Hong Kong's window to the world. In 2025, the popularity of RWA (tokenized real-world assets) in Hong Kong continued to grow. From photovoltaic power plants to computing power assets, more and more mainland companies chose to explore this new path in Hong Kong.
Policy support is clear: Hong Kong's Stablecoin Ordinance has officially been implemented, the Digital Asset Development Policy Statement 2.0 has clarified regulatory direction, and the HKMA and the Securities and Futures Commission are experimenting with providing a pilot environment for the market through the Ensemble Fintech Sandbox. However, RWAs are not easy to obtain; rather, they are a difficult journey. Unlike traditional financing, they require companies to simultaneously overcome challenges in compliance, technology, and capital markets. Delays in any of these areas can bring the entire project to a standstill.
At the same time, this is not an experiment that belongs only to Hong Kong.
Project Guardian, promoted by the Monetary Authority of Singapore (MAS), has explored the tokenization of cross-border bonds and foreign exchange. US-based banks BlackRock and JPMorgan Chase are continuously increasing their investment in tokenized funds and settlement networks. The EU's MiCA framework is gradually providing a unified compliance baseline for RWAs. Hong Kong is unique in that it has access to both mainland China's vast asset pool and international investor flows, making it a cutting-edge testing ground and presenting a double challenge.
The Account Book Under the Iceberg: Cost and Preparation of Starting with 3 Million
On the surface, RWA appears to be a simple matter of "putting assets on the blockchain and then finding investors." However, when it comes to actual implementation, the bill can easily reach 3 million to 6 million RMB. The technical aspects require blockchain deployment, IoT integration, smart contract development, and third-party audits. According to research by Dacheng Law Firm, even with standardized solutions like Ant Chain, development and maintenance costs still amount to approximately 800,000 to 1.2 million RMB.
Compliance costs are a close second. Dual domestic and international audits, cross-border legal opinions, and data export filings constitute the "hidden expenses" that companies must face. Liu Lei's team's practical observations show that the initial stages of RWA issuance alone can cost between HK$3 million and HK$5 million for legal, auditing, and custodial fees. Adding brokerage underwriting commissions can increase the actual cost. Industry insiders generally estimate that Big Four audit reports cost between RMB 300,000 and 500,000, and cross-border legal opinions cost between RMB 400,000 and 600,000. The approval process for data export security assessments often takes 45 to 60 business days, and if they fail, a reapplication process can take three months.
The heaviest burden is on brokerage and channel fees: licensed brokerages control the key links of underwriting, fundraising and listing, and their fees typically range from 2 to 3 million yuan; if funds are repatriated through QFLP or QDLP, a channel fee of approximately 1% of the fundraising amount must be paid; if large institutions such as sovereign funds are introduced, the fundraising cost may increase by another 2 to 5%.
Using regional comparisons as a reference, the caliber also needs to be updated. Singapore has implemented the DTSP (Digital Token Service Providers) framework under Section 9 of the Financial Services and Markets Act 2022 (FSMA), effective June 30, 2025. This explicitly mandates a license for companies established or operating in Singapore that provide digital token services to overseas clients. According to research by Dentons, the framework's approval standards are becoming stricter rather than "faster and looser," indicating that the "efficiency gap" between regions is narrowing. Hong Kong's unique advantage remains its backing of mainland assets and its bilingual legal ecosystem, but to achieve this position, companies must incur tangible costs in time and money.
From trial to normalization: investment and preparation in licenses, manpower, and time
The collaboration between Caocao Travel and Shengli Securities focuses on three key areas, building a complete digital financial ecosystem. Treating RWA as a one-off experiment and incorporating it into a regular corporate financing tool are two completely different approaches. The former is a targeted experiment, while the latter is a systematic project. The entire process typically takes 18 to 24 months: 1 to 3 months for asset screening and title confirmation, 2 to 4 months for cross-border structuring and establishing the SPV, 3 to 6 months for blockchain technology integration, 6 to 12 months for Hong Kong licensing and sandbox testing, and approximately 1 to 2 months for issuance and capital repatriation.
