Hong Kong RWA Storm (Part 1): From Frenzy to Reconstruction, an Analysis of the Nine Major Factions

Author: Brian, Guantian Laboratory W Labs

In early August 2025, Hong Kong’s RWA and stablecoin sectors reached their hottest peak in nearly five years. At that moment, the entire city was filled with a passion unseen since 2017-2018: senior executives from traditional financial institutions, AI entrepreneurs, and even industry capital leaders flocked to Hong Kong to explore Web3 integration pathways. Dinner parties and hotel lobbies were buzzing with discussions on tokenized government bonds, cash management tools, and stablecoin legislation. A Wall Street banker who had just transitioned from New York to Hong Kong bluntly stated: in terms of crypto topic density and participation breadth, Hong Kong has replaced New York as the world’s hottest blockchain city.

However, just over two months later, market enthusiasm sharply declined. Mainland regulatory signals tightened significantly regarding mainland financial institutions and assets tokenized in Hong Kong RWA. Several previously imminent mainland physical asset tokenization projects were delayed or shelved, with some China-backed RWA platforms experiencing trading volume drops of 70%-90%. Once regarded as “the world’s number one” in RWA heat, Hong Kong’s enthusiasm seemed to slip from midsummer into deep autumn, triggering market doubts about Hong Kong’s international Web3 hub status. On November 28, 2025, the People’s Bank of China led a meeting with 13 national-level departments—including the Central Financial Work Office, National Development and Reform Commission, and Ministry of Justice—called the “Coordination Mechanism for Combating Virtual Currency Trading and Speculation.” For the first time, stablecoins were included in virtual currency regulation, clarifying that virtual currency-related activities are illegal financial activities, emphasizing their non-legal tender status, and prohibiting their use as currency for circulation.

The tightening of mainland regulation, while temporarily impacting Chinese clients and restricting outbound capital flows, does not fundamentally alter Hong Kong’s RWA policy due to its unique “one country, two systems” framework and independent regulatory regime. This is not a fundamental policy shift but rather another cycle of “high-level cooling and structural reorientation” that Hong Kong has repeatedly experienced over the past two years in this sector. Reviewing 2023-2025, a clear three-phase evolution path emerges:

• 2023 - 2024 H1: Regulatory Opening and Sandbox Trial Period

HKMA launched Project Ensemble, and the SFC continuously approved multiple tokenized money market ETFs and bond funds. Local licensed platforms like HashKey and OSL obtained virtual asset (VA) licenses to expand, officially establishing Hong Kong as a “regulated RWA experimental zone.”

• 2024 H2 - July 2025: Explosive Growth Period Driven by Domestic and International Resonance

The U.S. “GENIUS Stablecoin Act” passed, the Federal Reserve began a rate cut cycle, and the Trump administration clarified its pro-crypto stance. Coupled with the release of Hong Kong’s local stablecoin legislation consultation document, this triggered a surge of global capital and projects into Hong Kong. For example, Bosera-HashKey’s tokenized money market ETF, XSGD, and several tokenized private credit funds saw AUM skyrocket from tens of millions to billions of dollars within months, making Hong Kong temporarily the fastest-growing RWA market globally.

• August 2025 to Present: Limited Participation and Risk Isolation Period

Mainland regulators adopted a more cautious attitude toward cross-border asset tokenization, explicitly restricting mainland institutions and individuals from deep involvement in Hong Kong’s RWA ecosystem, effectively cutting off the primary sources of incremental capital and assets. Local and international capital in Hong Kong continues to be allowed full participation, but growth momentum shifted from “on-chain mainland assets” to “local + global compliant capital allocation to US-led on-chain assets.”

This cyclical cooling logic reflects the decision-makers’ dynamic balance between “participating in the new global digital economy order” and “preventing systemic financial risks.” Hong Kong’s role has been re-anchored as: limited to local resources, fully connecting with the US-led blockchain economy network, while building firewalls to block risk transmission to the mainland.

This means that Hong Kong’s RWA market is not declining but entering a clearer, more sustainable third phase: shifting from “wild growth” to “compliance-led, DeFi integration, global capital connecting to US-based on-chain assets.” Pure on-chain, highly transparent, low-risk cash management RWA (money market funds, government bonds tokens) will continue rapid growth, while physical RWA paths heavily reliant on mainland assets and capital will be significantly compressed.

For practitioners, the short-term pain caused by policy fluctuations is unavoidable, but ample compliance space remains. Especially with the brief regulatory leniency window for DeFi in the US, combined with licensed platforms in Hong Kong legally providing on-chain services, this creates a rare overlay advantage. It offers a valuable strategic runway for deepening on-chain liquidity, structured products, and cross-chain asset allocation within a regulated framework.

