Hong Kong Opens RWA Fund Secondary Market Trading: Why Is Regulation Leading the US and Europe? The Latest 2026 Interpretation

On April 20, 2026, the Hong Kong Securities and Futures Commission (SFC) officially released a new regulatory framework, allowing tokenized investment products recognized by the SFC to be traded in the secondary market on licensed virtual asset trading platforms. This is another key breakthrough for Hong Kong in the field of RWA (real-world asset tokenization), following the first clarification of the tokenization regulatory framework at the end of 2023. From primary issuance to secondary circulation, policy implementation has given tokenized products genuine financial asset attributes. Hong Kong is accelerating the institutionalization of RWA regulation, overtaking the United States and the European Union at a visible pace.

Why is secondary market circulation a critical step for tokenization development?

The core value of tokenized products lies in liquidity. Previously, Hong Kong’s tokenized products could only be subscribed for in the primary market, and holders could not exit in the secondary market, effectively locking liquidity in place. The new framework breaks this bottleneck: after open-end fund tokenization, they can be automatically bought and sold on SFC-licensed virtual asset trading platforms. This gives retail investors a regulated trading channel. At the same time, the SFC will also consider, on a case-by-case basis, arrangements for OTC secondary market trading, further increasing flexibility. This change transforms tokenized products from “collectibles” into “tradeable assets,” paving the way for the integration of traditional finance and on-chain finance.

How big has Hong Kong’s tokenization market grown?

Market data confirms the effectiveness of the policy. By the end of March 2026, 13 tokenized products had been offered to the Hong Kong public. The total value of managed assets for tokenized equity categories increased by about sevenfold within one year, reaching HKD 10.7 billion. Using data from the Hong Kong Financial Development Council as a reference, the market value of tokenized funds rose from about USD 2 billion in 2024 to over USD 8 billion in 2025, with growth far outpacing the overall expansion of the global RWA market in the same period. The first batch of products entering the secondary market is mainly tokenized money market funds. The SFC will expand the product scope in due course in light of operational conditions, covering more asset classes.

How does the RWA regulatory path differ between Singapore and the EU?

The global RWA regulatory landscape shows distinct divergence. Hong Kong adopts a “compliance-first, parallel progress” strategy, advancing in step between stablecoin legislation and the opening of the secondary market for tokenized products. The United States follows an “open regulatory” approach—SEC approves DTCC’s tokenized pilot, while the GENIUS Act and the Clarity Act are advanced in parallel—yet a unified federal framework is still being negotiated. The EU relies on the comprehensive MiCA regulation, which provides a unified licensing and market access framework for crypto assets. However, its policy focus is more on overall crypto asset regulation rather than a detailed institutional design specifically targeting RWA. By contrast, within two and a half years, Hong Kong completed a full closed-loop cycle—from policy statements, to sandbox pilots, to legislative rollout and the opening of the secondary market—placing its regulatory pace in a leading position among major economies.

How do stablecoins and digital RMB build the settlement infrastructure for tokenized trading?

Smooth operation of the secondary market depends on compliant settlement tools. On April 10, 2026, the Hong Kong Monetary Authority (HKMA), under the Stablecoin Ordinance, granted the first batch of stablecoin issuer licenses to HSBC and Dadying Finance Technology Co., Ltd., marking the transition of compliant stablecoins from regulatory design into licensed operations. HSBC plans to launch an HKD stablecoin in the second half of 2026 and integrate it with PayMe and the HSBC HK App. Dadying will issue HKD-pegged HKDAP in phases. Both institutions’ business plans cover scenarios such as cross-border payments, tokenized asset trading, and innovative applications.

Meanwhile, substantial progress has also been made in collaborative testing between digital RMB and Hong Kong stablecoins. In February 2026, the Digital Currency Research Institute of the People’s Bank of China and the HKMA jointly launched a special cross-border RWA settlement test for digital RMB. It reduced cross-border transaction time from 2 hours in the traditional model to 3 minutes, and lowered remittance costs by more than 20%. This two-layer cross-border settlement system—“digital RMB + compliant stablecoins”—provides a practical pathway for combining sovereign credit with market efficiency.

What compliance challenges does Hong Kong’s RWA regulatory framework face?

