China Halts Hong Kong’s RWA Tokenization Push: The Inside Story

Hong Kong's ambitious real-world asset tokenization experiment hits regulatory turbulence as mainland China pulls the emergency brake.

The Regulatory Freeze

Beijing's sudden intervention sends shockwaves through Hong Kong's digital asset ecosystem. Just as global financial centers race to tokenize everything from real estate to fine art, China's cautious stance creates regulatory whiplash.

Market Impact

Trading volumes in Hong Kong's digital asset markets dip following the announcement. The pause affects multiple tokenization projects targeting Asian investors seeking exposure to traditionally illiquid assets.

Strategic Pause or Permanent Halt?

Industry insiders debate whether this represents temporary caution or fundamental opposition to RWA tokenization. Some see it as China's characteristic risk-aversion, while others detect deeper concerns about capital flight disguised as innovation.

Global Context

The move contrasts sharply with Singapore and Dubai's aggressive embrace of asset tokenization. Hong Kong finds itself caught between its role as international financial hub and Beijing's tightening oversight.

Because nothing says 'financial innovation' like waiting for permission from the same people who brought you capital controls.

Key Takeaways

How is Hong Kong advancing its digital finance initiatives?

Hong Kong advances tokenized deposits, RWA trading, and crypto exchange licensing, in collaboration with the HKMA and SFC.

What is the current size of the global RWA market?

The global RWA market surpassed $25 billion in Q2 2025, driven by institutional demand. Industry forecasts suggest it could exceed $2 trillion by 2030.

China’s top securities regulator has reportedly urged certain domestic brokerages to put the brakes on their real-world asset (RWA) tokenization activities in Hong Kong.

The move, according to two sources, reflects Beijing’s growing caution over the rapid momentum of digital asset experiments taking place offshore.

China asks brokers to pause RWA

The China Securities Regulatory Commission (CSRC) contacted at least two firms in recent weeks, asking them to halt tokenization businesses offshore.

The guidance aimed to strengthen risk controls and ensure corporate claims were supported by legitimate operations.

This came as Hong Kong positioned itself as a digital asset hub, licensing exchanges and reviewing legal frameworks for tokenized deposits and RWAs.

It goes on to show that, despite previously leading in crypto, China has been cautious since banning trading and mining in 2021 over financial stability concerns.

Hong Kong’s RWA approach

Meanwhile, Hong Kong advances tokenization, including tokenized deposits and RWA trading, with Financial Services and the Treasury Bureau (FSTB) and the Hong Kong Monetary Authority (HKMA) reviewing the legal framework.

The global RWA market exceeded $25 billion in Q2 2025, driven by institutional demand, and could surpass $2 trillion by 2030.

Hong Kong is also advancing in digital finance. HKMA and SFC initiatives are enhancing efficiency, liquidity, and investor protection.

Reportedly, it plans to approve more crypto exchange licenses by the end of 2025, building on previous frameworks from 2018 and 2020.

Seazen enters digital assets

Meanwhile, Chinese property developer Seazen Group has announced a digital assets institute in Hong Kong to explore RWA tokenization.

Seazen said it planned to tokenize intellectual property and asset income. It is a MOVE that could make it the first major Chinese developer to raise funds through tokens.

Other firms signaled interest, too. HK Asia Holdings recently acquired 7.88 BTC (~$761,705) after a 1,700% stock surge. AnchorX also launched AxCNH, the world’s first stablecoin pegged to the offshore Chinese Yuan. 

These initiatives show growing digital asset adoption, with China prompting global caution amid rising crypto market competition.