China’s Securities Regulator Clamps Down on RWA Tokenization in Hong Kong

Chinese brokerages face regulatory headwinds as the China Securities Regulatory Commission (CSRC) instructs firms to suspend real-world asset (RWA) tokenization ventures beyond the mainland. The informal directive, delivered to at least two major securities firms, underscores Beijing's continued skepticism toward crypto-linked innovations despite Hong Kong's push to become a digital finance hub.

RWA tokenization—the process of converting traditional assets like equities and property into blockchain-traded tokens—had gained traction among Chinese firms operating in Hong Kong. The CSRC's intervention aims to ensure robust risk controls and legal compliance, reflecting mainland China's starkly contrasting stance to Hong Kong's pro-crypto policies.

Hong Kong authorities have actively courted virtual asset businesses over the past year, licensing trading platforms and encouraging DeFi development. Meanwhile, mainland China maintains its 2021 ban on cryptocurrency transactions and mining, with regulators recently discouraging brokerages from publishing stablecoin-friendly research.