Editor’s note: An article by Cobo COO Lily Z. King published on South China Morning Post's website on July 3 delves into how Hong Kong is seizing the initiative in the global tokenization competition. The article points out that as real-world asset (RWA) tokenization accelerates into the mainstream, Hong Kong is building a new generation of financial infrastructure with a clear regulatory framework, open market strategies, and proactive policy innovations. In the latter half of this competition, the key will no longer be policy direction but whether products truly meet market demand.
On July 8, Lily Z. King spoke at the Deloitte Digital Assets Forum in Hong Kong.
Participants included officials from Hong Kong's Financial Services and the Treasury Bureau, the Securities and Futures Commission, the Legislative Council, and the Monetary Authority.
When Larry Fink, the chairman of BlackRock, wrote in his annual letter to shareholders: 'Every stock, every bond, every fund—every asset can be tokenized,' he was not predicting a distant transformation, but rather describing an ongoing shift—one that is reshaping the ways capital is formed, assets are distributed, and financial opportunities are accessed.
At the core of this transformation is a concept that was once niche but is now rapidly entering the mainstream: tokenization of real-world assets (RWA). Currently, over $24 billion of RWA is circulating on public chains, covering yield-generating US Treasuries, private credit pools, tokenized commodities, and real estate. What was once seen as a 'curious experiment' in crypto is now becoming a part of the global financial infrastructure—the underlying pipeline of capital markets is quietly being restructured.
So the question is no longer whether tokenization will reshape finance, but rather who will shape it.
In the digital asset development policy statement 2.0 released on June 26, Hong Kong expressed its intention to lead.
The statement launched the 'Leap' regulatory framework, expanding the scope of regulation to stablecoin issuers, custodians, and RWA platforms. More importantly, it sends a clear signal: Hong Kong is not just 'allowing tokenization' but is actively advocating for it.
"Leap" is an acronym for "Legal Simplification," "Tokenized Product Expansion," "Application Scenario Advancement," and "People and Partnership Development." It promotes a broader vision by establishing a stablecoin licensing 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 from precious metals to renewable energy infrastructure.
But perhaps the most meaningful change lies not in what the policy specifically regulates, but in how it defines tokenization—as a core pillar of 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, more inclusive path. It allows retail users to participate under clearly defined suitability rules, expanding the potential market space.
Compared to the EU's normative framework for crypto assets and the fragmented regulatory tug-of-war in the US, Hong Kong offers a more unified, principles-based system that provides the clarity needed by innovators and investors.
However, simply laying the tracks does not mean the train will run on time. Issuing a tokenized asset is easy; the challenge is whether anyone is willing to hold, trade, and trust it.
On June 5, 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 IPO.
Photo: Reuters
Too many tokenization projects realize this only through pitfalls: the technology is fine, but the market does not buy in. Lacking distribution channels, market demand, or actual relevance, many products end up being shelved. The bottleneck is not in technology or regulation, but whether there is true commercial value. The real test is whether a certain tokenized asset truly solves a problem for a clearly defined user group.
Of course, there are also projects that have passed this test and successfully expanded. For example, tokenized US Treasury products have gained widespread adoption among global savers for providing stable and transparent yields, especially in emerging markets that lack secure yield channels.
Protocols like Maple Finance have opened new pathways in the private credit space by matching institutional borrowers with crypto-native lenders and achieving on-chain transparent risk control, making products bidirectionally available.
These successes do not come from novel technologies, but from the perfect alignment of assets, users, and packaging.
The local ecosystem in Hong Kong 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 scenarios. These projects hold great potential, but truly successful projects that can scale and connect the three elements of assets, audiences, and use cases have yet to emerge.
All elements are now in place; what is needed next is market traction. Hong Kong has laid a solid foundation: clear regulation, institutional recognition, and credible projects of public-private collaboration are continuously advancing. Hong Kong is increasingly viewed as a safe and clearly structured digital asset experimental environment, and its potential as China’s digital asset strategic 'bridgehead' makes its significance far exceed the local market itself.
But the hardest part is just beginning. The next phase 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 it connect China's industrial assets to global capital through compliant digital packaging? Can it incubate a new generation of RWA products that are not only legal and compliant but also have genuine market demand?
These questions will determine whether RWA is just a trend or can become a lasting transformation; they will also determine whether Hong Kong can become the global capital of tokenization in this new era. If successful, Hong Kong will not only be a leader but also one of the definers of future financial forms.
