China’s brokerages told to pause RWA tokenisation business in Hong Kong, sources say
Two brokerages were advised by the CSRC in recent weeks to refrain from conducting RWA business offshore, the sources said
China’s securities watchdog has advised some local brokerages to pause their real-world asset (RWA) tokenisation business in Hong Kong, said two sources, signalling Beijing’s concerns about a euphoric drive towards a booming digital assets market offshore.
The RWA tokenisation process usually converts traditional assets, such as stocks, bonds, funds and even real estate, into digital tokens traded on a blockchain. A raft of Chinese firms, including brokerages, have launched RWAs in Hong Kong over the past few months.
At least two leading brokerages had received informal guidance from the China Securities Regulatory Commission (CSRC) in recent weeks to refrain from conducting RWA business offshore, the sources said.
One of the sources said the latest regulatory guidance was aimed at strengthening risk management of a new business and making sure the claims made by companies are backed by strong, legitimate businesses.
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Shares in top Chinese brokerages listed in Hong Kong, including Guotai Junan International and GF Securities, lost between 2 per cent and 7.3 per cent on Tuesday, while the broader market was down 0.9 per cent at the close of the morning session.