Hong Kong's financial circle is beginning to stratify: foreign institutions continue to study quant, hedging, and IPOs as usual; meanwhile, Chinese institutions have an additional new task—researching RWA (Real World Assets).

RWA refers to the tokenization of real-world assets, especially those generating stable income, such as hotel rentals, photovoltaic power generation, and even stocks, bonds, commodities, etc., using blockchain technology, enabling them to be traded, managed, and circulated on-chain.

"This is an arrangement from our domestic headquarters; most sister institutions are actively trying," multiple financial practitioners at Chinese institutions in Hong Kong told Tencent News Qianwang (Insight), stating they would "attempt to implement RWA projects." Some directly referred to it as an "assigned task or mandatory homework."

A head of a top fund company in Hong Kong told Tencent News Qianwang that many institutions had received requests from their domestic headquarters over this period to explore commercial opportunities in RWA projects.

Tencent News Qianwang learned that, similar to the launch of most financial products in Hong Kong, these Chinese financial institutions exploring RWA projects require extensive lawyer involvement. This has also led to increased business in the crypto sector for some Hong Kong law firms, including King & Wood Mallesons and JunHe LLP.

This has made practitioners at Chinese institutions in Hong Kong even busier. On August 7, Ant Digital Technologies and other institutions co-hosted an industry conference on RWA at the Hong Kong Exchanges and Clearing Limited (HKEX). Attendees included Vice Chairman of the National Committee of the Chinese People's Political Consultative Conference (CPPCC) and former Hong Kong SAR Chief Executive Leung Chun-ying, and Hong Kong SAR Government Secretary for Financial Services and the Treasury Christopher Hui. The organizers may have underestimated the enthusiasm of Hong Kong's financial circle. When it opened at 2:30 PM, the venue was packed; most people had no seats and stood at the back.

"It's been a long time since I've seen a crypto event in Hong Kong attract so many people from traditional institutions," a person from a traditional financial institution present told Tencent News Qianwang, adding that he encountered many acquaintances.

I. Eager Attempts at RWA by Chinese Financial Institutions in Hong Kong

"If the Hong Kong 'Stablecoin Ordinance' hadn't been introduced, this wave of enthusiasm from Chinese institutions wouldn't have appeared," a head of a top asset management institution in Hong Kong summarized the reason.

Executives like him, working at Chinese asset management institutions, have traveled between the mainland and Hong Kong multiple times recently, discussing potential business opportunities in Hong Kong under the stablecoin rollout with headquarters and some local regulators.

A head of a state-owned asset management company stationed in Hong Kong told Tencent News Qianwang, "This current wave is actually top-down. The headquarters hopes the institutions in Hong Kong will try to do RWA to prepare for the ecological development after stablecoins are issued."

Before this, except for some Chinese institutions like ChinaAMC (Hong Kong), Taiping Asset Management (Hong Kong), Harvest Fund, and Bosera Fund issuing some crypto products in Hong Kong, most Chinese institutions in Hong Kong had not ventured into the crypto business. Some hadn't even upgraded their asset management licenses to categories allowing participation in crypto products.

Public information shows that as a top Chinese fund company in Hong Kong, China Asset Management (Hong Kong) Co. Ltd. issued Bitcoin spot ETFs and Ethereum spot ETFs in 2024, a Hong Kong dollar money market fund tokenization fund in February 2025, and then launched RMB money market fund tokenization and USD money market fund tokenization funds in July this year.

As of the close on August 21, ChinaAMC (Hong Kong)'s Bitcoin spot ETF size was approximately HKD 2.072 billion. Meanwhile, the Bitcoin ETF sizes for Harvest Fund and Bosera Fund were HKD 260 million and HKD 1.475 billion, respectively.

Tencent News Qianwang learned that within ChinaAMC (Hong Kong)'s tokenized money market fund products, the Hong Kong dollar fund tokenization size is about HKD 1.2 billion, and the USD fund tokenization portion is USD 40 million.

CPIC Asset Management (Hong Kong) launched its first tokenized USD money market fund product (CPIC Estable MMF) in March this year, with an issuance size of USD 100 million. Public data shows that CPIC Asset Management is an asset management institution under China Taiping Insurance Group, with assets under management in Hong Kong exceeding HKD 70 billion. It upgraded its Type 1 and Type 4 licenses in September 2023 to participate in virtual asset fund distribution and investment advisory services, making it one of the first asset management companies to obtain a virtual asset license in Hong Kong.

Regarding why USD money market funds were chosen as the preferred product for tokenization, Zhou Chenggang, CEO of CPIC Asset Management (Hong Kong), told Tencent News Qianwang that the decision was mainly based on investor demand and market liquidity considerations.

Zhou explained that tokenized money market fund products are relatively easier for institutional investors to understand. Furthermore, the current significance of creating tokenized products lies in exploration and preparation, not pursuing scale.