Regulatory requirements determine the fundamentals of "licensed operations." Licenses 1 (Securities Trading), 7 (Automated Trading), and 9 (Asset Management) are the core licenses for security token businesses. The application cost for a single license typically exceeds HK$1.5 million, and requirements include paid-in capital of at least HK$5 million, the appointment of a licensed Responsible Officer (RO) with at least five years of regulatory experience, and the establishment of a comprehensive AML/KYC system. If the business extends into the realm of Virtual Asset Service Providers (VASPs), the overall investment can rise to tens of millions of yuan.
At the industry level, the landscape of collaboration is also shifting. Guotai Junan International has partnered with Ant Digits, taking the integration of "traditional brokerage + technology platform" a step further. Other institutions are exploring collaborations with virtual asset platforms. For example, HashKey and GF Securities are exploring tokenization and market-making services, demonstrating the diverse integration of brokerages and FinTech. Regardless of how the paths diverge, the true determinant of success or failure remains whether a company possesses comprehensive capabilities across legal, accounting, and technology sectors, as well as the patience for long-term investment.
Green Lights and Red Lights: A Strict Asset List
Dacheng Law Firm proposed three types of asset standards: "green light - yellow light - red light". This list has almost become the "unspoken rule" of the industry in practice.
Green-light assets emphasize clear ownership and stable cash flow. For example, photovoltaic and wind power plants must provide a recent year's worth of power generation data and pass green finance certification. Charging stations must be connected to the IoT, linking to the State Grid's real-time electricity usage data, and pass sandbox cash flow testing. Cross-border receivables from central and state-owned enterprises typically have an annualized yield threshold of around 6%. Technology patents must be PCT-certified and demonstrate stable licensing fees. Traffic flow forecasting models for toll roads must maintain an error of less than 5%. Yellow-light assets, such as rental income rights for Grade-A office buildings in core business districts, commodity contracts, and authenticated cultural relics, require greater risk buffers and additional disclosures due to higher valuation, liquidity, and regulatory uncertainties.
As for red flags, the market initially categorized items such as "residential income rights, non-masked data, virtual currency derivatives, and legally prohibited items" as high-risk or prohibited. However, recent exploratory transaction structures involving residential income rights have emerged, suggesting that we should maintain a dynamic and tiered approach to red flags. Rather than a blanket ban, these items require structural reforms within strict compliance boundaries, such as divesting land ownership, establishing rent monitoring accounts, strengthening information disclosure and investor suitability, and maintaining ongoing communication with regulators.
Technology and Sandbox: Thresholds on the Chain
On a technical level, Hong Kong and mainland China adopt a "dual-chain parallel" architecture. Domestic assets are typically anchored on consortium blockchains such as Ant Chain or BSN, storing data hashes and real-time IoT data, and must pass ISO 27001 information security certification. Overseas, security token standards such as ERC-3643 or ERC-1400 are used to meet SFC compliance requirements.
To ensure on-chain data is synchronized with real-world assets, Chainlink oracles are often integrated to synchronize real-time external data such as electricity prices and commodity prices, preventing a disconnect between token value and cash flow. All smart contracts must undergo third-party audits and are subject to random inspections by the SFC.
Even so, Hong Kong's Ensemble Sandbox remains a highly challenging entry point. Data from Q1 2024 shows a mere 17% approval rate. Of these, 73% of rejected projects were due to compliance issues in mainland China—either incomplete ownership confirmation documents or unregistered data exports. The sandbox's stringent requirements are not only necessary for risk control but also a direct test of a company's compliance capabilities.
Who will take over this digital bond?
On the other side of RWA lies the choice of capital. Who is willing to pay the bill determines whether this game can go far.
