China’s securities watchdog has advised some local brokerages to pause their real-world asset (RWA) tokenisation business in Hong Kong, said two sources, signalling Beijing’s concerns of a euphoric drive towards a booming digital assets market offshore, reports Reuters. The RWA tokenisation process usually converts traditional assets such as stocks, bonds, funds and even real estate, into digital tokens traded on a blockchain. A raft of Chinese firms, including brokerages, have launched RWAs in Hong Kong over the past few months.
At least two leading brokerages have received informal guidance from the China Securities Regulatory Commission (CSRC) in recent weeks to refrain from conducting RWA business offshore, said the sources with knowledge of the matter.
One of the sources said the latest regulatory guidance is aimed at strengthening risk management of a new business and making sure the claims made by companies are backed by strong, legitimate businesses.