Why Hong Kong Is Driving RWA Tokenization Despite Steep Costs
Hong Kong is shifting quick to construct its digital finance market via real-world asset (RWA) tokenization, exchange-traded funds (ETFs), and new stablecoin guidelines. But steep prices and compliance calls for proceed to carry again smaller issuers.
On August 26, buying and selling volumes within the metropolis’s six digital asset ETFs reached HK$56.4 million ($7.2 million). The figures present regular investor curiosity regardless of broader volatility.
RWA Tokenization Faces Steep Entry Prices
RWA projects promise to open global liquidity and increase entry for buyers.
Nevertheless, prices stay prohibitive. Issuing a single tokenized product can exceed RMB 6 million ($820,000), in line with PANews.
Brokerage charges take the biggest share, whereas blockchain integration and authorized compliance add additional bills. Extra costs for fundraising, cross-border approvals, and promotion improve the full burden.
Past one-time issuance, firms should additionally safe licenses. A key Hong Kong monetary license prices greater than RMB 1.5 million, whereas a virtual asset service provider (VASP) license can attain into the tens of hundreds of thousands.
Supporters argue tokenization improves effectivity in comparison with conventional securitization. But reliance on oracles, gaps in skilled experience, and the necessity for expensive intermediaries make adoption troublesome.
Liquid belongings similar to cash market funds and US Treasurys are seen as essentially the most sensible candidates for tokenization. In contrast, illiquid infrastructure initiatives stay more durable to scale.
Hong Kong ETFs Present Investor Urge for food
ETF trading patterns reveal a transparent desire for Ethereum-based merchandise. China Asset Administration’s Ethereum ETF led turnover at almost HK$26 million on August 26.
Its Bitcoin product and people of rival issuers Harvest and Bosera drew smaller volumes.
Total, Ethereum-linked ETFs accounted for nearly two-thirds of exercise. Analysts say this displays international traits, the place Ethereum helps decentralized functions and yield alternatives past worth hypothesis.
Ruihe enters Bitcoin mining
In company strikes, Hong Kong-listed Ruihe Knowledge Know-how Holdings introduced plans to increase into Bitcoin via a cloud mining enterprise. The agency signed an outsourcing take care of mining {hardware} maker Bitmain to run operations.
“Bitcoin mining as an unbiased enterprise section offers the group with alternatives in digital belongings and rising applied sciences,” the Ruihe board mentioned in its submitting.
The corporate mentioned outsourcing permits it to keep away from heavy capital spending whereas holding flexibility. Rewards can be distributed to Ruihe underneath the settlement.
Stablecoin Guidelines Create New Framework
Coverage adjustments add one other layer to Hong Kong’s digital finance drive. On August 1, town enforced its Stablecoin Ordinance, setting out licensing necessities for issuers.
Native commentary has urged the federal government to align the technique with China’s fifteenth 5-12 months Plan and place Hong Kong as a hub for stablecoin issuance. A Monetary Improvement White Paper has been recommended as the subsequent step.
Trade leaders see alternatives. JD.com CEO Richard Liu lately mentioned:
“By means of stablecoin licenses, we will obtain forex trade between international enterprises, cut back international cross-border fee prices by 90%, and enhance effectivity to inside 10 seconds.”
Collectively, tokenization, ETFs, and stablecoin regulation spotlight Hong Kong’s ambition to secure a leading role within the international digital asset market.
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