The tokenization trend in the US stock market has been strong. Can we expect Hong Kong stocks to also join the blockchain wave?

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2025-06-20 19:00

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The tokenization of US stocks trend has been validated: On-chain + Off-chain assets = Liquidity Megaboom.

Original Article Title: "Will the Wind of US Stock Tokenization Also Sweep the Hong Kong Stock Market onto the Chain?"

Original Article Author: Kai Ye, Huaxia Digital Capital

Earlier, Brother Kai discussed this big picture: US stock tokenization is now bringing "global consensus assets" onto the chain. If the Hong Kong stock market still only focuses on a trading platform license and a few bond transactions, as well as the recently hot but still somewhat stablecoin license, it may miss the next wave of liquidity surge. Let's continue to discuss how this trend will unfold, how Hong Kong will respond, and how the Hong Kong stock market can get involved.

What Is Wall Street Up to Exactly?

We've already mentioned these names before: Backed, Robinhood, Ondo, Kraken, Coinbase (on the Base chain), plus SDX pulling Citigroup to create a "regulated tokenized trading market". What they are doing is quite simple—breaking down AAPL, TSLA, and even the entire S&P blue-chip stocks into on-chain RWA tokens that are fractionable, stakeable, and tradable 24/7. The traditional broker settlement period of days has turned into seconds on-chain; 1 share is split into 10,000 units, allowing $10 to be invested in top-tier companies that even grandparents are familiar with; you can collateralize bAAPL to borrow USDC and also participate in liquidity mining.

Wall Street's calculation is simple: keep the assets earning, and make costs, friction, and global time differences all disappear.

Why Does This Move Work?

· Mature Ecosystem: With a market cap of over $40 trillion and the deepest global liquidity pool, retail investors and pension funds understand the pricing of these standard products without needing market education.

· Quantitative Teammates: Operating 24/7 for seven days a week, quantitative robots adapt faster than you.

· New Collateral: Blue-chip US stock tokens are "hard currency" themselves, capable of earning interest, acting as LP, and even using positions for issuing debt.

· Transparent Accelerator: On-chain addresses are public, dividend timestamps are written into smart contracts, and even the SEC can investigate without blind spots.

In short: stable and productive, who wouldn't want it?

What Does This Trend Mean for Hong Kong?

Stop thinking in a linear way like "Hong Kong stocks on-chain = issuing sHSBC". The first lesson taught by US stock tokenization is: turn tokenized assets into LEGO building blocks that can be plugged into DeFi, collateral pools, and cross-chain bridges at any time. Hong Kong, with its Hong Kong dollar settlement, Anglo-American legal system, and quality mainland assets, can completely do one thing: upgrade itself to become the "Asia-Pacific on-chain asset hub".

Imagine this scenario: Hong Kong blue-chip stocks, REITs, MTR bonds, and even cash flows from the Guangzhou-Shenzhen-Hong Kong High-Speed Rail, including high-quality Mainland China assets listed on the Hong Kong Stock Exchange, all fragmented into RWA tokens, settled in HKD-pegged stablecoin, with 24-hour connectivity to the Singapore/Dubai secondary markets, allowing households in Europe and America to buy with a few taps on their phones before bedtime…

How to Choose the Assets?

Start by selecting assets that are "globally understandable and cash flow visible" — such as high-dividend blue-chips like HSBC, public utilities like MTR, water, and telecommunications, robust cash flow infrastructure concession rights, plus HKMA bonds. These are Hong Kong assets. These items are equivalent to the Hong Kong version of T-Bills: high credit, stable yield, simple trading logic. What the DeFi space lacks the most is this kind of "hard currency." Transforming them into composable RWA tokens can provide DeFi protocols like Aave with an "Asian collateral" option. Of course, there are also high-quality Mainland Chinese assets, not to be overlooked.

How to Piece Together the Technological and Institutional Puzzle?

· Fragmentation: Split 1 share of HSBC into ten thousand HSB tokens, so you can buy just 50.

· Stablecoin Settlement: Use an HKD stablecoin for clearing; enable USDC/HKD cross-pool automatic swaps.

· On-chain Custody: The underlying stocks are held in a trust structure, with only "redeemable certificates" circulating on-chain, presenting regulators with a familiar custody structure.

· Multi-layer Market Making: HKEX or licensed trading platforms serve as the first tier, Singapore/Dubai as the second, and on-chain DEX+Layer2 as the third, even with depth on weekends.

This set of "HKD-stable+Hong Kong stock tokenization+compliant custody" is the true Hong Kong version of the on-chain financial stack.

What More Can Be Done with the Hong Kong Dollar?

Don't just see the Hong Kong Dollar as "digital loose change." It can very well serve as the reserve currency for the on-chain financial market:

· Start with HKD-stable supporting 24-hour settlement;

· Encode Hong Kong Dollar assets (blue-chips, bonds) into smart contracts, distributing dividends weekly/monthly;

· Then, let HKD-stable plug into global liquidity via Uniswap, Curve — pools will appear with a swift channel like "HKD-USDC-bAAPL."

With this closed-loop system, the Hong Kong Dollar is not just a payment medium, but also an on-chain arbitrage anchor, allowing Hong Kong to truly establish itself as an "RWA Hong Kong Dollar Zone."

Can Hong Kong Stock Tokenization Succeed? Opening Believes It's Quite Difficult

First Sentence: First Address Asset Pool Depth, Don't Let Retail Investors Have Only Three Stocks to Buy

The liquidity of Hong Kong stocks is currently lacking visibility, without a rich set of assets, there is no liquidity, and without liquidity, there is no price discovery. Instead of rushing to issue licenses, first open the doors to accommodate more high-quality emerging companies into the Hong Kong stock market, and then expand the whitelist of Hong Kong stocks that can be tokenized.

Second Sentence: Get Stablecoins and Liquidity Providers Sorted Out, Then Technology Is Worth Discussing

For the tokenization of Hong Kong stocks, who will handle cross-border settlements? Who will provide 24/7 liquidity? Without these two aspects, even if the blockchain is fast, it will only be a LAN (Local Area Network).

Third Sentence: Regulations Should Define the Framework, Not the Recipe

The SEC approved the Bitcoin ETF without setting specific regulations. If Hong Kong wants to preserve its financial center status, it is best to leave room for technological neutrality, allowing the blockchain and protocols to drive efficiency, without letting the "one and only consortium chain" become the sole bottleneck.

Conclusion: Dare to Ride the Wave to Victoria Harbour?

The tokenization of US stocks has already proven: On-chain + Recognizable Assets = Liquidity Nuclear Explosion. Hong Kong has the world's most robust financial licensing system and an issuance end backed by Mainland China's asset pool. What is truly lacking is someone bold enough to finalize, in one go, the "Hong Kong Dollar Stablecoin + Hong Kong Stock Tokenization + Multi-chain Liquidity Pool." The wind of change is already at the doorstep. Whoever opens the door first will be the entry point for the next bull market. The Red-Clothed Godfather is waiting for you at Central Pier. Don't let this opportunity slip away to Dubai or Singapore — that would be truly awkward.

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