Hong Kong and Mainland China Investors Championing Tokenization
The retail investment market in Hong Kong and Mainland China has no shortage of potential opportunities for investors. However, a new report reveals that it is the advent of tokenized funds with accelerated settlement and 24/7 access that excites retail investors, and they are willing to put their money where their mouth is.The report was produced through a partnership between Aptos Labs, a world leader in blockchain solutions, Boston Consulting Group, a global management consulting firm, and Hang Seng Bank, one of the largest financial banking corporations in Hong Kong.
A Pilot to Understand Investor Behaviour
The basis of the findings was a pilot in Hong Kong that experimented with tokenized funds settled utilizing programmable digital cash. They performed a survey involving 500 retail investors both in Hong Kong and the Chinese mainland.The data derived from the survey was nothing short of overwhelming: a majority, 61 percent, pronounced that they would channel twice as much allocation to their funds if tokenized funds were an option. This figure states more than just interest, it’s a solid commitment from investors.
Interest in Features and Accessibility
Another fascinating thing about the results of the survey was the investor’s interest in the “non-monetary” features. A staggering 97 percent of the respondents registered their interest in features such as speed of settlement, availability to access funds round the clock, and greater transparency.Furthermore, around 71% channeled their interest to a 24/7 secondary trading feature, stating this would motivate them to invest more. These considerable findings show how investors see the merit in the practical attributes beyond the exclusive technology used to actualize them.
Increasing Global Interest in Tokenization
It’s crucial to remember that this mounting interest is not limited to Hong Kong and Mainland China. Around the globe, tokenization is drumming up a widespread interest seen through the increasing focus of prominent global banks and financial institutions on tokenization. Tokenized real-world assets have witnessed a significant growth by 13% in the last month, now standing at a total of approximately $23 billion, according to data from RWAxyz.
Deep Dive into the Findings
The report concluded that, “Token-based infrastructure is both technically feasible and commercially viable, tying clear investor demand to the next generation of financial infrastructure.” However, it also touched on the potential limits of demand for Central Bank Digital Currencies (CBDC) in retail scenarios as regulated stablecoins and tokenized deposits evolve.Interestingly, the study also revealed little divergence in investor preferences amongst different types of digital currencies, such as Central Bank Digital Currencies (CBDC), tokenized bank deposits, or regulated stablecoins, as long as they offered the same features and operated under legal frameworks.
Current State of Tokenized Funds
While tokenized funds already exist in Hong Kong, most products are presently limited to subscriptions and redemptions, the report noted. Moreover, secondary trading is largely inaccessible.The report was released amidst the ongoing expansion of Hong Kong’s digital asset framework. Despite crypto trading restrictions in the mainland, an estimated 78 million Chinese citizens reportedly hold cryptocurrencies.
