A panoramic view of Hong Kong’s RWA ecosystem: With three parties in place, who will dominate the trillion-dollar race?

Hong Kong's Real-World Asset (RWA) tokenization market is experiencing significant growth, driven by high-profile deals and a maturing ecosystem. The market is structured around three key participant groups:

Liquidity Providers: Licensed Virtual Asset Trading Platforms (VATPs) like HashKey Exchange and OSL are crucial for secondary market trading and price discovery. They facilitate the circulation of tokenized assets, with services ranging from automated trading to over-the-counter (OTC) deals for institutions. Their regulated nature aligns with the strict compliance requirements of RWAs.
Technical Support Providers: These entities build the underlying infrastructure, including smart contracts and tokenization platforms. Companies like Ant Digits (with its "two chains and one bridge" system) and Fosun Group's Star Road Technology are developing the core architecture that enables asset digitization and programmability, supporting projects from tokenized funds to physical assets like charging piles.
Service Support Providers: Acting as compliance and security guardians, these firms ensure trust through custody, risk control, and operational services. Crypto-native institutions such as Cobo, Cactus Custody, and Hex Trust lead this niche, providing secure asset management and bridging traditional finance with digital assets.

The collaboration between traditional financial institutions and crypto-native companies is accelerating the development of a comprehensive and compliant RWA market in Hong Kong, positioning it as a key player in the global tokenization race.

Hong Kong's RWA business is booming, leading regulators to initiate window guidance and some brokerages to proactively reduce their investment. Meanwhile, related stocks continue to surge in the capital market. On September 22nd, two Hong Kong-listed companies, Huajian Medical and Transcenta, announced a $1.5 billion strategic partnership agreement to tokenize their innovative drug pipeline assets. Transcenta's share price surged nearly 10% when the Hong Kong market opened on September 23rd. Since announcing its entry into the RWA sector, Huajian Medical's market capitalization has surged by HK$14 billion in the two months since it announced its entry into the RWA market.

Along with the rising market capitalization, the enthusiasm of Hong Kong market participants has also increased. PANews previously published an article exploring the key roles of Hong Kong-listed companies in the RWA market. This article will deconstruct the business support sectors of the Hong Kong RWA market, presenting a more intuitive picture of the Hong Kong RWA ecosystem.

The RWA industry consists of two main entities: product issuers and business supporters. Business supporters can be further divided into three key niches: "liquidity providers" that facilitate asset circulation, trading, and price discovery; "technical supporters" responsible for building the underlying infrastructure and technical architecture; and "service supporters" providing compliance, custody, and security assurance.

Liquidity Provider

Liquidity providers play a vital role in the RWA market. They are the core hub that connects on-chain tokens and off-chain traditional assets, and play a role in asset circulation and price discovery.

Licensed Virtual Asset Trading Platforms (VATPs) are compliant venues for RWAs to enter secondary market trading and pricing, and are also the primary channel for RWA circulation. Compared to decentralized exchanges (DEXs), regulated centralized exchanges (CEXs) have inherent advantages in customer due diligence (KYC)/anti-money laundering (AML), asset custody, and regulatory review, which perfectly aligns with RWA's strict compliance requirements.

Licensed platforms can not only provide automated trading services for RWAs but also offer over-the-counter (OTC) trading services to institutions. However, it's worth noting that the "on-chain" transfer of RWAs goes beyond simple data transfer; it also harbors macroeconomic implications. Some analysts have pointed out that when sovereign or regional assets are "on-chain" in the form of RWAs, asset pricing power may shift from domestic to offshore, "transnational" cryptocurrency exchanges, potentially posing challenges to the economic security and financial stability of the jurisdiction. Therefore, while Hong Kong encourages the development of the RWA market, it also employs a strict licensing system to manage potential macroeconomic risks.

As a representative of Hong Kong's VATP, HashKey Exchange's RWA business primarily targets high-net-worth individuals and institutional investors. In partnership with GF Securities (Hong Kong), HashKey Exchange issued the first daily redeemable tokenized security, "GF Token," marking a key step forward for traditional financial institutions in Hong Kong in issuing RWAs. This project is not only a technological innovation but also a benchmark example of the deep integration of "traditional finance + Web3," demonstrating to the market that under a clear regulatory framework, traditional financial institutions can embrace tokenization.

