The trillion-dollar wave of "stock tokenization" is coming, why is Hong Kong choosing to remain quiet?

As the wave of stock tokenization sweeps the globe, Hong Kong has chosen silence. Senior executives from three Hong Kong cryptocurrency companies revealed to me that there will be no attempts at Hong Kong stock tokenization in the short term. Ten years ago, Hong Kong missed the best opportunity to develop Hong Kong dollar and Renminbi stablecoins, and has significantly fallen behind US dollar stablecoins (annual volume of 28 trillion USD) and Euro stablecoins (annual volume of 2 trillion USD). Now that the "stock tokenization" market is thriving, Hong Kong still chooses to miss out.

Starting in July 2025, U.S. regulators and corporate giants have sparked an innovative trend in "U.S. stock tokenization." Platforms like Robinhood have officially announced the launch of their U.S. stock tokenization products, allowing general users to purchase stocks such as Tesla and Apple on the blockchain without permission. Robinhood has even introduced tokenized stocks of private companies like SpaceX and OpenAI, igniting market discussions. Paul Atkins, chairman of the U.S. Securities and Exchange Commission (SEC), even recently appeared on CNBC to express his support for stock tokenization technology.

However, on the other side of the ocean, Hong Kong's crypto companies seem to be silent. Some industry players can't help but ask: Why has Hong Kong, which has strongly supported the development of cryptocurrency over the past three years, chosen to remain silent this time?

Why is Hong Kong indifferent to stock tokenization?

Faced with a market that, although still in its early stages, has the potential to become the next trillion-dollar level after stablecoins, Hong Kong seems to have chosen to give up trying. A senior executive from a Hong Kong crypto company revealed that some forward-looking practitioners in the Hong Kong crypto industry had actually been actively promoting the tokenization of stocks in Hong Kong quite early on.

In Hong Kong, the law clearly states that only exchanges recognized by the Hong Kong Securities and Futures Commission can legally operate in the stock trading market, which grants the Hong Kong Stock Exchange a "monopoly position" in the trading of Hong Kong stocks. If the tokenization of Hong Kong stocks is trialed, it will inevitably break the long-standing established monopoly position of the Hong Kong Stock Exchange.

"The Hong Kong Stock Exchange has exclusive rights to Hong Kong stocks, and no one wants to take the first step to break that exclusivity and become a sinner in the history of the Hong Kong Stock Exchange." The senior executive asked, "If you were the Hong Kong Stock Exchange, would you revolutionize your own system?"

There is significant resistance, and the Hong Kong regulatory authorities and the Hong Kong Stock Exchange itself lack sufficient motivation and drive to promote the tokenization of Hong Kong stocks, which may be the reason for Hong Kong's silence this time.

The Difference Between the United States' Active Attitude and the Current Wave of Tokenization

The situation in the United States is different from that in Hong Kong. Since Trump took office, the current regulatory agencies in the U.S. have been very supportive of cryptocurrency innovation, whether it is USD stablecoin or tokenization of U.S. stocks, both of which are enhancing the status of the U.S. dollar and U.S. stocks, making it easier for global users to bypass regulations and purchase U.S. assets.

The financial innovation ecosystem in the United States is also more vibrant and robust. Whether it is the largest online broker in the U.S., Robinhood, or the largest public chain, Solana, they both see themselves as challengers to the traditional financial world, with some even directly targeting Nasdaq. They have also successfully promoted attempts to loosen regulations on the tokenization of U.S. stocks.

This is also the difference between the current round of stock tokenization and the previous round of stock tokenization.

Previous attempts and failures:

FTX (in collaboration with CM-Equity): Previously launched US stock token trading services, but due to unclear regulations and a credit crisis at the platform, it ultimately ceased operations due to the bankruptcy of FTX.

Terra's Mirror Protocol (Synthetic Assets): Taking the path of decentralized synthetic assets, but coming to an end due to the collapse of the UST stablecoin and regulatory concerns.

Synthetix (on-chain synthetic assets): Previously launched synthetic US stock assets, but delisted due to lack of user demand and regulatory concerns.

Participants in this round: It is worth noting that the participants in this round of stock tokenization not only include powerful compliant institutions like Robinhood but also include experienced cryptocurrency exchanges like Gate that have navigated the ups and downs of the crypto market for years.

Unfortunately, among the many participants, we may no longer see the presence of Hong Kong's crypto companies. The hustle and bustle of stock tokenization is destined to have nothing to do with Hong Kong in the short term.

The Huge Potential of Stock Tokenization: A Trillion Dollar Market

Stock tokenization is the next important large-scale application track after stablecoins and the next potential trillion-dollar market, and this judgment is not without basis. Many industry players believe that the tokenized equity market "can reach a scale of trillions of dollars."

Data shows: By 2025, the value of the US stock market will reach 52 trillion USD, while the circulating US dollars only total 20 trillion USD. From the perspective of overall market size, the market for tokenization of US stocks is broader than the market for tokenization of US dollars. Currently, the market value of US dollar stablecoins (US dollar tokenization) has reached hundreds of billions of USD, while the market value of US stock tokenization is only tens of millions of USD, less than one ten-thousandth of the former.

In addition to market size, global users have a strong demand for both US stock tokenization and US dollar tokenization. Currently, regions such as Europe and China have restricted people's ability to freely purchase US stocks due to regulatory reasons. However, US stock tokenization, being issued on a public blockchain, naturally circumvents regulations, allowing all users to buy freely.

In addition, the tokenization of US stocks can achieve things that the US stock market itself cannot. The market believes that tokenized stocks have more advantages than traditional stocks.

For example, users can achieve 24/7 spot trading; users can conduct 24/7 on-chain derivatives trading; users can tokenize the stocks of private companies, and ordinary users can also pre-purchase equity of companies like OpenAI, SpaceX, ByteDance, Ant Group, etc., which have not yet gone public; users from global countries such as Europe and China can also buy regulated US stocks.

Currently, Gate.io has also launched corresponding tokenization products for US stocks, and the trend of US stock tokenization is gradually taking shape.

Although the current market size of tokenization in the US stock market is only tens of millions of dollars, merely one ten-thousandth of the US dollar stablecoin market, many industry insiders believe that this market should not be underestimated. Founded in 2014, Tether had a trading volume of only tens of millions of dollars in its first three years, but during the bull market of 2017, in just one year, Tether's trading volume increased by ten thousand times, reaching one hundred billion dollars. This year, the trading volume has even reached ten trillion dollars.

The development journey of tokenized products in the US stock market may be similar; it is waiting for its own ChatGPT moment, and the scene where everyone buys US stocks on the blockchain might change quietly overnight, just like the stablecoin track. When that moment arrives, I hope Hong Kong does not miss out on the opportunity again.