China Halts Broker Tokenization Amid Hong Kong Crypto Push

- Beijing’s CSRC orders mainland firms to pause RWA tokenization activity in Hong Kong. - The move reflects China’s cautious crypto stance versus Hong Kong’s DeFi ambitions. On September 22, 2025, Reuters reported that China’s securities regulator, the China Securities Regulatory Commission (CSRC), informally instructed mainland brokerages to suspend real-world asset (RWA) tokenization activities in Hong Kong. This move underscores a growing regulatory divide, as Beijing’s cautious crypto stance contrasts sharply with Hong Kong’s push to establish itself as a global digital finance hub. The directive reportedly targeted at least two major securities firms and aims to ensure proper risk controls and lawful operations tied to RWA tokenization claims. While Hong Kong has actively encouraged virtual asset trading and management services, mainland China maintains a stricter approach, having banned cryptocurrency transactions and mining in 2021 over financial stability concerns. Globally, the RWA sector is valued at $29 billion, with projections suggesting it could exceed $2 trillion by 2030. As a result, Hong Kong’s more favorable regulatory policies have attracted significant interest from Chinese firms keen to explore this growing market segment. Notable initiatives include the release of “GF tokens” by GF Securities in June, which are yield-linked products reportedly backed by currencies such as the U.S. dollar, Hong Kong dollar, and offshore renminbi. In addition, China Merchant Bank International (CMBI) helped Shenzhen Futian Investment raise 500 million yuan ($70.29 million) through a digital bond linked to real-world assets. Meanwhile, developer Seazen Group announced plans in August to establish a Hong Kong-based institute to promote RWA tokenization. Hong Kong’s pro-crypto stance has also spurred significant market activity. For instance, shares of Guotai Junan International soared over 400% earlier this year after the firm obtained approval to offer crypto trading services. Similarly, Fosun International’s stock jumped by up to 28% in August following reports that its leaders had engaged with Hong Kong officials on stablecoin development. It remains uncertain how long the CSRC’s directive will stay in effect, and the long-term implications for the adoption of RWA tokenization in the region are also unclear.