Reuters: The China Securities Regulatory Commission halts RWA tokenization business in Hong Kong, raising concerns about the fervor for digital assets in Hong Kong.

According to Reuters, the China Securities Regulatory Commission (CSRC) has informally notified some Chinese brokerages to suspend their real-world asset (RWA) tokenization business in Hong Kong. This move indicates that while Hong Kong is actively positioning itself as a digital asset hub, Beijing is taking a cautious stance towards the offshore digital asset boom. RWA tokenization typically converts traditional assets such as stocks, bonds, funds, and even real estate into digital tokens that can be traded on the blockchain. This action comes at a time when several Chinese companies are actively expanding their virtual asset businesses in Hong Kong, leading to a surge in the stock prices of related companies.

1. The Chinese regulatory authorities issued informal guidelines

According to informed sources, at least two major brokerages have recently received informal guidance from the China Securities Regulatory Commission, urging them to avoid engaging in RWA business abroad. One source pointed out that the latest regulatory guidelines aim to strengthen risk management for this emerging business and ensure that the assets claimed by companies have solid and legitimate business support.

This move comes as Hong Kong has been actively working over the past year to establish itself as a digital asset hub, with many companies (including Chinese brokerage firms) preparing to launch virtual asset trading, investment consulting, and virtual asset management services. In contrast, mainland China banned cryptocurrency trading and mining in 2021 and has maintained a cautious stance on digital assets. A previous report by Reuters also indicated that last month, Chinese regulators required domestic major brokerages to stop publishing research reports supporting stablecoins to curb the growing interest of domestic investors in this digital currency.

2. Hong Kong's Active Embrace and Beijing's Cautious Attitude

Beijing's latest actions stand in stark contrast to the statements made by the Hong Kong government. In June, Hong Kong stated that its Financial Services and the Treasury Bureau (FSTB) and the Hong Kong Monetary Authority (HKMA) were conducting a legal review of RWA tokenization based on international experience. According to data from RWA.xyz, the global RWA market is currently valued at approximately $29 billion. CITIC Securities cited industry forecasts last month, stating that this figure could exceed $2 trillion by 2030.

Although the regulatory guidelines are unofficial, some Chinese-funded brokerages have already launched RWA products in Hong Kong. For example, Guotai Junan International stated in June that it had obtained regulatory approval to provide cryptocurrency trading services, and its stock price once surged over 400%. The Hong Kong subsidiary of China International Capital Corporation also assisted a company in raising 500 million yuan by issuing digital bonds based on RWA.

3. Market Frenzy and Stock Price Volatility

The recent regulatory framework for stablecoins launched in Hong Kong has further stimulated market enthusiasm for cryptocurrencies. The Hong Kong Monetary Authority (HKMA) stated earlier this month that as of August 31, 77 companies have expressed their intention to apply for licenses. The stock prices of Chinese companies have also surged significantly due to their intentions to engage in the digital asset business. For example, Fosun International saw its stock price rise by as much as 28% in mid-August after its chairman Guo Guangchang met with senior Hong Kong officials to discuss stablecoin projects.

Conclusion

The China Securities Regulatory Commission's halt on brokers' RWA business in Hong Kong reveals the complex relationship between mainland China and Hong Kong regarding digital asset issues. Although Hong Kong is striving to become an open digital asset center, Beijing's cautious stance still impacts the business expansion of Chinese institutions in Hong Kong. This "informal" guideline is not a comprehensive ban, but more like a risk warning and cooling signal aimed at ensuring innovation occurs within a controllable and legal framework. This also reflects the ongoing consideration of mainland China's regulatory authorities in balancing financial innovation with risk control against the backdrop of the rapid growth of the global RWA market. In the future, whether Hong Kong can continue to promote digital asset innovation while maintaining its status as an international financial center will largely depend on how it coordinates with the regulatory stance of mainland China.