In the international market, sovereign wealth funds are the most committed players. Singapore's GIC and the Middle East's ADIA both favor allocating to green energy and infrastructure-related RWAs to meet the dual objectives of ESG and long-term returns. BlackRock's tokenized money market fund has attracted billions of dollars in inflows, while JPMorgan Chase's Onyx network is attempting to build a cross-border clearing infrastructure.
In Hong Kong, family offices and private banks are quietly entering the market. For them, photovoltaic power plants, toll roads, and cross-border accounts receivable offer predictable cash flows and the backing of policy support. Temasek's participation in Singapore's green bond tokenization pilot program perfectly illustrates this logic.
This means that RWA is not only a new financing tool for issuers, but is also gradually becoming a new allocation option for investors.
Moving forward in regulatory coordination
The promotion of cross-border RWA is a parallel process of market innovation and regulatory coordination.
Data outflow is the first hurdle. Data involving personal information or critical data such as electricity and logistics must undergo a cross-border security assessment by the Cyberspace Administration of China, and the approval cycle can take more than two months. Capital repatriation requires reliance on official channels such as QFLP and QDLP, and requires case-by-case filing. Any single dividend exceeding US$5 million must be filed with the State Administration of Foreign Exchange. Regarding taxation, when an offshore SPV distributes dividends domestically, it can benefit from the China-Hong Kong tax agreement, which reduces the dividend withholding tax from 20% to 5%, but a certificate of residency issued by the Hong Kong Inland Revenue Department must be provided.
These multiple requirements mean that companies must not only navigate the Hong Kong SFC's scrutiny but also simultaneously file with the China Securities Regulatory Commission, the Cyberspace Administration of China, the State Administration of Foreign Exchange, and the National Development and Reform Commission. Any slight oversight can delay the entire process. Therefore, RWAs present not only a risk for companies but also a testing ground for regulators. In the future, this cross-border coordination may even force regulators to introduce new "data sandboxes" and green finance channels.
From ABS to RWA: Historical Echoes and Future Trends
Risks are always present. RWA tokens may be discounted due to insufficient liquidity, cross-chain bridges and smart contracts are subject to technical risks of being attacked, and the boundaries and speed of regulatory policies are also changing dynamically.
However, if we look at a longer timeframe, RWA can easily remind people of asset securitization (ABS) twenty years ago and REITs more recently: high costs and small-scale pilots in the early stages, mature standardized tools and information disclosure systems in the mid-term, and normalization, scale, and transparency in the long term.
No one can give a guaranteed answer as to whether RWA will repeat this trajectory, but what is certain is that the degree of coordination between compliance, technology and capital will determine whether it can overcome the "early expensive period" and reach the "institutionalized universal period."
The long-termist's game
RWA isn't the answer for all businesses. It's more suitable for those with high-quality assets, strong compliance awareness, and strategic internationalization ambitions. In the short term, companies must be prepared to endure high upfront costs and a two-year process. In the long term, however, it could become the new normal for cross-border financing, even reshaping the interaction between mainland Chinese capital and international markets.
This is a game of capital, compliance, and technology, and a two-way interaction between regulators and the market. For true long-termists, RWA isn't a shortcut to quick financing, but a ticket to global capital markets.
It is an expensive ship amidst fog and high walls, but for those who dare to sail far, it may point to the next ocean of finance.
Data source description:
To ensure data accuracy and rigorous perspective, the cost calculations, process cycles, regulatory standards, and other information involved in this article are primarily based on the following authoritative sources:
1. Dacheng Law Firm, (Dacheng Research | Wang Jie et al.: Compliance Guidelines for Mainland Listed Companies Issuing Tokenized Securities (RWA) in Hong Kong)
2. Liu Lei's Lawyer Team, (A Letter to Mainland China-based RWA Companies Hoping to Invest in Hong Kong), published on the "Lvdong Biquan" WeChat Official Account
Author: Liang Yu Zhao Qirui
Editor: Zhao Yidan