"There aren't many suitable financial targets for tokenization in Hong Kong right now. Besides stable money market funds, some are trying equity tokenization, and even some are exploring Private Credit product tokenization," said a head of a state-owned fund, adding that most institutions had no prior exposure to crypto products. In mid-to-late July, as the stablecoin frenzy heated up in Hong Kong, they all had to start "rushing" projects, some even temporarily forming teams to build products just to "complete the homework."

A head of a Chinese institution in Hong Kong told Tencent News Qianwang that this is not surprising, as everyone will have to learn about on-chain products in the future. In his view, more financial products may subsequently go on-chain.

A relatively more optimistic head of a top Chinese fund in Hong Kong told Tencent News Qianwang that in the next 5-10 years, all current financial products will be on-chain, solving the 7x24 hour trading issue, making it more efficient and cost-effective. "The development of the financial industry is consistent with the current trend of AI development; both will undergo comprehensive transformation."

What excites these heads of Chinese asset management institutions in Hong Kong is that the US market already has successful pioneers, like BlackRock. Public information shows that BlackRock listed its Bitcoin spot ETF, the iShares Bitcoin Trust (IBIT), on NASDAQ on January 11, 2024. As of the close on August 20, the fund's size exceeded USD 86.77 billion, making it the fastest-growing ETF in history, breaking multiple industry records. Subsequently, BlackRock launched the iShares USD Money Market Fund (BUIDL) on March 20, 2024, its first tokenized USD money market fund.

More importantly, RWA growth in the US market is also very rapid. Public data shows that as of August, the RWA market size is approximately USD 24-25 billion (excluding stablecoins). Among them, RWA with underlying assets as private credit exceeds USD 13 billion, followed by RWA with underlying assets as US Treasury bonds reaching USD 8 billion, the latter including about USD 2.38 billion from asset management giant BlackRock's tokenized fund BUIDL.

"Want to become China's BlackRock," the aforementioned head of the top Chinese fund told Tencent News Qianwang. As the world's largest asset manager, BlackRock "has already revolutionized itself," and as Chinese institutions in Hong Kong, "we cannot continue struggling in the red ocean of traditional financial markets like bonds and stocks."

Seizing the changes in Hong Kong's policies and industry is key to timely迎合 (meeting/adapting to) the development and transformation of the entire capital market. This is the original intention of most asset management heads in Hong Kong rushing into RWA products with their teams. These optimists believe the current company strategy is not difficult to understand: only by laying out plans early during technological iterations can one have the opportunity to overtake on curves within the industry and seize new opportunities.

II. Practitioners Call It "Speculative Fever, Need to Cool Down"

However, not everyone believes the current hot RWA projects are suitable for all institutions to participate in. Zhou Chenggang, CEO of CPIC Asset Management (Hong Kong), told Tencent News Qianwang that RWA in Hong Kong is currently "overheated, it's speculative fever, need to cool down."

The swarming optimists believe all financial assets in Hong Kong will be on-chain in the next 5-8 years. But Zhou does not fully agree. He believes all financial assets will have the opportunity to go on-chain in the future, but a specific timeline cannot be predicted yet, as it depends on the development of the entire RWA ecosystem.

More importantly, not all assets need to go on-chain. Putting assets on-chain itself needs to comply with financial logic and should be done to solve specific problems. Like many financial practitioners in Hong Kong, Zhou acknowledges blockchain technology, but he stated, "I oppose mythologizing any new technology. Many people mistake what RWA might achieve many years later for what can be done now. This is actually a misperception and can mislead the market."

There are quite a few who share Zhou's views. Multiple fund heads in Hong Kong (including foreign and some Chinese) and crypto insiders said that issuing RWA products in Hong Kong at this stage is more about exploring the meaning of RWA.

A veteran executive in the crypto circle pointed out more directly: if the underlying assets of an RWA can quickly secure financing in the traditional financial领域 (sphere), it means their liquidity isn't poor, and going on-chain in the currently relatively low-liquidity RWA market wouldn't be their first choice. Similarly, for underlying assets that are not sufficiently high-quality, even if put on-chain, their liquidity would still be concerning.

"The Hong Kong RWA market already shows signs of overheating risk," multiple practitioners in Hong Kong, including Zhou Chenggang, expressed. They believe RWA definitely has significant room for development in Hong Kong's future, but the current RWA ecosystem in Hong Kong is still in a very early stage, including aspects like RWA's financing capability and liquidity, which have more room for improvement.

Following the stablecoin frenzy, the heat around RWA also rose. An asset management professional currently planning to launch an RWA product with his team revealed to Tencent News Qianwang that he has been approached by many teams of varying quality; some teams aren't even clear about the legal rights corresponding to RWA assets.

"RWA is actually a product built upon an entire legal system," Zhou Chenggang holds a similar view. He believes that whether it's the rights of investors holding tokens of RWA assets or the ownership of the underlying assets corresponding to those rights, clear legal regulations are necessary.