Hong Kong is moving fast to build its digital finance market through real-world asset (RWA) tokenization, exchange-traded funds (ETFs), and new stablecoin rules. Yet steep costs and compliance demands continue to hold back smaller issuers.
On August 26, trading volumes in the city’s six virtual asset ETFs reached HK$56.4 million ($7.2 million). The figures show steady investor interest despite broader volatility.
RWA Tokenization Faces Steep Entry Costs
RWA projects promise to open global liquidity and expand access for investors.
However, costs remain prohibitive. Issuing a single tokenized product can exceed RMB 6 million ($820,000), according to PANews.
Brokerage fees take the largest share, while blockchain integration and legal compliance add further expenses. Additional charges for fundraising, cross-border approvals, and promotion increase the total burden.
Beyond one-time issuance, companies must also secure licenses. A key Hong Kong financial license costs more than RMB 1.5 million, while a virtual asset service provider (VASP) license can reach into the tens of millions.
Supporters argue tokenization improves efficiency compared to traditional securitization. Yet reliance on oracles, gaps in professional expertise, and the need for costly intermediaries make adoption difficult.
Liquid assets such as money market funds and US Treasurys are seen as the most practical candidates for tokenization. By contrast, illiquid infrastructure projects remain harder to scale.
Hong Kong ETFs Show Investor Appetite
ETF trading patterns reveal
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Author: Shota Oba
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