Mainland Chinese companies are experiencing a noticeable decline in their Real-World Asset (RWA) business activities in Hong Kong, reflecting shifting market dynamics, regulatory challenges, and weakening investor sentiment. As Hong Kong continues positioning itself as a global hub for digital assets, tokenization, and Web3 innovation, the downturn highlights the growing gap between local opportunities and the operational constraints faced by mainland entities. Stricter compliance requirements, evolving licensing rules, and increasing scrutiny around cross-border financial activities have contributed to a slowdown in participation from mainland firms.
The decline comes at a time when RWA tokenization is gaining global momentum, with institutions worldwide exploring blockchain-backed representations of real estate, commodities, bonds, and other tangible assets. While Hong Kong has embraced RWA projects as part of its broader effort to attract Web3 companies, mainland enterprises are finding it increasingly difficult to keep pace due to regulatory restrictions within China, limitations on capital movement, and concerns about operating in a jurisdiction with a different digital asset framework.
Industry insiders note that many mainland companies previously viewed Hong Kong as a gateway for RWA pilots, fundraising, and global outreach. However, due to tightening policies, increased compliance costs, and uncertainty around regulatory alignment between Hong Kong and mainland China, companies have scaled back operations. Some have paused new RWA initiatives, while others have exited the market altogether in favor of regions with clearer digital asset policies.
This shift has impacted overall market activity, reducing the number of tokenized asset projects initiated by mainland companies. Experts suggest that unless regulatory coordination improves or new incentives are introduced, the decline may continue throughout 2025. Despite these challenges, Hong Kong remains committed to expanding its digital asset ecosystem, with continued support for RWA innovation, digital securities, and blockchain-driven financial transformation.
For investors and market participants, understanding the reasons behind the decline is essential for navigating the evolving RWA landscape in Asia. The situation underscores the complexities of cross-border regulation and the importance of policy clarity for businesses operating in emerging digital financial sectors. As the region moves forward, collaboration, regulatory refinement, and institutional engagement will play crucial roles in determining the long-term outlook for RWA development between mainland China and Hong Kong.
