Trump Memecoin and the Wave of Tokenization: New Changes in the Global Financial Landscape

Trump recently announced the launch of his personal memecoin $Trump on social media, attracting the attention of global investors back to the cryptocurrency market. If Trump returns to the White House, it could usher in a new era of crypto regulation in the U.S., encouraging more institutions to engage in the wave of crypto innovation. The U.S. policy head of a trading platform recently stated that Trump's move sends a signal that America is back and ready to lead the industry. This means that for other countries, if they are not careful, they may fall behind.

The Development Trend of Real World Asset Tokenization

Tokenization is gradually moving from concept to implementation, and is referred to by some consulting firms as "the third revolution in asset management." It is expected that this field will experience explosive growth in the next five years. Research institutions predict that by 2025, the scale of non-stablecoin tokenized assets will exceed $30 billion.

As one of the global financial centers, Hong Kong is actively embracing the wave of RWA (Real World Asset) tokenization. The 2024 policy address proposed to promote the construction of the RWA tokenization and digital currency ecosystem. The Hong Kong Monetary Authority has also launched the "Digital Bond Financing Scheme" to encourage the adoption of tokenization technology in the capital markets. These initiatives indicate that Hong Kong aims to reshape its financial competitiveness through tokenization and take a proactive position in future competitions.

However, the main driving force behind global tokenization innovation still comes from the United States. Traditional financial institutions in the U.S., represented by Wall Street, are not only directing traditional funds to blockchain through Bitcoin spot ETFs but are also accelerating the on-chain process of traditional financial assets and businesses with the help of tokenization technology. Several large financial institutions are igniting the first wave of tokenization, with their influence spreading globally. An asset management company has launched a U.S. Treasury tokenization fund with a scale exceeding $630 million, while another large bank is also leading the tokenization process of traditional assets such as U.S. Treasury bonds and money market funds through its platform.

In contrast, Hong Kong has yet to see the emergence of globally influential institutions or projects in the field of tokenization. Although Hong Kong has shown a proactive stance in promoting tokenization policies, the participation of traditional financial institutions in Hong Kong is relatively low compared to the innovation led by major financial institutions in the United States, and they maintain a cautious attitude towards the Web3 industry, remaining more in a wait-and-see state. This means that while Hong Kong has abundant financial resources, its potential for innovation in tokenization has not been fully realized.

Challenges and Opportunities in Tokenization Development in Hong Kong

The conservative attitude of traditional institutions in Hong Kong towards tokenization mainly stems from compliance requirements. While compliance is necessary, it should not become an obstacle to innovation. The essence of tokenization lies not only in technological implementation but also in institutional participation. The level of participation by traditional institutions will largely determine the early prosperity of the tokenization market.

In the short term, it is difficult to change the existing model. Hong Kong should attract more traditional institutions to participate through a more open tokenization sandbox mechanism, engaging in innovative and market-potential cutting-edge practices. At the same time, to avoid sandbox fragmentation, Hong Kong can include relevant explorations such as stablecoins and distributed ledger technology in the sandbox for joint pilot projects. More institutions should also be encouraged to freely explore tokenization applications based on their own advantages, whether it is tokenized funds and stocks or other assets. As long as there is willingness and capability, they can conduct small-scale pilots in the sandbox, summarize experiences through exploration, and gradually enhance institutions' willingness and ability to innovate in the field of tokenization.

In addition to stimulating market innovation, Hong Kong also needs to further clarify its development focus at the level of tokenized assets. The global exploration of tokenization mainly focuses on standardized financial assets, while Hong Kong has previously explored fund and bond tokenization, but currently the most attention is on the tokenization of non-financial assets such as renewable energy and agricultural products. Although these explorations contribute to the long-term development of the tokenization ecosystem, it is difficult to establish a market advantage in the short term.

Hong Kong should focus in the short term on standardized financial assets that are most suitable for tokenization, and fully leverage its geographical and institutional advantages as an international financial, trade, and shipping center. The emphasis should be on tokenization applications in trade and cross-border related scenarios, rapidly expanding the market size of RWA tokenization in Hong Kong.

Although technology is not the key factor determining the success or failure of tokenization, an open technology system is more conducive to innovative tokenization. Some overseas institutions choose private chains due to regulation, but more financial and technological giants are embracing public chains. Public chains significantly outperform other technological systems in terms of global liquidity and openness, and have become the preferred platform for most tokenized bonds and funds. In terms of security, thanks to the development of data openness and on-chain analysis technology, asset tracking and auditing on public chains are becoming easier. Moreover, since most tokenized assets are held off-chain, the actual risks are primarily concentrated off-chain, while on-chain mainly ensures business compliance. Therefore, under the premise of compliance, Hong Kong should more actively explore tokenization applications and innovations on public chains, gradually making it a key direction for tokenization innovation.

Conclusion

RWA tokenization, as a product of the integration of two different financial systems, ideally aims to accelerate the migration of real assets onto the chain while ensuring that their value is not confined to the chain, ultimately serving and reflecting reality. Faced with the proactive actions of U.S. financial institutions in the field of tokenization, the time window for Hong Kong is limited. If Hong Kong can leverage its institutional and market advantages to accelerate the embrace of innovation, exploring a balance between regulatory compliance while providing traditional institutions with more room for innovation, and relying on the trillion assets support that the mainland can provide, Hong Kong will undoubtedly have an absolute advantage in the field of tokenization, with a broad future ahead. Research institutions have estimated that the potential asset scale for tokenization in Hong Kong has reached as high as 36 trillion Hong Kong dollars.

We look forward to Hong Kong demonstrating strong "acceleration" in the RWA field in 2025.