With the United States taking the lead, how can Hong Kong win the competition of “global tokenization”?

Editor's note: On July 3, the South China Morning Post website published an article by Cobo COO Lily Z. King, which deeply analyzed how Hong Kong can seize the initiative in the global tokenization competition. The article pointed out that as the tokenization of real world assets (RWA) accelerates into the mainstream, Hong Kong is building a new generation of financial infrastructure with a clear regulatory framework, open market strategy and active policy innovation. In the second half of this competition, the key will no longer be policy guidance, but whether the product really meets market demand.

 Lily Z.King at the Deloitte Digital Asset Forum in Hong Kong on July 8

 Participants included officials from the Hong Kong Financial Services and Treasury Department, the Securities and Futures Commission, the Legislative Council and the Hong Kong Monetary Authority, as well as industry bodies.

When BlackRock Chairman Larry Fink wrote in his annual letter to shareholders, “Every stock, every bond, every fund — every asset can be tokenized,” he was not predicting some distant transformation but a shift that is already underway — an evolution that is reshaping how capital is formed, how assets are distributed, and how financial opportunity is accessed.

At the core of this revolution is a concept that was once niche but is now rapidly entering the mainstream: the tokenization of real-world assets (RWA). Today, more than $24 billion of RWA is circulating on the public chain, covering yield-bearing U.S. bonds, private credit pools, tokenized commodities and real estate, etc. What was once seen as a "cryptocurrency experiment" is now becoming part of the global financial infrastructure - the underlying pipeline of the capital market is quietly being reconstructed.

So the question is no longer whether tokenization will reshape finance, but who will shape it.

In the “Policy Statement on Digital Asset Development 2.0” released on June 26, Hong Kong expressed its intention to lead.

The statement launched the “Leap” regulatory framework, expanding the scope of supervision to stablecoin issuers, custodians and RWA platforms. More importantly, it sends a clear signal: Hong Kong is not just “allowing tokenization, but actively advocating tokenization.”

"Leap" is the abbreviation of "Legal" for "Legal Simplification", "Expanding Tokenized Products", "Advancing Application Scenarios" and "People and Partnership". It promotes a broader vision by formulating a stablecoin license system, clarifying the regulatory framework for tokenized ETFs, and continuing previous pilot projects in digital bonds and green finance, encouraging the tokenization of various assets ranging from precious metals to renewable energy infrastructure.

But perhaps the most meaningful change is not what the policy specifically regulates, but how it defines tokenization—as a core pillar of the new financial infrastructure rather than a sandbox experiment. This alone has set Hong Kong apart from other markets.

In contrast, Singapore has adopted a more cautious approach, focusing on institutional participation and restricting retail investors, while Hong Kong has chosen a broader and more inclusive path. It allows retail users to participate under the premise of setting clear suitability rules, thus expanding the potential market space.

Compared to the EU’s prescriptive crypto asset market structure and the fragmented regulatory tug-of-war in the United States, Hong Kong offers a more unified, principles-based system that provides the clarity that innovators and investors need.

However, just because the tracks are laid doesn’t mean the trains will run on time. It’s easy to issue a tokenized asset, but the difficulty lies in whether anyone is willing to hold, trade and trust it.

 Jeremy Allaire (third from left), CEO and co-founder of Circle Internet Group, one of the world's largest stablecoin issuers, and Heath Tarbert (second from left), President of Circle, at the New York Stock Exchange on the day of the company's initial public offering on June 5.

 Photo: Reuters

Too many tokenized projects learned this the hard way: the technology worked, but the market didn’t buy it. Lacking distribution channels, market demand, or practical relevance, many products simply got shelved. The bottleneck is not technology or regulation, but whether the business value actually exists. The true test is whether a tokenized asset actually solves a problem for a well-defined user group.

Of course, there are projects that have passed this test and successfully expanded. For example, tokenized U.S. Treasury products have gained widespread adoption among savers around the world because they provide stable and transparent yields, especially in emerging markets that lack safe income channels.

For example, protocols such as Maple Finance have opened up new paths in the private lending sector by matching institutional borrowers with crypto-native lenders and implementing transparent risk control on the chain, making the product bidirectionally available.

These successes do not come from novel technology, but from the perfect match of assets, users and packaging methods.

Hong Kong's local ecosystem is also evolving in this direction. The Hong Kong Monetary Authority's "Project Ensemble" is experimenting with tokenized bonds, funds, carbon credits, charging pile infrastructure, and supply chain finance. These projects have great potential, but there are no blockbuster projects that can truly connect the three elements of assets, audiences, and usage scenarios on a large scale.

All the elements are in place, and what is needed next is "market traction". Hong Kong has laid a solid foundation: credible projects with clear regulation, institutional recognition, and public-private collaboration are constantly advancing. Hong Kong is increasingly seen as a safe and clearly structured digital asset experimental environment, coupled with its potential as a "bridgehead" for China's digital asset strategy, making its significance far beyond the local market itself.

But the hardest part has just begun. The next stage of competition will be determined by "product-market fit" rather than more policies. Can Hong Kong attract Southeast Asian savers to invest in truly profitable stablecoin products? Can China's industrial assets be connected to global capital through compliant digital packaging? Can a new generation of RWA products that are not only legal and compliant, but also have real market demand be incubated?

These questions will determine whether RWA is just a trend or a lasting change; they will also determine whether Hong Kong can become the global tokenization capital of this new era. If successful, Hong Kong will not only be a leader, but also one of the definers of the future financial form.