China’s CSRC Halts $29B Tokenization in Hong Kong

- Beijing instructs brokerages to pause real-world asset (RWA) tokenization, citing risk concerns. - Move highlights policy divergence as Hong Kong advances its digital asset hub status. On September 22, 2025, CoinDesk reported that China's securities regulator, the China Securities Regulatory Commission (CSRC), has informally directed local brokerages to halt their real-world asset (RWA) tokenization initiatives in Hong Kong. This measure reportedly reflects Beijing’s ongoing concerns about risk management and the credibility of businesses supporting these tokenized assets. RWA tokenization, which converts assets like stocks, bonds, and real estate into digital tokens on a blockchain, represents a global market currently valued at approximately $29 billion. The CSRC’s intervention signals a precautionary stance to ensure robust safeguards as this nascent industry evolves. This move underscores a stark policy divide between mainland China and Hong Kong. While Beijing maintains stringent controls on cryptocurrency activities, including a 2021 ban on crypto trading and mining, Hong Kong actively promotes itself as a global digital asset hub. The city has introduced licensing frameworks for virtual asset service providers, stablecoin regulations, and tokenization programs with backing from major financial institutions like the Hong Kong Monetary Authority (HKMA) and the Financial Services and the Treasury Bureau (FSTB). Several notable Chinese companies have already ventured into RWA tokenization through Hong Kong. For example, GF Securities’ Hong Kong unit launched “GF tokens,” and China Merchant Bank International issued a tokenized digital bond. Additionally, property developer Seazen signaled its interest in digitalizing real estate assets. However, the CSRC’s informal suspension highlights Beijing’s growing caution about the legitimacy and risk oversight of these projects. In addition to this latest directive, the CSRC recently advised brokerages to limit publishing research on stablecoins, reinforcing its broader scrutiny of tokenized financial products. The regulator has not specified the duration of the suspension, creating uncertainty for stakeholders involved in RWA tokenization in Hong Kong.