Why Korean Companies Choose Hong Kong for RWA Expansion

[Block Media Editor Hwang Hyo-jun] In January, the amendment to the Electronic Securities Act and the Capital Markets Act passed the National Assembly, recognizing distributed ledger technology as a method for electronic registration of securities and establishing a legal foundation for the issuance and circulation of tokenized securities. As a result, domestic financial companies are accelerating the establishment of issuance and circulation infrastructure.

However, one question remains. Recently, Mirae Asset Securities and Shinhan Investment Corp. announced that they are preparing to expand their tokenization business with a focus on their Hong Kong subsidiaries as they enter the global market. While financial companies are preparing for the tokenization of non-traditional securities such as real estate and art domestically, they are pursuing the tokenization of traditional securities like stocks and bonds overseas.

Now that related systems are beginning to be established domestically, why have financial companies chosen Hong Kong as the hub for their RWA strategies? This article compares the institutional differences between Korea and Hong Kong and examines why domestic financial companies are opting for Hong Kong.

1. The Foundation for Tokenization is Established, but Insufficient for RWA Market Entry

With the passage of the amendments to the Electronic Securities Act and the Capital Markets Act in January 2026, domestic tokenized securities have been incorporated into the regulatory framework for the first time. The Electronic Securities Act recognizes distributed ledger technology as a method for electronic registration of securities, while the Capital Markets Act establishes a legal foundation for the issuance and circulation of tokenized securities. This is significant as it lays the groundwork for tokenized securities, which had previously been confined to innovative financial services and regulatory sandboxes, to be issued and circulated within the general legal framework.

However, just because a legal foundation has been established does not mean that the market will immediately become active. The amended laws are scheduled to take effect in February 2027, and before that, detailed systems must be established regarding the recognition requirements for distributed ledgers, issuer qualifications, the role of account management institutions, and investor protection systems. Moreover, this system is designed primarily around non-traditional securities such as investment contract securities and non-monetary trust securities. In contrast, the regulatory framework and market infrastructure for the on-chain issuance and circulation of traditional financial assets such as government bonds, corporate bonds, listed stocks, and public funds have not yet been actively discussed. This stands in stark contrast to the rapid growth of the global market centered around the tokenization of traditional financial assets like government bonds and MMFs.

This difference paradoxically stems from Korea's efficient financial infrastructure. Korea has an integrated structure centered around the Korea Exchange (KRX) and the Korea Securities Depository (KSD), which allows for efficient management of rights and transactions using the existing system. Given that the centralized financial infrastructure already possesses high efficiency, the expected benefits of introducing blockchain are not as significant compared to other countries. Additionally, the financial authorities' careful attention to investor protection and the stability of financial and capital markets has led to cautious institutional design. For these reasons, the domestic system has been designed to prioritize the incorporation of non-traditional securities, which were difficult to accommodate under existing regulations, into the regulatory framework over traditional financial assets such as listed stocks.

This is a realistic approach considering the structure of the domestic capital market. However, as the global RWA market shifts its focus to traditional financial assets, it appears that Korea will also need to expand its systems and markets to include the tokenization of traditional financial assets as a key task for securing global competitiveness in the long term.

2. Hong Kong's Existing Securities License Allows for Expansion of Tokenization Business

Hong Kong has developed its system by incorporating tokenization into the existing securities regulatory framework rather than treating it as a separate financial business. In 2019, the Securities and Futures Commission (SFC) proposed the principle that if the underlying asset of a security token (STO) is a security, the existing securities regulations would apply. In 2023, it introduced the principle of "Same business, same risks, same rules," establishing detailed criteria for financial companies with existing licenses to handle tokenized products. In other words, tokenized securities are interpreted not as a separate asset class but as a new method of issuing and circulating existing securities. As a result, financial companies can expand their tokenization business within the existing licensing framework without waiting for new legislation or a dedicated token license.

In this regulatory framework, the key to the tokenization business is the Type 1 (Securities Trading) license. Since the SFC classifies tokenized securities as existing securities, securities firms holding a Type 1 license can engage in dealing, brokerage, and sales of tokenized securities without a separate token license.

However, depending on the business model, additional licenses may be required. If a secondary market for tokenized securities is operated by directly managing a matching engine, a Type 7 (Automated Trading Services) license will also be required. If a trading platform for general virtual assets that do not qualify as securities is operated, a Virtual Asset Trading Platform (VATP) license must be obtained. Therefore, for a typical securities firm that does not operate a trading platform, the Type 1 license serves as the core requirement for the tokenization business. Of course, merely holding an existing license does not mean that tokenized securities can be immediately brokered or sold. Prior consultation with the SFC is required before handling new products, and qualified personnel capable of managing and supervising the tokenization structure must be secured. Additionally, enhanced conduct regulations such as investor suitability assessments, smart contract verification, and disclosure of settlement risks must be met. However, these requirements are relatively less burdensome compared to establishing a new entity or obtaining a separate license.

