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Source: Lang Guangzhao, Zero One Think Tank
On February 13, 2025, Huaxia Fund (Hong Kong) announced that its “Huaxia Hong Kong Dollar Digital Currency Fund” has been approved by the Hong Kong Securities and Futures Commission (SFC) and is expected to be officially listed at the end of February.
The fund is the first tokenized fund for retail investors in the Asia-Pacific region, providing investors with innovative investment tools to obtain Hong Kong dollar monetary funds through blockchain tools.
In recent years, Hong Kong has increased its efforts in the virtual asset market. In 2022, the Hong Kong Financial Secretary issued the “Policy Declaration on the Development of Virtual Assets in Hong Kong”, stating that “from the perspective of financial innovation, tokenizing different types of products will definitely be possible.We are facing greater opportunities.”
After that, the Hong Kong Securities and Exchange Commission issued two circulars on the “Circular on Intermediaries to engage in Tokenized Securities related activities” and its appendix and the “Circular on Tokenized Securities and Exchange Commission accredited investment products”, clarifying that the Hong Kong Securities and Exchange Commission’s Regulations on the “Circular on Tokenized Securities and Exchange Commission’s approval of investment products”Considerations and regulatory measures for tokenized securities include clarification and relaxation of some original policies.
The China Hong Kong Dollar Digital Currency Fund is the first retail fund approved to be launched after the Hong Kong Securities Regulatory Commission issued the “Circular on Tokenization of the China Securities Regulatory Commission’s Accreditation of Investor Products” in November 2023.
Huaxia Fund (Hong Kong) said that in the face of investors’ growing demand for innovative investment products, the fund aims to provide investors with a richer on-chain investment options by integrating blockchain technology and expandableTransparent and secure settlement is achieved on the publicly licensed blockchain, thus bringing investors a diversified investment experience.
In the global market, the exploration of tokenized funds has been effective.
Franklin Templeton launched the Franklin OnChain U.S. Government Money Fund (FOBXX) in 2021, the first SEC-approved tokenization in the United States to process transactions and record ownership using Stellar blockchain technologyfund.
According to recent reports, Franklin Templeton will launch Solana, becoming the third largest tokenized money market fund.The fund has been launched on Ethereum, Coinbase Base, Aptos and Avalanche, using the Stellar network as the main blockchain.FOBXX’s market value has reached US$594 million.
On October 2, 2023, UBS Asset Management announced the launch of a pilot project for tokenized funds.In November 2024, UBS launched the Ethereum-based tokenized money market fund uMINT in Singapore, providing cash management services to institutional investors.
In March 2024, Blackrock cooperated with tokenization platform Securities to launch the institutional-level tokenization fund BUIDL.The fund is based on Ethereum and supports real-time on-chain transfers and USDC redemption. The management scale exceeded US$500 million in 4 months, attracting the participation of institutions such as Ondo Finance.
Chinese institutions have also long explored tokenized funds.
It is reported that Jiashi International cooperated with Meta Lab HK to tokenize its fixed income fund products, and completed its reporting to Hong Kong regulators in November 2023, and finally successfully issued Hong Kong on December 28, 2023.The first tokenized fund.This is the first fixed income tokenized fund launched by Chinese financial institutions in Hong Kong. However, unlike Huaxia Fund, this fund of Jiashishi International is mainly aimed at professional investors, and the product investment target is high-rated US bonds.
Tokenized funds are part of the entire RWA (real-world asset tokenization) market.RWA has developed rapidly in recent years and has begun to explode in 2024, with a market size of more than US$14 billion.But in the eyes of many industry insiders and researchers, 2024 is just an appetizer, and 2025 is the first year of the real RWA outbreak.
Before this, internationally renowned institutions such as Citibank, McKinsey, and BCG have made predictions on the potential scale of RWA, with at least forecasts, and by 2030 there will be US$4 trillion, and at most more than US$30 trillion.For 2025, investment institution Bitwise predicts that with Wall Street institutions accelerating entry, the RWA market size is expected to reach $50 billion and may grow exponentially from then on.
Regarding the approval of the Huaxia Hong Kong Dollar Digital Currency Fund, Huaxia Fund (Hong Kong) CEO Gan Tian said: “This milestone event is a key step towards our Web 3.0 strategy.”
He believes that tokenized funds can bring revolutionary advantages to investors, including blockchain-based ownership issuance and transparent settlement.Tokenized securities are expected to reshape the global capital market structure, and the launch of the China Hong Kong dollar digital currency fund is a good demonstration of how to use digital technology to make traditional financial products within reach.
Standard Chartered Bank, as the tokenization agent, digital platform operator and token custodian of this product, also provides traditional fund management and trust services. The fund will be tokenized through Libeara, a tokenization platform under SC Ventures.
“Digital assets are bringing fundamental changes to the financial market ecosystem,” said Standard Chartered Hong Kong and CEO of Greater China and North Asia.
