The RWA Frenzy Among Chinese-funded Institutions
RWA refers to the tokenization of assets in the real world that can generate stable income (such as hotel rentals, photovoltaic power generation, and even stocks, bonds, commodities, etc.) through blockchain technology, enabling them to be traded, managed, and circulated on-chain.
Currently, exploring RWA projects has become a trend among Chinese-funded institutions in Hong Kong, driven by the strategic deployment of their domestic headquarters. Most institutions view it as an "assigned task or mandatory homework." Many institutions have previously received requirements from their headquarters to actively explore related business opportunities.
Similar to the implementation process of most financial products in Hong Kong, Chinese-funded institutions' exploration of RWA projects involves extensive participation from lawyers. This has directly driven growth in crypto-related business for some law firms in Hong Kong. Top law firms such as King & Wood Mallesons and JunHe are among them, making the work of professionals in Chinese-funded institutions in Hong Kong even busier.
On August 7, Ant Digital Technologies and other institutions jointly hosted an RWA industry conference at the Hong Kong Exchange. Attendees included Liang Zhenying, Vice Chairman of the National Committee of the Chinese People's Political Consultative Conference and former Chief Executive of the Hong Kong Special Administrative Region, and Christopher Hui, Secretary for Financial Services and the Treasury of the Hong Kong SAR government.
In his speech, Liang Zhenying pointed out that standardization is a key bridge connecting real-world assets with digital finance. The Hong Kong Web3.0 Standardization Association should play the role of a standards "anchor," helping to enhance the internationalization of the RMB and the vitality of the global capital market.
Perhaps the organizers underestimated market enthusiasm. By the time the conference opened at 2:30 PM that day, the venue was already full, with most participants having to stand at the back. The scene attracted a large number of traditional financial institution professionals, a sight rarely seen in Hong Kong's crypto circle events for a long time.
The Driving Role of the Stablecoin Regulations
The enthusiasm of Chinese-funded institutions for RWA in this round is closely related to the introduction of Hong Kong's "Stablecoin Ordinance." The ordinance officially takes effect on August 1, 2025, making it the world's first comprehensive regulatory framework for fiat-backed stablecoins.
Recently, several executives of Chinese-funded asset management institutions in Hong Kong have frequently traveled between the mainland and Hong Kong to discuss business opportunities in Hong Kong under the backdrop of stablecoin implementation with their headquarters and some local regulatory agencies. This wave of exploration is characterized as "top-down," with headquarters hoping that their Hong Kong-based institutions will first lay out RWA to lay the foundation for ecological development after the issuance of stablecoins.
Industry Optimism and Concerns
Currently, there are limited suitable financial targets in Hong Kong that can be tokenized. Besides stable money market funds, some institutions are experimenting with equity tokenization and even exploring the tokenization of private credit products.
As most institutions had no prior exposure to crypto circle products, after stablecoins sparked a frenzy in Hong Kong in mid-to-late July, many institutions began urgently "scrambling" to put together projects, even temporarily forming teams to build products to complete their "homework."
Optimistic views within the industry believe that in the future, everyone will need to learn about on-chain products, and subsequently, more financial products may be put on-chain. Some even suggest that within the next 5-10 years, all financial products will be on-chain, which will solve the problem of 7x24-hour trading, improve efficiency, and reduce costs. The development of the financial industry, much like the current AI trend, will undergo comprehensive transformation.
Challenges and Opportunities in the Industry Ecosystem
Currently, Hong Kong's RWA ecosystem is still in a very early stage, with significant room for improvement in financing capabilities and liquidity. As the stablecoin frenzy drives up interest in RWA, the quality of teams working on RWA projects varies widely, with some teams even unclear about the legal rights corresponding to RWA assets.
In fact, RWA is a product built on a complete legal system. The rights of investors holding RWA asset tokens, the ownership of the underlying assets corresponding to those rights, and other aspects all require clear legal regulations.
It is worth noting that the enactment of Hong Kong's "Stablecoin Ordinance" is reshaping the industry landscape. According to the ordinance, stablecoin issuers must meet strict reserve requirements (cash reserves ≥80%) and undergo continuous supervision by the Hong Kong Monetary Authority. This framework not only provides a compliant payment tool for RWA transactions but also imposes higher requirements on the authenticity and transparency of asset tokenization.
For example, Ant Digital Technologies has initiated an application for a stablecoin license, planning to apply blockchain technology and stablecoin innovation to real and reliable large-scale applications. Chinese securities firms such as Guotai Junan International and CMBI have also officially entered the virtual asset trading services sector by upgrading their licenses.
In the future, as regulatory frameworks improve and technical infrastructure matures, RWA is expected to move from proof-of-concept to large-scale application. However, during this process, how to balance innovation and risk, technical efficiency and legal compliance will be a core issue facing all participants.
As Eddie Yue, Chief Executive of the Hong Kong Monetary Authority, stated: "The development of RWA should not be a race, but a marathon requiring patience and wisdom."
