The China Securities Regulatory Commission (CSRC) has instructed broker firms to halt their real-world asset (RWA) tokenisation activities in Hong Kong, according to a Reuters report. China is showing signs of caution with this move, amidst ongoing efforts by firms to make the special administrative region (SAR) a global digital-asset hub. The CSRC reportedly guided at least two leading brokerages to halt offshore tokenisation work. This step reflects concerns of regulators about risk management. On the other hand, Hong Kong continues to introduce initiatives such as stablecoin licensing and a comprehensive virtual asset roadmap.
China Remains Cautious as Hong Kong Expands Digital-Asset Ambitions
Traders who support tokenisation believe that it is a step in the right direction to achieve low volatility and lay a stronger foundation for digital finance, but regulators are still concerned about how such assets will interact with capital markets. In a recent press release, the Shanghai Stock Exchange (SSE) said that the CSRC has always prioritised transparency and stability, which is a reflection of Beijing’s cautious approach since its nationwide ban on crypto trading and mining in 2021.
On the contrary, Hong Kong has been actively positioning itself as a digital asset hub. A new licensing framework for fiat-based stablecoins was introduced by the Securities and Futures Commission (SFC).
Issuers are required to obtain mandatory approval from the Hong Kong Monetary Authority (HKMA). Over 77 firms have already expressed their interest in participating, highlighting the region’s determination to lure in foreign businesses.
Despite the CSRC’s caution, observers view the current restrictions as a brief cooling-off period rather than a reversal of interest. Clearpool Co-founder, Jakob Kronbichler, believes that regulators seem to be adopting a “measured approach” to ensure tokenised products incorporate safety with capital markets.
Even though longer-term alignment across jurisdictions could improve clarity, Giorgia Pellizzari of Hex Trust conveyed that the key risks for firms involved are delayed product launches and increased compliance obligations.
Several Chinese firms have already ventured into tokenisation projects in Hong Kong. China Merchant Bank International facilitated the issuance of a 500 million yuan digital bond for Shenzhen Futian Investment, while GF Securities introduced yield-bearing “GF tokens”. Seazen Group also launched an institute in the region to explore tokenisation. However, uncertainty around cross-border operations could affect short-term capital flows.
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