Advancing regulation does not mean challenges disappear. Introducing secondary market trading brings new risk dimensions. The issue of price deviation comes first: when the proposed transaction price deviates significantly from the product’s real-time net asset value, platforms must issue warnings to investors. Liquidity assurance is equally critical: product providers must ensure that at least one market maker continuously provides services. In addition, infrastructure-level risks—such as cybersecurity, smart contract integrity, system interruption recovery, and the continuity of custodial operations—must be incorporated into the compliance management framework for issuers, intermediaries, and licensed platforms. Based on international experience, U.S. compliant STO exchanges have seen daily trading volumes remain at the level of tens of thousands of dollars for a long time. Verification of asset authenticity and cross-border compliance costs remain common challenges faced across the industry. Whether Hong Kong can effectively activate secondary market liquidity while maintaining regulatory prudence will still be tested by actual operational data after the first products go live.

How far are we from large-scale implementation of RWA?

The global RWA market is undergoing a critical turning point from narrative to reality. In the first quarter of 2026, the global tokenized RWA market size was close to USD 30 billion, up more than 260% year over year. The International Monetary Fund described it as “a fundamental restructuring of financial infrastructure.” Hong Kong’s pathway is systematic and forward-looking. On one hand, the HKMA has clearly stated that the number of stablecoin licenses will be strictly limited to prevent regulatory arbitrage and accumulation of systemic risk. On the other hand, bond tokenization has entered a phase of normalized issuance. The third batch of tokenized green bonds issued in November 2025 totaled HKD 10 billion, setting a record for the largest digital bond issuance globally. From precious-metals tokenization to supply-chain finance RWA, Hong Kong is building the most complete permanent bridge from traditional finance to digital finance with a comprehensive compliant framework. However, genuine secondary market activity still requires time to build up—liquidity development, investor education, and expansion of product categories are not things that can be achieved overnight. Tokenization is not about manufacturing short-term prosperity; it is about building a long-term, sustainable new category of assets.

Summary

By opening secondary market trading for tokenized funds, Hong Kong’s SFC marks a transition in RWA exploration from issuance pilot programs to ecosystem development. Thirteen products and an asset-under-management scale of HKD 10.7 billion provide a solid data foundation for the market. The rollout of stablecoin licenses and the cross-border collaborative testing of digital RMB provide dual assurance for settlement infrastructure. Compared with the distinctive regulatory paths of the U.S. and EU, Hong Kong’s “institution-first, step-by-step” strategy has run through a complete policy closed loop within two and a half years, offering a reference sample for global RWA regulation. However, from opening the policy to achieving market activity, challenges still need to be overcome—activating liquidity, forming fair pricing, and ensuring the security and reliability of infrastructure all require time and practical validation to answer.

FAQ

Q: What is RWA tokenization?

RWA (Real World Assets, real-world asset tokenization) refers to converting traditional financial assets such as bonds, funds, and real estate into digital certificates that can be transferred and settled on-chain through blockchain technology. The goal is to improve the efficiency of asset issuance and circulation and expand the scope of investor participation.

Q: When will secondary market trading of tokenized funds in Hong Kong officially launch?

The new regulatory framework was announced on April 20, 2026. The first batch of products is mainly tokenized money market funds. The SFC will expand the scope in due course based on product operations. The exact launch timeline depends on the system readiness of issuers and the licensed trading platforms.

Q: Can retail investors participate in tokenized fund trading?

Yes. Retail investors can participate in secondary market buying and selling of tokenized open-end funds recognized by the SFC through SFC-licensed virtual asset trading platforms—this is a regulated and lawful trading channel.

Q: What settlement methods are supported for tokenized fund trading?

The new framework encourages the use of regulated stablecoins and tokenized deposits as settlement tools. The first batch of stablecoin issuer licenses has been issued. Compliant HKD stablecoins are expected to be rolled out gradually from mid-2026 to the second half of the year.

Q: What is the relationship between Hong Kong’s RWA regulation and mainland China’s policies?

In February 2026, eight departments including the People’s Bank of China issued Document No. 42, which for the first time explicitly distinguishes virtual currencies from RWA tokenization at the regulatory level and establishes the principle of “strictly prohibited domestically, compliant filing required for those going out.” As an international financial center, Hong Kong promotes RWA market development under an independent judicial and regulatory system, forming a differentiated and complementary pattern relative to mainland policies.