The story of Hong Kong RWA is far from over; it has moved from the noisy, passionate frenzy into a more calm, professional deepening phase. This article will further elaborate on the Hong Kong RWA market and related flagship projects.

Hong Kong RWA Market Landscape

As a frontier hub for integrating global blockchain and traditional finance, Hong Kong’s RWA market in 2025 has established itself as Asia’s most mature regulatory ecosystem. Driven by the Hong Kong Monetary Authority (HKMA) and the Securities and Futures Commission (SFC), through sandbox projects like Project Ensemble and the “Digital Asset Policy 2.0” framework, the focus is on tokenized money market instruments, government bonds, green bonds, and emerging physical assets (such as charging station income and international shipping rents). The overall pattern features “institution-led, compliance-first, gradual DeFi integration”: transitioning from experimental issuance in 2024 to scaled infrastructure development in 2025, emphasizing cross-chain settlement, stablecoin integration, and global liquidity connectivity. The Hong Kong RWA ecosystem has shifted from a “financing window” to an “innovation platform,” deeply connected with US-led on-chain networks while maintaining risk isolation.

Participants: Institutional Capital Dominance, Tech Firms and Startups Coexist

Hong Kong’s RWA market participants are highly stratified, led mainly by institutional capital, supplemented by local tech companies and emerging Web3 startups, forming a closed-loop ecosystem. The main types (based on active entities in 2025) are summarized in the table below:

It is evident that the market remains predominantly dominated by large institutions, accounting for about 70%, leading high-threshold product issuance; companies and startups fill technological and application gaps, benefiting from the SFC’s VA license expansion.

Overall Scale and Growth Trend

In 2025, Hong Kong’s RWA market size is embedded within the global on-chain TVL framework of $26.59B - $35.8B, with AUM soaring from tens of millions of dollars at the start of the year to hundreds of millions or billions. The growth driver is the policy synergy—2025 policy report calls for RWA infrastructure investment; stablecoin legislation will take effect in 2026, expected to reduce cross-border payment costs by 90%, with settlement times down to 10 seconds. The annualized growth rate exceeds 200%, with TVL expanding 58 times over three years. However, high compliance costs (single product issuance exceeding $820,000) limit retail penetration, with over 80% of inflows from institutional investors.

Future Development Potential

Hong Kong RWA has vast potential, with projections indicating that by 2025-2030, the market size could reach trillions of dollars, ranking among the top three globally (behind only the US and Singapore). Its advantages include rapid iteration and international alignment of regulatory sandbox policies: the SFC is about to open global order book sharing to enhance liquidity; the Ensemble project will build a tokenized deposit settlement system, radiating to emerging trade corridors like Brazil and Thailand. The DeFi tolerant window and AI + blockchain integration (e.g., shipping rent tokenization unlocking a $200 billion market) will drive diversified scenarios, with over 50 new startups expected. Challenges include cost barriers and mainland capital isolation, but these reinforce Hong Kong’s role as a “global neutral hub”: attracting Western and European institutions to allocate US bonds/MMFs, while local enterprises focus on Asian physical assets. Overall, Hong Kong RWA is shifting from “hype-driven” to “sustainable growth,” with key factors being policy continuity and infrastructure maturity.

Hong Kong RWA Platforms and Ecosystem

1. HashKey Group —— The “Full-Stack” Foundation of a Compliant Ecosystem

In Hong Kong’s grand narrative of becoming a global Web3 hub, HashKey Group is undoubtedly the most representative “flagship” entity. As Asia’s leading end-to-end digital asset financial services group, HashKey is not only a pioneer in Hong Kong’s compliant trading market but also a builder of key infrastructure for RWA issuance and trading. Its strategic layout spans from underlying blockchain technology to asset management and trading, forming a complete compliant closed loop.

Founded in 2018 and headquartered in Hong Kong, HashKey has deep roots with Wanxiang Blockchain Labs. Since the Hong Kong Securities and Futures Commission (SFC) began issuing licenses for virtual asset trading platforms, HashKey has embraced regulation.

In August 2023, HashKey Exchange became one of the first Hong Kong exchanges to upgrade to licenses for Type 1 (securities trading) and Type 7 (automated trading services), authorized to serve retail investors. This milestone not only solidified its legal monopoly advantage (one of the two major players) in Hong Kong but also provided an effective channel for future secondary market circulation of compliant RWA products (such as STOs, security token offerings).

