a decision has been made and an announcement has been issued, the topic is relatively routine and does not highlight a clear connection to RWA (real asset tokenization), making specific details difficult to discern in the listed company's announcement. Beware of overheating risks. Compared to traditional financing channels, RWA, as an emerging model, does not offer a cost advantage. Yicai Global reporters learned from multiple industry insiders that the total cost of issuing RWA projects in Hong Kong is typically no less than HK$2.5 million, depending on the complexity of the project. Some institutions charge a commission of 3% to 5% when underwriting an offering, but some institutions waive this fee. Furthermore, issuers must guarantee investors a certain rate of return on investment. "The underlying assets are non-standard, and the promised return is generally over 8%. If they're bond-type assets, it can be slightly lower. Otherwise, it's difficult to sell the product." An industry insider revealed that compared to some conventional financing methods, RWA financing costs are higher. "There aren't many real implementation cases, and we're often trying to discourage people," said Shao Jiayi. Many people misunderstand RWAs, believing that once the assets are put on the blockchain, they will sell out quickly, or even view them as a "mini-IPO." However, the reality is far from this. The current difficulties mainly lie in two aspects: First, the high issuance costs, which many companies hesitate to pursue after understanding the actual costs. More crucially, the success of the issuance depends entirely on whether the assets can attract professional investors. Currently, these non-standard assets are only issued privately in Hong Kong to professional investors, who strictly examine core indicators such as the project's asset return rate, security, corporate credit, and debt-to-asset ratio. Therefore, putting a token on the blockchain does not necessarily mean successful fundraising. A planned 50 million yuan financing may only result in around 10 million yuan, with no guarantee of full funding. Once a company realizes that the initial investment doesn't guarantee a guaranteed financing outcome, it often reconsiders its decision to enter this sector. Yet, given the lack of significant advantages in financing costs and amounts, why are many mainland companies still so keen on investing in RWA in Hong Kong? "It's more about 'building momentum' than simply seeking financing," an RWA information consulting intermediary told reporters. Bank loans are relatively cheap, and most companies aren't simply seeking financing, but rather the diverse value of RWA. For example, it paves the way for overseas expansion, generates brand exposure, and even boosts stock prices. Many companies have seen significant stock price increases after implementing RWA, a "market capitalization management" effect some market participants refer to as "coin-stock linkage." According to Shao Jiayi, currently, listed companies are the majority of those engaging in RWA. First, they can afford higher intermediary fees. Second, RWA issuance not only raises funds but also brings the added branding effect of a token-to-share linkage to listed companies, giving them greater incentive to invest in RWAs. For example, Oride's RWA saw its stock surge 10% on August 11, the second trading day after its issuance. Guotai Junan International launched its first batch of structured product tokens on August 26, and its stock price rose over 15% on August 29. GCL Energy's stock price, previously sluggish, doubled within three months after announcing its partnership with Ant Financial, rising from 6.24 yuan per share on April 9 to a high of 14.90 yuan on July 1. Langxin Group's stock price rose 2.6 times from a low of 7.27 yuan per share in August 2024 to a high of 26.07 yuan per share in June 2025. On the other hand, RWAs do have the potential to revitalize "dormant assets" and reduce the resistance brought on by the high investment thresholds and long monitoring cycles of traditional models. A cryptocurrency industry insider told reporters that even relatively simple bank loans require financial statements and collateral assessments, and approval can take one to two months. RWAs, however, leverage blockchain and smart contracts to digitize the entire process, reducing intermediaries and manual operations. Asset ownership confirmation can be completed through on-chain integration with official databases, issuance and profit distribution are automatically executed through contracts, and information is disclosed on-chain in real time, eliminating the need for offline filings. This significantly shortens the overall process and time. Not everything can be RWAs. However, in practice, conducting RWAs in Hong Kong is not easy. According to Zhang Jing, mainland enterprises must first confirm