In the just passed year of 2024, Real Asset Securitization (RWA) gradually moved from concept to implementation, becoming a core trend in the Web3.0 industry.

During this year, with the support of the government, the exploration of RWA has made positive progress both domestically and internationally, becoming an indispensable part of the path of financial technology innovation.

Hong Kong actively embraces RWA

In recent years, the development of blockchain technology has gradually made RWA the focus of the fintech field.

RWA， RWA tokenization refers to financial assets linked to physical assets (including real estate, gold, stocks, etc.), which are digitized through blockchain technology to form tokens that can circulate in the blockchain network. Digitizing physical assets is beneficial for creating a more open and efficient financial market.

The integration of Web3.0 with the real economic world is the trend, and RWA tokenization is an important driving force behind this trend. In 2024, Hong Kong actively seized the high ground of the Web3.0 industry and provided key support in the tokenization market.

Professor Wang Yang, Vice President of the Hong Kong University of Science and Technology, once stated at the 11th "Top 100 Hong Kong Stocks" award ceremony that the rise of blockchain technology, digital currencies, and other technologies in the Web3.0 era provides an opportunity for Hong Kong to reshape its financial landscape. The issuance of Hong Kong dollar stablecoins and their promotion of tokenization of real-world assets (RWA) are key measures to promote financial innovation, enhance market transparency and security. This will not only facilitate the activation of physical assets and lower investment barriers, but also lay the foundation for Hong Kong to build an open, orderly, and vibrant financial market.

Faced with the financial innovation opportunities brought by RWA, the Hong Kong SAR government has chosen to actively layout. In March 2024, the Hong Kong Monetary Authority announced the launch of a new wholesale level central bank digital currency (wCBDC) project Ensemble to support the development of the Hong Kong tokenization market. The new project aims to explore innovative financial market infrastructure and facilitate interbank settlement of tokenized currencies through wCBDC.

On August 28th, the Hong Kong Monetary Authority announced the progress of the first phase of the Ensemble project and detailed four tokenization themed cases, including fixed income and investment funds, liquidity management, green and sustainable finance, and trade and supply chain financing.

Among them, Langxin Technology and Ant Technologies have cooperated to complete the first RWA based transaction in China, with a transaction amount of about 100 million yuan. The financing will be used for the energy storage and charging pile industry in the field of new energy, helping to promote the development of the new energy industry.

At the end of December 2024, GCL Energy Technology and Ant Technologies will collaborate to promote the implementation of the RWA project for photovoltaic power plants, which is expected to become the first successful case in the photovoltaic field.

At the international level, the Hong Kong Monetary Authority has stated that it will explore opportunities for collaboration with the Hong Kong Centre under the Innovation Hub of the Bank for International Settlements on one or more tokenization themes, and collaborate with members of the CBDC expert group to further promote the development of the sandbox using their expertise.

In the 2024 Chief Executive's Policy Address, regarding the construction of a fintech innovation ecosystem, Li Jiachao mentioned that in order to promote the tokenization of real-world assets and the digital currency ecosystem, the Hong Kong Monetary Authority will soon launch the "Digital Bond Funding Scheme" to encourage more financial institutions and issuers to adopt tokenization technology in capital market transactions.

The compliance of Hong Kong dollar stablecoins provides a secure and stable payment and settlement tool for RWA transactions. In the foreseeable future, the vast majority of RWA transactions in Hong Kong will be completed using compliant Hong Kong dollar stablecoins as the carrier.

In December 2024, the Hong Kong SAR government officially announced the "Stablecoins Bill" and plans to submit it to the Legislative Council for its first review on December 18, marking Hong Kong's move towards a stablecoin regulatory framework. The goal is to complete the second round of public consultation by 2025 and submit a proposed licensing system for regulating virtual asset custody service providers, "said Xu Zhengyu, Secretary for Financial Services and the Treasury

Industry insiders have stated that the implementation of the stablecoin licensing system in Hong Kong will help improve the convenience and security of RWA transactions, promote the diversified development of the RWA ecosystem, and lay the foundation for the Web3.0 ecosystem in Hong Kong.

As a global financial center, Hong Kong has the large and mature asset targets and scale required by the RWA market, and has broad development space in the future. According to BCG's calculations, the potential tokenized asset size in Hong Kong is approximately HKD 36 trillion, including approximately HKD 29 trillion in real estate, HKD 4.5 trillion in stocks, HKD 1.3 trillion in funds, and HKD 1.0 trillion in bonds.

RWA track continues to heat up

The Boston Consulting Group referred to RWA tokenization as the "third revolution in asset management" in a research report, estimating that RWA tokenization will experience explosive growth over the next five years, with asset size potentially reaching $600 billion by 2030.

Looking at the world, the RWA track will heat up comprehensively in 2024, regulatory policies will gradually become clearer, financial institutions will compete to enter, and more and more traditional assets will flock to the chain, injecting new vitality into the capital market.

According to rwa.xyz data, the total market value of RWAs worldwide, excluding stablecoins, is expected to accelerate significantly in 2024, with a total on chain RWA value of approximately $15.2 billion and 81400 total asset holders. Among them, the market share of the private credit sector occupies an important position, with a total active loan value of 9.66 billion US dollars. In addition, the tokenized US treasury bond bond market has reached US $3.9 billion.

RWA is also becoming an important layout direction for major blockchain platforms, with platforms such as Ethereum and Algorand developing protocols that support RWA, making asset circulation on the chain more convenient.

On the other hand, large financial institutions will become the main driving force for the growth of the tokenization industry. Since 2024, traditional financial giants including BlackRock, Fidelity, JPMorgan Chase, and HSBC (00005. HK) have strategically positioned themselves in the RWA field. For example, in March 2024, HSBC launched its first RWA product, the HSBC Gold Token, aimed at retail investors in Hong Kong. HSBC users can trade on the HSBC HK App and online wealth management platforms.

As a rising star in the field of digital assets, RWA is leading a new transformation in the financial market. Looking ahead to 2025, with the advancement of technology and the continuous improvement of regulatory environment, the RWA market is expected to usher in broader development prospects. According to Bitwise's top ten predictions for the cryptocurrency market in 2025, the size of the tokenized RWA market is expected to reach $50 billion.

This article is sourced from Caihua Network