On December 1, 2025, HashKey Group passed the Hong Kong Stock Exchange’s review and is expected to list on the main board, potentially becoming “Hong Kong’s first licensed virtual asset stock.” Many industry experts have analyzed HashKey’s IPO prospects; I believe its listing is a landmark event that will help Hong Kong compete globally (especially against Singapore and the US) for Web3 valuation and discourse power, establishing Hong Kong as a “compliant digital asset center.”

HashKey’s architecture is not a single exchange model but a comprehensive ecosystem serving the entire RWA lifecycle:

• HashKey Exchange (Trading Layer): Hong Kong’s largest licensed virtual asset exchange, providing fiat (HKD/USD) deposit and withdrawal channels. For RWA, this will be the liquidity hub after asset tokenization.

• HashKey Tokenisation (Issuance Service Layer): The core engine of its RWA business. Focuses on assisting institutions to tokenize physical assets (bonds, real estate, art, etc.), offering one-stop STO solutions from consulting, technical implementation to legal compliance.

• HashKey Capital (Asset Management Layer): A top global blockchain investment firm with over $1 billion AUM. Its role in RWA is mainly supporting capital and product development (e.g., ETFs).

• HashKey Cloud (Infrastructure Layer): Provides node validation and underlying blockchain technology support, ensuring secure and stable asset on-chain.

In Hong Kong’s RWA market, HashKey’s core competitiveness lies in two dimensions: “regulatory moat” and “ecosystem linkage”:

1. Regulatory Moat: The core of RWA is mapping regulated offline assets onto the chain. HashKey holds complete compliant licenses, capable of legally handling “security” tokens, a threshold most unlicensed DeFi platforms cannot cross.

2. “Consolidated” Ecosystem Capability: Able to connect asset side, capital side, and trading side. For example, a real estate project can be tokenized by HashKey Tokenisation, early subscription by HashKey Capital, and listed for trading on HashKey Exchange.

3. Institutional-Level Connectors: HashKey has established fiat settlement collaborations with traditional financial institutions like ZA Bank and Bank of Communications (Hong Kong), solving the critical “deposit/withdrawal” and fiat settlement issues for RWA.

HashKey’s practice in RWA mainly involves “traditional financial assets on-chain” and “compliant issuance.” Typical cases include:

HashKey Group is not just an exchange; it is the operating system of Hong Kong’s RWA market. By holding scarce compliant licenses and building full-stack technical infrastructure, HashKey is transforming “asset tokenization” from concept to executable financial business. For any institution wishing to issue or invest in RWA in Hong Kong, HashKey is an indispensable partner.

2. OSL Exchange —— The “Digital Arms Dealer” and Infrastructure Expert for Traditional Finance

In the Hong Kong RWA game, if HashKey is the “flagship” leading the charge and building a complete ecosystem, then OSL Group (formerly BC Technology Group, 863.HK) is the behind-the-scenes “arms dealer” providing technology to traditional financial institutions.

As Hong Kong’s only listed company focused on digital assets, OSL has the transparency and audit standards of a listed firm. This makes OSL the preferred “safe channel” for risk-averse traditional banks and sovereign funds entering the RWA market.

Unlike HashKey’s active retail expansion and public chain ecosystem development, OSL’s strategic focus is highly on institutional business. Its architecture is not aimed at “building an exchange” but at “helping banks build their products”:

• Unique “Listed Company” Moat:

The core of RWA is compliance with traditional finance (TradFi). For large banks, collaborating with a listed company (public company) incurs much lower compliance costs than with private firms. OSL’s financial statements are audited by the Big Four, and this “institutional trust” is its biggest advantage in B2B markets.

• Technology Provider (SaaS Model):

OSL does not insist on having all assets traded on its platform but is willing to export technology (OSL Tokenworks) to help banks build their own tokenization platforms. This is a “selling shovels” strategy—whoever issues RWA and uses OSL’s underlying technology or liquidity pools, OSL profits.

• Monopoly-Like Custody Position:

In Hong Kong’s first Bitcoin/Ethereum spot ETFs, Harvest and ChinaAMC chose OSL as the virtual asset custodian. This means over half of the underlying assets in Hong Kong ETFs are controlled by OSL. For RWA, “who controls custody, controls the asset’s key.”

In the RWA industry chain, OSL positions itself as a precise pipeline connecting traditional assets and the Web3 world:

• RWA Structuring & Distribution:

Using its licensed broker status, OSL excels at structuring complex financial products. It is not just about “on-chain assets” but focuses on tokenizing investment-grade products like bank notes and structured products.

• Cross-border Compliance Liquidity Network:

OSL has deep cooperation with Standard Chartered’s Zodia Markets and Japanese financial giants. In RWA liquidity, OSL prefers “institution-to-institution” dark pools and OTC routes rather than retail order books.

