Hong Kong’s path to tokenization of Korean assets.
Hong Kong’s path to tokenization of Korean assets.
Written by: ekkoan, ryanyoon
Compiled by: Chopper, Foresight News
According to RWA.xyz data, the RWA market size has grown from approximately US$1.5 billion in August 2023 to approximately US$38.86 billion on September 13, 2026, an increase of nearly 26 times. The types of assets that can be tokenized continue to be enriched, and governments around the world are also formulating relevant issuance and sales rules.
The growth trend has been clarified, and the next core proposition is: how to package assets into products that investors can actually buy and eventually get paid.
Where should tokenization take place?
Multiple jurisdictions have successively introduced rules related to token assets, but regulatory requirements and advancement pace vary from place to place. The place where a product is issued will directly affect the speed of its introduction to the market.
Hong Kong has a mature securities regulatory framework that can connect with global investors, and has accumulated experience in the issuance of tokenized bonds (including government bonds). The requirements related to the licensing system and investor protection provide a product implementation framework for issuers and intermediaries.
Hong Kong has established full-process rules for tokenization, covering Securities and Futures Commission licenses, virtual asset service provider (VASP) supervision and technical security guarantees. A clear regulatory framework makes it easier for institutions to plan issuance plans and for institutional investors to evaluate their protected rights and interests. This is also an important reason why Hong Kong has become the RWA distribution and distribution center.
So, how can assets from other countries reach overseas investors through Hong Kong? This article takes Korean assets as an example to break down the entire landing process.
How does the Korea-Hong Kong linkage structure work?
The architecture diagram is divided into two parts. On the left is South Korea, where the underlying assets originate; on the right is the place where the product is issued and sold, namely Hong Kong and the British Virgin Islands (BVI).
Black arrows represent product architecture links.
Korean brokerage: Provides purchasing channels for underlying assets, including listed stocks, fund shares, bills, etc.
BVI Special Purpose Vehicle (SPV): Acquires and holds underlying assets through the brokerage account of the Hong Kong subsidiary of a Korean brokerage, and then issues notes backed by the assets.
Tokenization platform: Generate tokens representing the notes issued by the SPV and record issuance information and ownership.
Distribution agencies: sell products to overseas professional investors through licensed intermediaries and compliant trading venues.
The orange arrow represents the flow of subscription funds.
Overseas professional investors use legal currency or stable currency to subscribe, and the funds are transferred to the SPV through an intermediary. If investors use stablecoins to subscribe, the SPV will be converted into legal currency through a centralized exchange. The funds are then transferred to Hong Kong entities and then delivered to Korean securities firms, which complete the purchase of underlying assets.
Finloop, a Hong Kong financial technology company, calls this model a dual-engine model: one end is responsible for asset mining, and the other end is responsible for product issuance and distribution. The model has three core features:
Asset sources are replaceable. Brokerages from other countries and their Hong Kong entities can replace Korean institutions. Hong Kong can serve as a channel to distribute products backed by multinational assets.
SPV is at the core of the entire architecture. Receive subscription funds, hold/purchase underlying assets, and issue notes. Investors claim rights and interests from the SPV in accordance with the terms of the product, so the SPV's rights to the underlying assets and its ability to transmit income are crucial.
SPV connects on-chain payment and traditional finance. Investors can use stablecoins to subscribe for and hold tokenized notes, while the underlying assets are purchased and held through the brokerage and custody system.
The premise for the establishment of this structure is stable links, high-quality underlying assets, a complete issuance structure, and legal and compliant investor access channels.
Select underlying asset
Before issuing a product, the SPV must have clear legal rights to collect the cash flows generated by the underlying assets. In the case of treasury bonds and fund shares, the core issue is whether the SPV can directly purchase and hold such assets; in the case of export accounts receivable and music copyright fees, the legal relationship is more complicated: the right to receive payments in the future needs to be transferred to the SPV, or the asset holder must assume legally binding obligations to collect payments and transfer funds.
Regardless of the asset, the contract must clearly define the ownership of the funds, the recipient, and how the funds are transferred to the SPV. Without a clear path for repayment, assets cannot stably support payments to investors.
What products do offshore issuers create?
In this model, the core vehicle for tokenization is the SPV. Even if Korean underlying assets are selected, an independent entity still needs to issue tokens and distribute the proceeds to foreign investors. Finloop’s twin-engine model hands that role to a special purpose vehicle SPV registered in the British Virgin Islands (BVI). The SPV serves as a hub between Korean asset holders and overseas investors.
