China’s security regulator, the China Securities Regulatory Commission (CSRC), has advised local brokerages to pause their real-world asset (RWA) tokenization business in Hong Kong.
According to a report by Reuters, at least two leading brokerages in Hong Kong have received informal guidance from the CSRC recently to refrain from conducting RWA business offshore. This development comes at a time when Hong Kong is making efforts to position itself as a digital assets hub in the Southeast Asian region.
The move follows Hong Kong’s June statement, noting its Financial Services and the Treasury Bureau (FSTB) and the Hong Kong Monetary Authority (HKMA) are conducting a legal review of RWA tokenization, drawing on international experience.
Furthermore, in the last few years, China has been adopting stronger laws related to cryptocurrencies. It had banned cryptocurrency trading and mining in 2021, citing financial system stability concerns. In a recent development, Chinese regulators asked big local brokers to halt the publication of research endorsing stablecoins to curb a surge in interest in digital currencies among domestic investors.
China’s role in crypto industry
At the recent Hong Kong Bitcoin Summit, Eric Trump, son of the US President Donald Trump, hailed China as “a hell of a power” in the digital asset space. He also added that he would love to see Donald Trump and Xi Jinping talk about Bitcoin.
Despite such traction and a growing investor base in the country, CSRC’s restrictions on local RWA initiatives show China being careful with the emerging technologies and offshore digital markets.
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