OSL Exchange, another representative of Hong Kong's local CEXs, has played a key role in expanding the retail market for RWAs. OSL has developed the "Tokenworks" one-stop platform, encompassing RWA tokenization, custody, and distribution. OSL partnered with China Asset Management (Hong Kong) to launch a tokenized money market fund within the HKMA's "Ensemble" regulatory sandbox program. This fund is Hong Kong's first tokenized fund for retail investors, expanding the RWA market beyond institutional and professional investors to a broader retail audience.

Currently, six licensed CEXs in Hong Kong have stated that they will focus on developing RWA services. In addition, there are also participants such as Yunfeng Financial and DigiFT as liquidity providers in the primary and secondary markets.

Technical support provider

The value of RWA lies in its core technology, which enables the digitization, programmability, and efficient transfer of assets through blockchain technology. In Hong Kong's RWA market, technical support is the cornerstone of this process. This is primarily comprised of participants who develop the underlying RWA architecture, including smart contracts, on-chain protocols, and tokenization platforms.

Within the technology support ecosystem, the Jack Ma faction is pursuing a dual-track strategy. While Yunfeng Financial focuses on infrastructure investment, Ant Digits prioritizes infrastructure development. Its core technology platform is a "two chains and one bridge" system, comprising an "asset chain," a "transaction chain," and a "trusted cross-chain bridge" connecting the two. This system strives to standardize and digitize the physical assets of mainland Chinese companies while tokenizing traditional financial capital to achieve efficient capital flows. Langxin Technology's cross-border RWA project for charging piles is a successful implementation of this technology system and has been selected as a representative case for the HKMA's "Ensemble" regulatory sandbox. Ant Digits has been active in multiple new energy asset tokenization projects, providing viable financing solutions for new energy projects within China.

Meanwhile, Fosun Group is also accelerating its expansion into the RWA sector. Fosun International has registered several trademarks in Hong Kong, including "Fosun Wealth RWA." Star Road Technology, a subsidiary of the group, is the technological core of its RWA strategy. Star Road Technology has officially launched FinChain and successfully secured funding. The platform focuses on providing digital wealth management services to global investors and has developed Asia's first full-process technical solution for tokenizing Hong Kong stocks. Furthermore, Fosun Wealth Holdings has become a distributor of tokenized structured notes. These initiatives by Fosun Group not only demonstrate its commitment to entering the RWA market but also provide a new reference path for traditional financial institutions in terms of RWA technology and business.

In addition, there are more than a dozen other technical support providers active in Hong Kong's RWA market.

Service support provider

The driving force behind RWA growth lies in trust, which must be built on reliable compliance and security. In Hong Kong's RWA market, service providers are the compliance guardians who ensure the robust operation of this trust system. They focus on managing the entire asset lifecycle, including compliance review, secure custody, daily operations, efficient clearing/settlement, and risk control.

Compared to the accelerated penetration of traditional institutions into the technical support sector, crypto-native institutions remain at the forefront of the service support ecosystem. In particular, Cobo, Cactus Custody, and Hex Trust have all established differentiated competitive advantages. Cobo achieves a balance between security and operational efficiency through its advanced multi-party computation (MPC) technology and capital-efficient liquidity service (Cobo SuperLoop). Matrixport's Cactus Custody, renowned for its system integration capabilities, has rapidly accumulated a substantial asset management scale and client base. Hex Trust, positioned as a bridge between traditional finance and the world of digital assets, prioritizes regulatory licenses, attracting significant institutional capital that prioritizes compliance.

The service support ecosystem is mainly composed of custodians, and there are also several institutions that provide compliance, operations and other services.

With both traditional financial giants and crypto-native institutions flocking to the market, Hong Kong is accelerating the development of a comprehensive, compliant, and competitive RWA market with a clear regulatory framework, mature market foundation, and open ecosystem. From liquidity providers closing the trading loop, to technical support solidifying the underlying architecture, and service providers building a solid foundation of trust—three key ecosystem niches are becoming increasingly clear, and various players are vying to establish their presence.