Hong Kong Emerges as a Key Hub for Tokenizing Real-World Assets

The market for tokenized real-world assets (RWAs) has seen explosive growth, expanding from $1.5 billion in August 2023 to $38.86 billion by September 2026. This surge raises critical questions about how these assets can be practically issued, sold, and repaid to investors.

Hong Kong has emerged as a key jurisdiction for tokenized asset issuance, offering a robust regulatory framework, access to international investors, and experience with tokenized bond issuances. The city’s licensing and investor protection requirements provide a clear structure for bringing products to market, making it an attractive hub for RWA tokenization.

One model for tokenizing assets involves an offshore vehicle issuing a product backed by underlying assets, while a licensed Hong Kong intermediary sells it to professional investors overseas. The success of this model depends on the issuer having enforceable rights to the asset’s cash flows and ensuring timely repayment to investors.

The structure also requires a clear legal right to the underlying asset’s income, whether it be government bonds, export receivables, or music royalties. The contracts must specify who is entitled to the cash, who collects it, and how it reaches the issuer. Additionally, the product’s distribution relies on licensed Hong Kong intermediaries to verify investor eligibility and ensure compliance with securities rules.