#USCryptoWeek The rise of tokenization in Asia is diverting capital from the West, according to an expert.

Asian regulatory frameworks regarding tokenization are attracting investors from around the world, with Japan and Hong Kong leading the way in the adoption of real-world assets.

Asia's leadership in tokenization is increasingly capturing the attention of global investors, and the regulatory clarity of the region is attracting capital that was previously on the sidelines, according to Maarten Henskens, Growth Director at Startale Group protocols.

“We are seeing Western institutions establishing operations in Asia-Pacific not only to follow the capital but to engage in innovation,” he told Cointelegraph. Henskens pointed out the distinct but complementary approaches adopted by Japan and Hong Kong to promote the adoption of real-world assets (RWA).

Japan's regulatory framework has been deliberate and forward-looking, establishing a solid foundation of institutional trust. “MUFG's infrastructure for the issuance of security tokens is a good example of how the ecosystem is maturing,” he noted.

Japan's Payment Services Act (PSA) also allows trusted stablecoins to hold up to 50% of their reserves in low-risk government bonds and time deposits, demonstrating a thoughtful approach to regulation.

Hong Kong, on the other hand, has acted swiftly and launched the Ensemble project Sandbox as a fast-track regulatory innovation hub. “While Japan is building long-term depth, Hong Kong is demonstrating how agility can bring experimentation to life,” Henskens stated.