OSL’s cases are often not limited to Hong Kong but have strong international demonstration effects, with partners mostly top TradFi giants. Due to its B2B nature, financing scales are usually undisclosed:

To better understand the differences, a comparison table of HashKey vs. OSL is summarized below:

If HashKey is building a bustling “Web3 commercial city” in Hong Kong, then OSL is like the chief engineer responsible for the city’s underground pipelines, vault security, and power supply. In the RWA market, OSL does not pursue the loudest “issuance” but aims to be the safest “warehouse” and most compliant “channel” for all RWA assets.

3. Ant Digital —— The “Trusted Bridge” for Physical Asset On-Chain

In Hong Kong’s RWA landscape, Ant Digital (and its Web3 brand ZAN) represents a disruptive force from internet giants. Unlike financial institutions focusing on “licenses” and “trading,” Ant Digital’s core strength lies in solving the fundamental pain point of RWA: how to prove that on-chain tokens truly correspond to offline physical assets.

Ant Digital’s strategic path is very clear: leveraging the high-performance technology of AntChain (AntChain), cultivated over years in China, combined with Trusted IoT (Trusted IoT), to provide global RWA projects with “asset digitization” technical standards and verification services through Hong Kong’s international window.

Ant Digital in Hong Kong does not act as a “trading venue” but as a Web3 technology service provider. Its business logic can be summarized as “two ends and one cloud”:

• **Asset Side (Asset Side): **Embedding IoT modules (Trusted Modules) into physical devices like solar panels, charging stations, construction machinery, to collect data in real-time and directly on-chain. This shifts RWA from “based on issuer credit” (trusting the issuer) to “based on asset credit” (trusting real-time cash flows generated by equipment).

• **Capital Side (Capital Side): **Through the ZAN brand, providing KYC/KYT, smart contract auditing, and node services for institutional investors, ensuring compliance of capital inflows and outflows.

• Privacy Protection: It is one of the few vendors in Hong Kong’s Project Ensemble sandbox capable of providing zero-knowledge proof (ZKP) technology, solving the deadlock where banks need to verify transactions without revealing business secrets during asset settlement on public chains.

When HashKey and OSL handle “securitized assets” (like bonds, funds), Ant Digital excels at handling “non-standard physical assets”:

• Source Trustworthiness: Traditional RWA relies on auditors inspecting warehouses, but Ant Digital embeds chips to enable real-time on-chain data of new energy vehicles, batteries, and even biological assets (like cattle), such as power generation and mileage.

• Mass Concurrent Processing: Inherited from Alipay’s “Double Eleven” tech DNA, AntChain can support billions of asset data entries being concurrently on-chain, surpassing most public chains.

• Internationalization of ZAN: In 2024-2025, ZAN rapidly rises in Hong Kong, becoming a key middleware connecting Web2 developers and the Web3 world, especially in compliance technology.

Ant Digital’s cases mainly reflect “entity economy on-chain” and “interbank settlement architecture.”

If HashKey is the “Taobao,” building a platform for buying and selling RWA products; OSL is the “treasury,” providing the safest vaults to safeguard RWA assets for institutions; then Ant Digital is the “smart factory + quality inspector,” deeply involved in production (charging stations, batteries), tagging each asset with a “qualified label” (IoT verification), and providing technology for smooth circulation. In Hong Kong’s RWA market, Ant Digital focuses on data, aiming to be the “customs” and “translator” connecting physical assets to the Web3 world.

(# 4. Conflux Network —— The “Compliance Public Chain” Connecting Mainland China and Hong Kong

In Hong Kong’s RWA market, most platforms (like HashKey, OSL) mainly address “how assets are traded locally in Hong Kong,” while Conflux solves “how mainland assets can be compliant and exported” and “which currency to settle with.”

As “China’s only compliant public chain,” Conflux leverages its Shanghai Tree-Graph Blockchain Research Institute background, deep ties with China Telecom, and the Belt and Road initiative. In 2025, Conflux is no longer just a technical public chain but has evolved into the core issuance layer for offshore RMB/HK dollar stablecoins.

Conflux’s RWA strategy is quite different from others, avoiding the crowded asset management track and focusing on the most fundamental infrastructure:

• RWA’s Bloodline (Stablecoins): Conflux incubated and supports AnchorX (main investor: Hillhouse Capital), aiming to issue compliant HKD stablecoins )AxHKD###. In RWA trading, asset on-chain is the first step, but “what to buy with” is the second. Conflux tries to make AxHKD the settlement currency for Hong Kong RWA markets, akin to USDT/USDC.