ownership of their domestic assets and operating rights through a mainland alliance blockchain. They then establish a special purpose vehicle (SPV) in Hong Kong, which holds these assets and operating rights. These SPVs are then put on the blockchain and tokenized for financing in the form of stablecoins. During this process, mainland assets should ideally exceed 300 million yuan, as the typical financing cost for a RWA in Hong Kong can exceed 1 million yuan. A smaller fundraising scale may not be cost-effective. Furthermore, it's important to note that issuing RWAs requires a backer. Some photovoltaic power generation projects may require an annual dividend return of 5% to 10%. These requirements are difficult for most companies to meet. Not all assets are suitable for RWAs. The Hong Kong Monetary Authority's "Ensemble" sandbox project defines four key themes for RWAs: fixed income and investment funds, liquidity management, green and sustainable finance, and trade and supply chain finance. Li Li, a partner at Beijing Jingtian & Gongcheng Law Firm, believes that identifiable financial assets that can generate sustained and stable cash flows, which are suitable as underlying assets for asset-backed securities, possess the potential and possibilities of RWAs. Among these, physical assets (such as charging stations, battery swap stations, and distributed photovoltaics) that possess digital twin properties and enable real-time synchronization of business data through technologies like the Internet of Things (IoT) facilitate tracking, settlement, auditing, and evaluation of the cash flow returns of their underlying assets, further aligning with the decentralized and transparent nature of crypto assets. Assets with a background in green environmental protection, energy conservation, and carbon reduction are more aligned with the guidance of industrial policies. The recent "RWA Industry Development Research Report - Industry Edition 2025" (hereinafter referred to as the "Report"), jointly released by the Hong Kong Web3.0 Standardization Association, the Hong Kong Polytechnic University, and other institutions, demonstrates that not all assets are suitable for RWA tokenization, and the "everything can be RWA" proposition is a misconception. Assets that successfully achieve large-scale implementation must meet three key thresholds: value stability, clear legal title, and off-chain data verifiability. Even if the underlying assets meet these requirements, RWAs still face strict regulatory requirements. The report indicates that RWAs are still in a stage where regulatory overlaps and gaps coexist. Regulators can build on existing regulatory systems for securities, commodities, and credit, clarifying the logic of categorized supervision based on the underlying asset attributes, return structure, and market liquidity of RWAs. This can establish a "penetrating and function-oriented" compliance approach, bridging the entire process of asset digitization, assetization, and tokenization. Zhao Wei, senior researcher at the OKX Research Institute, told Yicai Global that the key to risk control lies in improving transparency and strengthening custody mechanisms. Without adequate oversight or transparency, RWAs could accumulate systemic risks. Zhao Wei believes that for assets suitable for standardization and on-chain management, the quality of the underlying assets, cash flow distribution, and asset pool composition should be on-chain and traceable whenever possible to avoid "black box" information asymmetry. Furthermore, off-chain custody and independent auditing are essential to ensure that tokens strictly correspond to real assets. Regarding regulatory approaches, a tiered approach can be adopted, bringing different types of RWAs into corresponding regulatory frameworks based on their asset attributes. In the early stages, they can be limited to qualified traders, gradually reducing risk exposure. "The current Hong Kong RWA model is legally compliant and regulated under the existing regulatory framework," said Shao Jiayi. However, investors need to be aware that RWA products are not risk-free. First, the underlying assets themselves are not risk-free. Most of these products sell future income rights, and future returns are not guaranteed. Second, the RWA issuance structures designed by different projects vary widely. Whether these structures are fully compliant, adaptable to local regulations, and effectively protect investor rights varies widely, and even varies widely, and is a matter of opinion. Finally, RWA project issuers or platforms themselves may face performance risks. Some RWA issuance platforms in Europe and the United States have already been embroiled in default scandals. Therefore, Shao Jiayi stated that risks can arise from both the assets themselves, the transaction structure, and even the creditworthiness of the issuer