China Halts RWA Tokenization Businesses in Hong Kong: Regulatory Crackdown on Digital Assets

China's securities regulator has instructed select brokerages to suspend their real-world asset (RWA) tokenization operations in Hong Kong, according to a Reuters report. At least two financial firms received directives to cease offshore RWA activities as authorities strengthen risk management protocols. This regulatory intervention reflects Beijing's concerns about Hong Kong's rapidly expanding digital asset market. Multiple Chinese companies had recently launched RWA products in Hong Kong before the CSRC's intervention. The move follows China's 2021 cryptocurrency ban, highlighting ongoing financial stability concerns despite Hong Kong's separate financial system under the "One Country, Two Systems" framework.