China Merchants Bank Tokenizes $3.8B Fund in Hong Kong Despite Ban Back Home

China Merchants Bank International Asset Management (CMBI), a Hong Kong-based subsidiary of one of China’s largest commercial banks, has captured the attention of the crypto world by tokenizing its $3.8 billion money market fund on BNB Chain — a move that signals both ambition and audacity in a region where regulatory oversight remains a looming question mark.

The launch introduces two tokens, CMBMINT and CMBIMINT, which allow accredited investors to gain direct on-chain exposure to the fund.

Launched in 2024 under the CMB International Open-ended Fund Company, the fund primarily invests in US dollar-denominated deposits and state-backed money market instruments across major economies including the US, Singapore, the EU, mainland China, Hong Kong, Macau, and Taiwan.

By holding CMBMINT or CMBIMINT, investors essentially gain the ability to “dip their fingers” into this $3.8 billion institutional fund, participating in traditional, low-risk investments in US dollar-denominated deposits and government-backed instruments — all through a blockchain interface.

According to the Hong Kong Stock Exchange, the fund’s assets under management have grown 24% in just four months, signaling strong market confidence in its tokenized structure.

Beyond passive exposure, the tokenization enables additional financial functionalities. Using the RWA infrastructure provider OnChain, investors can leverage the tokens across decentralized finance (DeFi) applications, including lending platforms and yield-generating strategies.

This dual functionality positions the token not just as a gateway to traditional assets but also as a bridge into the broader DeFi ecosystem, offering flexibility and potential for additional returns.

Regulatory Tension: Hong Kong vs Mainland China

Yet the backdrop is anything but smooth. Mainland Chinese regulators have reportedly urged Hong Kong brokerages to pause RWA projects, raising concerns about whether tokenized institutional funds could face sudden clampdowns.

The Hong Kong Monetary Authority has remained silent, leaving the crypto community speculating about how authorities will react to this ambitious foray.

CMBI’s bold move demonstrates the increasing intersection between traditional finance and blockchain innovation, but it also highlights a key challenge: navigating regulatory gray zones.

Investors now have unprecedented access to a $3.8 billion institutional fund on-chain, but the looming question remains whether regulators will embrace innovation or impose restrictions that could freeze or complicate digital fund operations.

This launch underscores that Asia’s financial landscape is at a crossroads. Tokenization promises liquidity, accessibility, and integration with DeFi, but without clear regulatory guardrails, even major institutions face uncertainty.

The CMBI case illustrates the high-stakes gamble for banks entering blockchain: innovate and risk regulatory pushback, or remain conventional and risk being left behind.

For crypto enthusiasts, the unfolding drama between innovation and oversight is as captivating as the assets themselves — and it may define the next era of finance in the region.