What’s allowed for cross-border RWA in bonds, stocks, gold
China’s latest joint notice by the People’s Bank of China and the China Securities Regulatory Commission prohibits onshore RWA tokenization unless conducted via designated financial infrastructure and with approval, as reported by China Daily. It also signals that offshore activities involving domestic assets by Mainland entities must meet securities, foreign-exchange, data, and other compliance obligations.
Separate regulatory guidelines clarify that domestic assets may back asset‑backed securities tokens issued overseas when full compliance is demonstrated, according to Cointeeth. In practice, this draws a bright line: onshore issuance and trading remain off-limits; cross-border structures are possible under strict oversight.
By asset class, bonds have the clearest pathway because income rights can be securitized and disclosed under established debt rules. Equity is feasible but more constrained, generally limited to qualified investors offshore. Gold typically requires a securities or trust wrapper plus regulated custody and audits.
For scale context, the on-chain RWA market reached about $247 billion this week with user growth of 35%, based on data from PANews. Size alone does not lower compliance burdens, but it underscores institutional interest.
Why dual-licensed Mainland–Hong Kong intermediaries benefit most
Regulators have effectively treated tokenization of financial claims as securities business, making licensing and controls decisive. Firms with both Mainland and news/hong-kong-crypto-trading-approval/”>hong kong permissions can integrate structuring, underwriting, custody, placement, and ongoing disclosure across jurisdictions.
This positioning reflects a broader shift toward institutions with mature legal, compliance, and audit capabilities. “The new policies are a historic progress for opening compliant channels for cross-border RWA,” said Charlie Zheng, Chief Economist at Samoyed Cloud Technology Group.
In Hong Kong, intermediaries still operate under Securities and Futures Commission oversight for placement, custody, and product authorizations. When Mainland-origin assets are involved, they also manage cross-border risks like suitability, asset segregation, data transfer controls, and foreign-exchange procedures.
Immediate compliance steps and red lines to avoid
Onshore issuance, trading, or promotion to Mainland investors is a red line unless done on designated infrastructure with approvals. Cross-border deals must document ownership rights, cash-flow waterfalls, and disclosure, while preventing any de facto onshore distribution.
Sandbox programs do not exempt Mainland rules; issuers should assume full enforcement of securities, FX, and data regimes across both jurisdictions. “The domestic ban is a continuation, mainly targeted at curbing illegal fundraising and capital outflows,” said Xiang Haotian, Associate Professor at Peking University’s Guanghua School of Management.
Robust KYC/AML, investor suitability, and independent audits of underlying assets are essential. Asset segregation, recognized custodians, and regular reporting reduce operational and legal risks.
Cross-border issuance pathways by asset class
Bonds: CSRC guidelines enable overseas ABS tokens via licensed intermediaries
Bonds and receivable-like assets can be pooled into a Hong Kong SPV, with tokenized ABS issued offshore under securities laws. The Mainland asset owner’s role, data flows, and FX proceeds must be documented and filed as required.
Licensed intermediaries handle structuring, underwriting, investor onboarding, custody, and secondary trading under applicable rules. Offering documents should define cash-flow priorities, covenants, events of default, and dispute resolution.
Onshore solicitation is avoided; distribution targets overseas qualified investors. Servicer reports and trustee or custodian attestations help maintain transparency and regulatory comfort over the asset pool.
Equity and gold: wrappers, custody, suitability, audit, and filings
Equity tokenization typically uses a holding SPV or depository receipt-like wrapper to reflect economic and governance rights. Offerings are generally restricted to professional or qualified investors with enhanced disclosures and transfer controls.
Gold-backed tokens lean on a trust, fund, or structured‑product wrapper to align commodity exposure with securities regulation. Recognized vault custody, serial-numbered bar lists, and periodic third‑party audits are standard.
Filings, FX controls, and data security must be addressed when the underlying exposure traces back to Mainland assets or entities. Marketing materials should avoid any appearance of onshore placement.
At the time of this writing, Ondo (ONDO) traded near $0.2535; this market datapoint is contextual only and not indicative of regulatory feasibility.
FAQ about cross-border RWA tokenization
How can a Mainland-origin bond be legally tokenized and issued via Hong Kong without breaching securities and foreign-exchange controls?
Use a Hong Kong SPV to issue ABS tokens offshore, maintain filings, FX compliance, audited servicing, and avoid onshore solicitation.
Is equity/stock tokenization allowed and is access restricted to qualified investors only?
Permissible offshore via wrappers under securities rules; typically restricted to professional or qualified investors with transfer and disclosure controls.
| DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing. |
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