Introduction

Real-World Assets (RWAs) — from prime office towers and government bonds to art and commodities — have long underpinned Hong Kong’s capital markets. RWA tokenization converts these assets into programmable digital tokens on a blockchain, enabling fractional ownership, broader access, and near-instant settlement.

By late 2025, tokenized RWAs worldwide surpassed US$20 billion, signaling that the tokenization era has begun in earnest. As a global financial hub, Hong Kong is rapidly embracing this trend to pair the resilience of traditional finance (TradFi) with the efficiency of blockchain rails.

What is RWA Tokenization?

RWA tokenization means issuing blockchain-based tokens that represent ownership of real-world assets. These tokens can confer legal rights or economic interest in assets like property, bonds, or fine art.

• Fractional ownership: Tokenization divides high-value assets into small, tradable units. Instead of needing tens of millions to buy a Grade-A office building in Central, Hong Kong, an investor could purchase an affordable tokenized share.

• Transparency and efficiency: Ownership is tracked on an immutable blockchain ledger, while smart contracts enforce transfers automatically, removing intermediaries and reducing errors.

• TradFi + DeFi bridge: Tokenized assets combine the stability of real-world value with the programmability, speed, and 24/7 availability of crypto networks.

This innovation is transforming how investors access and manage traditionally illiquid assets — making them more liquid, borderless, and accessible than ever before.

Benefits of RWA Tokenization

1. Increased Liquidity and Accessibility

Tokenization makes illiquid assets tradable. By splitting a luxury apartment block or rare artwork into digital tokens, investors can buy and sell fractional stakes on secondary markets. In Hong Kong, this could mean a young investor owning a slice of a Kowloon office tower, or a family office diversifying into tokenized commodities.

2. Transparency and Security

Every token transaction is recorded on a distributed ledger visible to all network participants. This eliminates double-selling risk and strengthens trust. Smart contracts can also enforce investor eligibility (whitelisting), aligning well with Hong Kong’s strong market integrity rules.

3. Operational Efficiency and Cost Reduction

Tokenized trades settle on-chain without the many intermediaries involved in traditional finance. This cuts settlement times from days to minutes and reduces costs from brokerage, clearing, and back-office errors. Smart contracts can even automate interest or rent payouts.

4. 24/7 Global Trading Enablement

Unlike traditional markets, tokenized assets can be traded anytime, anywhere. A Hong Kong investor could exchange a tokenized slice of a New York City skyscraper with a buyer in Dubai — even outside market hours. This round-the-clock liquidity is especially powerful for a cosmopolitan hub like Hong Kong.

The Rise of RWA Tokenization in Hong Kong

Hong Kong is rapidly becoming a pioneer in RWA tokenization. Key milestones include:

• The Hong Kong Monetary Authority (HKMA) issued the world’s first tokenized green government bond in 2023, worth HK$800 million.

• In 2024, the HKMA coordinated a multi-currency tokenized bond issuance worth about HK$6 billion.

• Asset managers are piloting tokenized funds, such as HSBC’s launch of Asia’s first tokenized money market fund in 2025.

• Early property fractionalization pilots are emerging, letting investors buy small stakes in high-end real estate.

Global banks like Standard Chartered and HSBC are also piloting tokenized securities platforms in Hong Kong, drawn by its East-meets-West position and supportive policies.

Regulatory Environment Supporting RWA Tokenization

Regulatory clarity is a key reason Hong Kong is becoming a leader.

• The Securities and Futures Commission (SFC) issued guidance on tokenized securities in 2023, confirming they are regulated as traditional securities under existing laws.

• The HKMA operates a Fintech Supervisory Sandbox, enabling banks and fintechs to pilot tokenization projects safely.

• In 2024, HKMA launched a Tokenized Bond Grant Scheme, subsidizing issuance costs up to HK$2.5 million.

This “same business, same risk, same rules” approach reduces legal ambiguity and boosts institutional confidence. Firms know they can tokenize assets without entering regulatory grey zones — a major draw for global capital.

Why Custody Providers Are Critical to Institutional RWA Strategies

Institutional adoption hinges on secure custody. Tokenized RWAs must be stored with qualified custodial wallet providers that offer enterprise-grade digital asset wallet infrastructure:

• MPC/HSM-based key protection, multi-signature approvals, and segregated wallets

• Insurance coverage, SOC2 audits, and regulatory licensing

• Role-based access, KYT/AML integration, and real-time audit logs

Without professional custody, institutions would face operational and compliance risks they are not equipped to handle. Regulators like the SFC and HKMA also expect tokenized securities to be held by licensed custodians — just as traditional securities are.

Explore how Cobo’s Wallet-as-a-Service enables institutions to securely issue, store, and manage tokenized RWAs with compliance-ready infrastructure, multi-approver policies, and segregated blockchain accounts.

The Future of RWA Tokenization in Hong Kong

Hong Kong’s tokenization market is on the cusp of exponential growth:

• More asset classes are expected to go on-chain: from government and corporate bonds to private credit, real estate, and alternative assets.

• More government-backed tokenization is likely, building on the green bond project.

• Banks may soon offer tokenization-as-a-service to corporate issuers; wealth managers could launch tokenized portfolios.

• Hong Kong could become the gateway for tokenized Chinese assets to reach global investors, and vice versa.

The city already launched one of the world’s first regulated RWA exchange platforms in 2025. This infrastructure will catalyze institutional flows and secondary liquidity, accelerating adoption.

Conclusion

Real-world asset tokenization is reshaping how investors access tangible and financial assets. Hong Kong is rapidly becoming a trailblazer, leveraging its global financial status, regulatory clarity, and tech-forward ecosystem.

Businesses, investors, and government entities are witnessing the liquidity, transparency, and operational gains tokenization delivers. Early adopters will shape the standards and reap the rewards.

Book a demo with Cobo’s Wallet-as-a-Service to explore how our institutional-grade custody can help secure and scale your RWA tokenization initiatives in Hong Kong and beyond.