China Asset Management (Hong Kong) has launched the world's first tokenized money market fund denominated in Renminbi. This is not only a technological breakthrough for the Hong Kong financial market but also an important milestone in the process of Renminbi internationalization.

Tearing apart the 'scabs' of traditional finance

Friends who have invested in traditional money market funds know that the subscription and redemption of funds require a long wait of T+2 or even T+3. During this process, funds are 'frozen', resulting in a loss of several days of returns. Bloomberg data shows that the implicit costs incurred by global money market funds due to settlement delays amount to as much as $50 billion annually—this cost is ultimately borne by investors.

Tokenized money market funds transform fund shares into on-chain tokens through blockchain, achieving three major disruptions:

1. Real-time settlement (T+0), improving fund efficiency by 90%
2. Shares can be split down to the 0.01 yuan level, allowing small investors equal participation rights
3. Breaking the limitations of time and space, circulating globally 24/7

The 'compliance turnaround' of the crypto industry: from speculation to asset tokenization

For the past decade, the crypto market has been trapped under the label of 'speculation'. China Asset Management's breakthrough lies in anchoring with offshore Renminbi, Hong Kong dollars, and other fiat assets, achieving compliance tokenization through the Hong Kong Monetary Authority's Ensemble sandbox. This brings three insights to the crypto industry:

1. Demonstration effect: After the tokenization of money market funds, complex assets such as stocks, bonds, and REITs may follow suit.
2. Siphon effect: Providing new investment scenarios for 15 trillion offshore Renminbi assets.
3. Compulsive effect: Traditional asset management institutions will inevitably accelerate their layout in Web 3.0, either by developing tokenized products themselves or cooperating with crypto technology service providers.

The turbulent triple challenges

Of course, the beautiful picture of tokenized assets is not without concerns:

1. Inadequate legal regulation: The U.S. SEC still regards tokenized funds as securities, the EU's MiCA proposal is still in the adjustment period, while the attitudes towards crypto assets in mainland China and Hong Kong are still in a fragmented state.
2. Technological double-edged sword: Vulnerabilities in smart contracts may lead to hard fork disputes, and the 'centralization' paradox of private chains remains to be resolved.
3. Cognitive gap: For most ordinary investors, it may still be unclear what distinguishes a tokenized money market fund from Yu'ebao.

The grand chess game of Renminbi internationalization

It is worth noting that China Asset Management has chosen this time to launch the Renminbi tokenized fund, which coincides with the recent inclusion of the 'Renminbi counter' in the Hong Kong Stock Connect. With more means to preserve and increase the value of offshore Renminbi, it will also promote the willingness to settle in Renminbi in international trade. These new changes indicate that China is using Hong Kong as a pivot to steadily advance Renminbi internationalization through a combination of 'market opening + technological innovation + institutional guarantee'.