• Physical Entry (BSIM Card): Collaborating with China Telecom to launch BSIM cards, embedding blockchain private keys directly into mobile SIM cards. For RWA, this means future asset rights confirmation (e.g., tokenized real estate bought on your phone) can be linked with telecom’s real-name identity, solving the toughest “identity authentication (DID)” problem.

• Mainland-Hong Kong Connector: Using its Shanghai-based R&D center (Tree-Graph), Conflux can support mainland enterprises’ outbound needs, enabling compliant mapping of mainland physical assets (like solar PV, supply chains) onto Hong Kong’s Conflux public chain for financing.

In the RWA sector, Conflux’s moat lies in its geopolitical advantages:

• “Desensitized” Interoperability: Conflux’s unique architecture complies with mainland regulation (no tokenized blockchain tech application) while enabling cross-chain bridges in Hong Kong for tokenized trading. This makes it the most “politically correct” choice for mainland state-owned enterprises and central enterprises exploring RWA outbound.

• Payment and Settlement Closed Loop: Through the AnchorX project, Conflux is actively participating in Hong Kong Monetary Authority’s “sandbox regulation.” Once HK dollar stablecoins are established, Conflux will evolve from a mere “path” to a financial network with “toll pricing” rights.

• High-Performance Throughput: RWA, especially high-frequency bills or retail assets, requires extremely high TPS (transactions per second). Conflux’s Tree-Graph structure claims to reach 3000-6000 TPS, giving it an advantage over Ethereum mainnet in handling traditional financial high-concurrency transactions.

Conflux’s case emphasizes “monetary infrastructure” and “state-level cooperation.”

Conflux Network is the only “public chain-level” player in Hong Kong’s RWA market. It does not directly profit from transaction fees but aims to become a “digital Silk Road” connecting Chinese manufacturing with global capital by setting underlying standards (stablecoin standards, SIM card standards).

(# 5. Star Road Technology —— The “First Class Cabin” for Old Money to Web3

Amid the noisy voices in Hong Kong’s RWA market, Star Road Technology (Star Road, also known overseas as Finloop) is not the loudest “disruptor,” but it is likely the most solid “successor.”

Rather than viewing Star Road as an independent Web3 startup, it is better to see it as a large integrated private enterprise—Fosun International )Fosun International### dispatching an “official landing craft” into the digital asset world. Incubated independently by Fosun Wealth (Fosun Wealth), Star Road’s very existence carries distinct group will: it does not aim to build a new financial order from scratch but to smoothly and compliantly “ferry” traditional financial large stock assets and high-net-worth clients into the blockchain world.

Strategically, Star Road proposes a unique “Web5” concept. Unlike pure Web3 decentralization ideals, Star Road’s Web5 is more like a pragmatic compromise—it seeks to combine the mature user experience and traffic entry points of Web2 (Fosun Wealth’s client base) with the value interconnection technology of Web3.

Under this narrative, Star Road has built its core infrastructure—the FinRWA platform (FinRWA Platform, FRP). This is an enterprise-level RWA issuance engine, designed not for anonymous on-chain geeks but for serving Fosun’s institutional and high-net-worth clients. It acts as a sophisticated converter, connecting Fosun’s long-standing real estate, consumer, cultural tourism, and other physical assets on one end, with compliant digital asset distribution networks on the other. For Star Road, RWA is not an end but a means to activate the liquidity of the group’s existing assets.

Unlike others eager to explore high-risk, high-reward DeFi, Star Road chooses a most prudent entry path: Money Market Fund Tokenization.

By forming deep alliances with Huaxia Fund (Hong Kong) and Fosun Wealth, its flagship product focuses on tokenizing Hong Kong dollar, US dollar, and RMB money market funds. This is a highly strategic choice—money market funds are familiar to traditional investors and require minimal entry barriers. Star Road uses its technology to tokenize these funds, effectively providing a safe entry ticket for “old money” with cautious attitudes toward crypto.

More importantly, Star Road opens a RWA channel for RMB. In Hong Kong’s role as an offshore RMB center, this capability allows Star Road to precisely capture mainland capital holding large offshore RMB and seeking compliant outbound value-added.

Star Road’s business map resembles a “boutique digital investment bank.” Its cases demonstrate a complete closed loop from “underlying technology” to “asset issuance” and “ecosystem capital”:

Star Road Technology embodies the understanding and transformation of traditional financial elites toward Web3: not pursuing radical decentralization but emphasizing compliance, security, and user experience. For institutions and high-net-worth individuals wishing to retain traditional financial service experience while allocating digital assets, Star Road is the most seamless and least disruptive entry point.