The SPV issues tokenized notes or securities backed by Korean asset income rights. Foreign investors purchased financial products issued by the SPV, not Korean government bonds or export receivables themselves. According to the terms of the product, the SPV pays income to investors and redeems the principal at maturity.
To ensure that the structure operates reliably, the timing of SPV inflows must match the redemption nodes for investors. The issuer must first find out the payment schedule of the underlying assets: principal and interest of government bonds, fund dividends and redemptions, export account settlement funds or copyright fees. If the investor's redemption time is earlier than the SPV's recovery of asset payments, the product may have a liquidity gap and a redemption delay may occur.
Registering an SPV offshore does not automatically receive cash flow generated from Korean assets. The contract must state the SPV’s legal rights to the underlying assets, the payee, and the person responsible for transferring funds to the SPV. The tokenization platform keeps transparent records of total issuance, token holdings, and token destruction.
The core task of the offshore issuance stage is to ensure that the actual recoverable funds of the SPV are sufficient and on time to meet the payment terms promised to investors.
After completing the sale in Hong Kong, how wide can the product be circulated?
Creating a product with the help of an offshore SPV is only the first step. To sell to overseas investors, issuers also need financial institutions to be responsible for distribution. Finloop uses licensed Hong Kong intermediaries in its plan: products are reviewed in accordance with Hong Kong securities rules, sold to professional investors, and reach investors outside Hong Kong.
The intermediary institution reviews the SPV product terms and risks, and verifies whether each investor has qualified investor qualifications. If the product is limited to professional investors, the transfer of tokens after issuance is also restricted. Product terms restrict tokens to transfer to qualified buyers only. This is the structuring scheme for Finloop’s private placement products, but this restriction does not apply to all tokenized securities in Hong Kong.
Finloop also proposed that products launched in Hong Kong can be subsequently circulated through intermediaries and trading venues in other regions. However, the initial launch in Hong Kong does not mean that it automatically obtains sales and trading licenses in other regions. Each market needs to independently evaluate local regulatory rules. If investors want to sell before maturity, they need to find a counterparty and complete pricing; if they want to use the product as collateral, the institution also needs to accept the collateral.
Within this structure, Hong Kong is responsible for the IPO channel and investor qualification verification functions. Sales, transactions, or pledge use in other regions need to be arranged separately.
Three types of risks that may interrupt the delivery of Korean assets to investors
Even if the tokenized products are successfully sold in Hong Kong, they may not be able to pay investors as agreed. The cash flow generated by the underlying assets needs to be transmitted to investors through the offshore issuance vehicle SPV. The following three types of risks will interrupt the capital link:
Rights and payment arrangements are not clearly agreed upon: For assets such as export accounts receivable, the contract must specify the place of payment and the person with the right to receive payment. Unless collection obligations and settlement processes are legally enforceable, asset recovery may not reach the SPV.
There is a time mismatch between fund collection and redemption: If investors pay earlier than the underlying assets are settled, the SPV will face a liquidity gap and the payment will be delayed. When Korean won assets are used to back dollar-denominated products, exchange rate fluctuations and conversion costs will also erode earnings.
Cross-border fund transfers and tax bottlenecks: Having a Hong Kong intermediary with product sales qualifications does not mean that funds can be smoothly transferred from Korean asset holders to offshore SPVs, nor does it mean that payments to overseas investors can be successfully completed. Cross-border transfers and tax procedures must be implemented and feasible.
The core of the success or failure of this model lies in whether the cash flow generated by Korean assets can be delivered to foreign investors via SPV in full and on time in accordance with the contract.
The second release is far more important than the first
Issuing Korean asset-backed products in Hong Kong is just the starting point. The initial issuance takes a long time, and all parties need to fully adjust assets, finalize contracts, and design sales plans. If every time a new product is released, the entire process must be rebuilt from scratch, it will be difficult to scale the business. From the second time onwards, the issuer needs to reuse the structure established in the first order.
USD-settled export receivables are an ideal target to verify the reusability of this model. Issuers and intermediaries can use the debtor evaluation standards and product information disclosure plans formed in the initial issuance to subsequent accounts receivable products to reduce the cost of new product design. However, using the same set of evaluation standards does not mean that every account receivable has the same risk.
To judge whether this model can support the long-term market, focus on three major indicators:
With each new issuance, does the time required for asset due diligence continue to decrease?
Will existing investors continue to invest in new products?
Are asset holders willing to continue supplying assets?
As experience in export receivables projects accumulates, this model can be expanded to other Korean assets. The success of a model cannot be determined by just one successful release. Asset holders must continue to provide the right assets, investors must be willing to reinvest, and intermediaries must see value in bringing new products to market.