or platform. Investors should be rational about so-called "asset backing" and not blindly assume that "underlying assets guarantee absolute security." Amidst an overheated market, Reuters recently reported, citing two sources familiar with the matter, that Chinese securities regulators have advised some local brokerages to suspend real-world asset (RWA) tokenization operations in Hong Kong. However, this information has not been confirmed. Can it be used for the repatriation of Chinese concept stocks? While RWAs are gaining momentum in Hong Kong, equity tokens have become the most popular asset class within RWAs in the United States due to the clarity and recognition of their underlying assets. On June 30, 2025, US online brokerage Robinhood and US cryptocurrency exchange Kraken simultaneously announced the launch of US stock tokenization products. These products will support trading of popular US stocks and ETFs, including Nvidia, Tesla, Apple, and Microsoft, providing users with 24/7 trading services. Furthermore, centralized cryptocurrency exchange Bybit and decentralized cryptocurrency trading platforms such as Raydium and Art.fun have also launched stock tokenization products. The surge in US stock tokenization has also sparked market discussion about the tokenization of Hong Kong stocks. In July 2025, Hong Kong Legislative Council member Darwin Chiu stated in an interview, "Some have raised the issue, but it's still in the early stages." However, this process may present difficulties. A senior Web 3.0 practitioner told reporters that tokenizing Hong Kong stocks would essentially be a price mapping exercise and would not truly change the way stocks are registered and traded on the Hong Kong Stock Exchange. The real-name holders of the shares will still be brokerage firms or professional investors, and actual transactions will still be conducted within the existing Hong Kong Stock Exchange system. On-chain tokens do not represent the shares themselves, but rather serve as price tracking tools or a promise by the issuer to repay on-chain holders. While there are currently no significant legal obstacles, regulatory considerations may present challenges. Beyond legal and technical constraints, US stocks offer more popular targets suitable for tokenization (such as Nvidia and Apple), which are more likely to attract users and traffic, while the Hong Kong stock market lacks comparable popularity and appeal in this regard. Some believe that RWAs offer a new approach for the repatriation of Chinese concept stocks. Zhao Wei told Yicai Global that RWAs do offer a new avenue for exploration. Compared to traditional secondary listings, RWAs offer greater technical flexibility and, in theory, can map overseas assets to the Hong Kong market with lower barriers to entry and faster processing times, thereby expanding trading liquidity and the trader base. According to Wind Information, as of now, there are still 406 Chinese companies listed on US exchanges, with a total market capitalization of $1.1 trillion. Among them, leading Chinese concept stocks such as Alibaba (NYSE: BABA, 09988.HK) and JD.com (NASDAQ: JD, 09618.HK) have already achieved secondary or dual listings in Hong Kong, but many well-known companies have yet to "return to Hong Kong." In April, Goldman Sachs estimated that 27 Chinese concept stocks were expected to return to Hong Kong for listing, with a total market capitalization exceeding HK$1.4 trillion. These 27 Chinese concept stocks include Pinduoduo, Manbang, Futu, Legend Biotech, Vipshop, and Zeekr. Zhao Wei believes that the large-scale implementation of stock tokenization still faces numerous challenges. The first is regulatory recognition. If tokens directly correspond to stock rights, they will inevitably touch upon the securities law framework. Cross-border compliance and trader protection will be core to the institutional design. Secondly, technical reliability is crucial, particularly in the areas of title confirmation, custody, clearing, and delivery. There's still a lack of mature models for ensuring on-chain tokens strictly correspond to off-chain assets. Furthermore, market acceptance will take time to develop, as institutional traders are particularly sensitive to compliance and risk. Furthermore, the market is exploring further avenues. Zhao Wei told Yicai Global that the development of RWAs often aligns with real-world economic trends. For example, cross-border financial products are a key breakthrough. As an international financial center, Hong Kong can use RWAs to bring more bonds and fund shares onto the blockchain, thereby serving traders in Asia and around the world. Regarding equity assets, limited pilot programs may be implemented in the short term, but as the regulatory framework becomes clearer, related explorations are worth watching.
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