Trump Launches Personal Memecoin, Tokenization Wave Accelerates

Recently, Trump announced the issuance of his personal memecoin $Trump on social media, once again attracting global investors' attention to the cryptocurrency market. If he returns to the White House, Trump may open a new chapter in U.S. cryptocurrency regulation, encouraging more institutions to engage in crypto innovation. Some believe this signals that the U.S. is ready to lead the industry, and other countries need to be vigilant to avoid falling behind.

Key to RWA Tokenization Development: Participation of Traditional Institutions

Tokenization is moving from concept to practice and is referred to as "the third revolution in asset management." Explosive growth is expected in the next five years, with non-stablecoin tokenized assets potentially exceeding $30 billion by 2025.

Hong Kong is actively embracing the wave of RWA tokenization. The 2024 Policy Address proposes to promote RWA tokenization and the construction of a digital currency ecosystem, and the Monetary Authority has launched the "Digital Bond Financing Scheme" to encourage the adoption of tokenization technology. These initiatives indicate that Hong Kong aims to reshape its financial competitiveness through tokenization.

However, the main force driving global tokenization innovation still comes from the United States. Traditional institutions in the U.S., represented by Wall Street, are accelerating the on-chain transition of traditional financial assets and businesses through tokenization. Many large financial institutions are leading the first wave of tokenization, and their influence is spreading globally.

In contrast, Hong Kong has yet to see the emergence of institutions or projects with global influence in the field of tokenization. Although policy initiatives are positive, the participation of traditional financial institutions in Hong Kong remains relatively low, and there is still a cautious attitude towards the Web3 industry, which is more in a "wait-and-see" state. This has resulted in the financial resource potential of Hong Kong not being fully realized.

The conservative attitude of traditional institutions in Hong Kong towards tokenization mainly stems from compliance requirements. Compliance is necessary, but it should not become an obstacle to innovation. The core of tokenization lies not only in technological implementation, but also in institutional participation. The degree of participation by traditional institutions will largely determine the early prosperity of the tokenization market.

To this end, Hong Kong should attract more traditional institutions to participate in innovative and market-potential frontier practices through a more open tokenization sandbox mechanism. Stablecoins, DLT, and other related explorations can be jointly included in the sandbox for collaborative pilot projects; and institutions should be encouraged to freely explore tokenization applications based on their own advantages. Only with more resource-rich and asset-holding institutions actively participating in innovation can Hong Kong gain more initiative in the transformation.

Focus on standardized financial assets and expand the RWA market size

In addition to stimulating market innovation, Hong Kong also needs to clarify its development focus in the area of tokenization of assets. Global tokenization exploration mainly focuses on standardized financial assets, while Hong Kong is currently most concerned with the tokenization of non-financial assets such as new energy and agricultural products. Although these explorations contribute to the long-term development of the ecosystem, it is difficult to establish a market advantage in the short term.

The tokenization process of different assets will have significant time differences: standardized financial assets such as bonds and funds, which have stable returns and considerable scale, are currently the most suitable asset classes for tokenization. Therefore, Hong Kong should focus on these standardized financial assets in the short term and fully leverage its advantages as an international financial, trade, and shipping center, with a focus on the tokenization applications in trade and cross-border related scenarios, rapidly expanding the market size of RWA tokenization.

In terms of technology, although it is not the key to the success or failure of tokenization, an open technology system is more conducive to innovation. Public chains significantly outperform other technology systems in terms of global liquidity and openness, becoming the preferred platform for most tokenized bonds and funds. In terms of security, asset tracking and auditing on public chains are also becoming easier. Therefore, Hong Kong should explore tokenization applications and innovations on public chains more actively under the premise of compliance.

RWA tokenization, as a product of the fusion of two different financial systems, ideally allows real assets to accelerate their migration on-chain while ensuring their value is not limited to the chain, ultimately serving and reflecting the real world. In the face of global financial institutions' proactive actions in the field of tokenization, Hong Kong needs to seize the time window. If it can leverage its institutional and market advantages to accelerate the embrace of innovation, while exploring a balance between providing traditional institutions with more innovation space and regulatory compliance, and relying on the vast asset support provided by the mainland, Hong Kong is expected to have an absolute advantage in the field of tokenization, with broad prospects. Research estimates that the potential asset scale for tokenization in Hong Kong has reached as high as 36 trillion HKD.

Looking forward to Hong Kong achieving rapid development in the RWA field by 2025.