What To Know:
- Dr. Xiao Feng says RWA tokenization could help Hong Kong surpass London and become the world’s second-largest financial center.
- Hong Kong’s clear licensing system and full product lifecycle support give it an edge in issuing and trading tokenized assets.
- The city has launched a dedicated RWA registry platform, aiming to standardize tokenization and boost liquidity and transparency.
Dr. Xiao Feng, Chairman and CEO of HashKey, shared that Hong Kong could overtake London and become the world’s second-largest financial center with the right regulatory structure and institutional backing.
His remarks followed the recent notification issued by the People’s Bank of China and eight other ministries regarding new cryptocurrency regulations, known as Document 42. Against that backdrop, Hong Kong’s special administrative status gives it room to design a framework that bridges global capital and digital assets in a compliant way.
At the heart of Xiao’s argument is structure. From custody to issuance, underwriting, trading, and post-issuance compliance, Hong Kong can support a full product lifecycle. Financial centers rise on infrastructure, not hype.
Hong Kong Could Be World’s Second Largest Financial Hub with RWA
Currently, most RWA issuance in Hong Kong follows an offshore private placement model. Products generally fall into two categories: income rights-based and ownership-based. The distinction is technical, but the broader point is practical. The city already has the licensing clarity and market depth to support these structures.
Its mature regulatory system allows private placements, underwriting, and trading to function within a single ecosystem. That creates a closed loop from issuance to circulation. Investors gain clarity. Issuers gain predictability. Regulators retain oversight.
Trading infrastructure is another advantage. Hong Kong’s institutional framework provides a foundation for compliant on-chain peer-to-peer models. If tokenized assets are gradually integrated with decentralized finance tools and margin mechanisms under regulatory guardrails, the structure of RWA markets could shift toward faster settlement and deeper liquidity.
Speaking at a Crypto Finance Forum at the University of Hong Kong, Xiao drew a historical parallel. In 2008, Time magazine described New York, London, and Hong Kong as “Nylonkong,” a triad that defined global finance. Today, he believes RWAs could allow Hong Kong to move ahead in what he called an overtaking in a separate lane. The ambition is clear: reposition the order to “New Hong Lon,” with Hong Kong ranking second.
Regulators are moving in step. The Hong Kong Securities and Futures Commission has clarified that tokenizing real-world assets does not alter their legal nature. A tokenized bond remains a bond. A tokenized equity remains equity. This stance reduces legal ambiguity and provides comfort to institutional players.
In August, Hong Kong launched what officials described as the world’s first registry platform tailored specifically for RWA tokenization. Alongside it came a research report outlining both the promise and the constraints of the sector. The initiative aims to standardize how tangible assets such as real estate, gold, and equities are converted into blockchain-based tokens.
Meanwhile, a report, produced by a coalition that includes the Hong Kong Web3.0 Standardization Association and Hong Kong Polytechnic University, identified three prerequisites for scaling RWA tokenization. It pushes back against the broad claim that every asset class can or should be tokenized. Instead, it argues that scalability depends on legal clarity, technological readiness, and market demand aligning at the same time.
However, in September, China’s securities watchdog has advised some local brokerages to pause their RWA tokenisation business in Hong Kong, said two sources, signalling Beijing’s concerns of a euphoric drive towards a booming digital assets market offshore.
Also Read: Hong Kong Regulator Targets March for First Stablecoin Licences
