Why has the tokenization of Hong Kong stocks been delayed?

The global wave of stock tokenization is surging, but Hong Kong has chosen to wait and see. Several insiders from the Hong Kong crypto industry have revealed that tokenization of Hong Kong stocks is unlikely to be realized in the short term.

Ten years ago, Hong Kong missed the opportunity to develop stablecoins for the Hong Kong dollar and the Renminbi, and now it is again standing still in the market for stock tokenization. Currently, the annual trading volume of US dollar stablecoins has reached $28 trillion, and euro stablecoins have also reached $2 trillion, while Hong Kong's development in this area is clearly lagging behind.

Recently, financial technology and cryptocurrency companies in the United States have sparked an innovative trend in stock tokenization. Several well-known companies have launched stock tokenization products for U.S. stocks, allowing ordinary users to directly trade U.S. stocks like Tesla and Apple on the blockchain. Some companies have even introduced tokenized stocks of private companies such as SpaceX and OpenAI, attracting widespread market attention. U.S. regulatory agencies have also shown a supportive attitude towards this technology.

However, the Hong Kong side seems unusually quiet. Although several compliant crypto companies in Hong Kong are closely monitoring the situation, none have actually participated in related business exploration. In the face of this opportunity that could become another trillion-dollar market after stablecoins, Hong Kong seems to have chosen to wait and see.

The silence in Hong Kong stems from multiple reasons. Firstly, Hong Kong law grants the Hong Kong Stock Exchange a monopoly position in the trading of Hong Kong stocks, and the implementation of tokenization for Hong Kong stocks may disrupt this long-standing pattern. Secondly, regulatory bodies and the Hong Kong Stock Exchange itself lack sufficient motivation to promote this matter. In contrast, the regulatory environment in the United States is more open, the financial innovation ecosystem is more active, and major companies are actively challenging the traditional financial system.

It is worth noting that this round of stock tokenization differs from previous attempts. Participants include not only traditional fintech companies but also several mature cryptocurrency exchanges. However, Hong Kong companies may be absent in this round of innovation.

Industry insiders generally believe that the stock tokenization market has enormous potential and is expected to become the next trillion-dollar market after stablecoins. From the perspective of market size, the market capitalization of U.S. stocks far exceeds the circulation of U.S. dollars, indicating significant tokenization potential. Additionally, there is a strong global demand for U.S. stock tokenization, especially in regions where direct purchase of U.S. stocks is challenging due to regulatory restrictions.

Stock tokenization also has advantages that traditional stock markets do not possess, such as 24/7 trading, on-chain derivatives trading, and tokenization of private company stocks. Currently, several well-known exchanges have launched related products, and the trend of US stock tokenization is taking shape.

Although the current market size of tokenization in the US stock market is only in the tens of millions of dollars, industry insiders warn that its potential should not be underestimated. Looking back at the development of stablecoins, the change from its early small scale to today's trillion-dollar market can happen overnight.

In the future, the tokenization of stocks may experience explosive growth. As an international financial center, Hong Kong should closely monitor developments in this area to avoid missing important opportunities again.