China Urges Brokers to Cease Real-World Asset Tokenization in Hong Kong: Report

According to a recent report, Chinese authorities are intensifying pressure on brokerage firms operating in Hong Kong to halt the tokenization of real-world assets. Real-world asset tokenization involves converting ownership rights of physical assets, such as real estate or commodities, into digital tokens tradable on a blockchain. The report suggests that this move aims to mitigate potential financial risks associated with this emerging technology, especially amid growing interest in cryptocurrencies and other digital assets. This pressure arrives as Hong Kong endeavors to solidify its position as a leading digital asset hub, yet Beijing appears cautious about the potential risks involved. The report indicates that Beijing fears real-world asset tokenization could facilitate illicit capital flows and jeopardize financial stability. Companies disregarding these instructions may face severe regulatory penalties. Analysts anticipate that this decision will affect Hong Kong’s digital asset market and potentially slow down the sector’s growth.