In fact, domestic securities firms that have entered Hong Kong are utilizing this system. Mirae Asset Securities' Hong Kong subsidiary received approval for a "VA License Uplift" in April this year, adding the scope of virtual asset-related business to its existing securities license, becoming the first domestic securities firm to enter the Hong Kong digital asset retail market. Shinhan Investment Corp. is also preparing to obtain SFC approval to expand its handling of tokenized assets (STO·RWA) based on its existing securities license.

In conclusion, Hong Kong has incorporated tokenized securities into the existing securities regulatory framework early on and has created an environment where businesses can expand using existing securities licenses. Financial companies can gradually expand their tokenization business based on existing approvals rather than waiting for new regulations or separate token licenses, providing them with more favorable conditions for actual commercialization compared to Korea. This institutional advantage is a major reason why domestic financial companies are choosing Hong Kong as a springboard for entering the global RWA market.

3. The RWA Market is Hard to Regain Once Lost

There is little disagreement about the growth potential of the RWA market. McKinsey forecasts that the tokenization market will reach approximately $2 trillion by 2030, while Citi predicts it could grow to as much as $5 trillion. Although there are differences in market size forecasts, it is clear that tokenization will establish itself as the next-generation financial infrastructure.

In line with this trend, global financial companies and blockchain firms are accelerating their competition for market dominance. The U.S. tokenization infrastructure company Securitize is transferring various financial assets such as government bonds, MMFs, treasury stocks, and credit products on-chain, processing approximately $1.9 billion in tokenized asset transactions in just the first quarter of 2026. The leading U.S. investment platform Robinhood is also expanding its infrastructure to trade U.S. stocks and ETFs on a blockchain basis by building its own blockchain. After launching its blockchain, Robinhood recorded approximately $150 million in tokenized asset transactions in less than three weeks. These two cases demonstrate that tokenization has moved beyond the technology validation stage and has entered a competitive phase in the actual financial services market to secure customers and liquidity.

The importance of this competitive edge lies in the nature of the financial industry. As financial services accumulate customers and liquidity, the network effect strengthens, and the switching costs for users increase. According to global market research firm J.D. Power, only about 4% of consumers change their primary financial institution in the U.S. Tokenization platforms are likely to maintain a long-term competitive advantage for those who secure investors and liquidity first.

Korea also cannot avoid the global competition for market dominance. Since tokenized assets are issued and circulated on a blockchain basis, global investors can access them 24/7, meaning domestic financial institutions will compete directly with overseas players. Currently, due to domestic regulations, it is impossible for foreign companies to directly tokenize Korean listed stocks, but it is possible to provide investment opportunities in Korean assets using derivative products or synthetic assets that track only economic value. The scenario where foreign companies establish SPVs in Korea to purchase and hold stocks and then push for tokenization using them as collateral cannot be ruled out.

In fact, such movements are already emerging. In June, the global digital asset exchange Binance began supporting perpetual futures trading based on Samsung Electronics, SK Hynix, Hyundai Motor, and other assets. Hyperliquid is also supporting trading of the same stocks. Of course, this does not legally constitute a structure for directly issuing or transferring Korean stocks. However, from an investor's perspective, an environment has already been established where they can invest in price fluctuations of Korean assets through overseas platforms. This is why Korea must secure competitiveness early on to seize investors and liquidity in the global market, going beyond mere regulatory adjustments.

4. Urgent Need for Domestic Regulatory Revisions and Infrastructure Development to Secure Competitiveness

The RWA market is not just a competition to launch new products but a competition to secure leadership in next-generation financial infrastructure. Once a customer base and liquidity are established, they do not easily migrate to other platforms. For this reason, domestic financial companies are also showing movements to enter the RWA business through Hong Kong as a base to accumulate experience in issuance, sales, and operations in order to secure competitiveness in the global market. What assets domestic financial companies will tokenize and how they will structure these into financial products to present to the market will also be important competitive factors.

However, in the long term, it will be difficult to secure competitiveness solely through entry into overseas markets. There is a need for tokenized products that transfer ownership of domestic assets such as Korean stocks and bonds on a blockchain basis. For this, relevant systems and market infrastructure must be in place. Along with accumulating experience abroad, a foundation for stable growth of tokenized finance must be established domestically to secure global competitiveness. Ultimately, Korea's RWA competitiveness will depend on how quickly domestic regulations and market infrastructure are established and how swiftly financial companies can enter the market based on this foundation.

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