The booming tokenization scene in Asia is capturing the attention of international investors as capital begins to move eastward from the west, states Maarten Henskens, the head of protocol growth at Startale Group.
He remarks that Western institutions are establishing operations in the Asia-Pacific region not only to follow the capital but also to participate in the innovative crypto space.
Henskens highlights the unique but complementary strategies adopted by Japan and Hong Kong to promote the adoption of real-world assets (RWA). Japan’s regulatory framework has been proactive and futuristic, creating a solid base of institutional trust. “The security token issuance infrastructure of MUFG illustrates the maturing ecosystem,” he said.
Furthermore, Japan’s Payment Services Act (PSA) permits trusted stablecoins to maintain up to 50% of their reserves in low-risk government bonds and term deposits, showing a thoughtful approach to regulation. On the other hand, Hong Kong has moved rapidly by launching the Ensemble Sandbox, a swift-track regulatory innovation hub. “While Japan is focusing on long-term depth, Hong Kong is demonstrating how agility can bring experimentation to life,” Henskens observed.
The growing popularity of tokenized bonds and ETFs is crucial in attracting traditional investors to crypto markets. In Japan, real estate security tokens are opening previously exclusive markets to retail investors, sometimes even more than traditional J-REITs.
Tokenization simplifies fund administration and enhances transparency, enabling asset managers to interact directly with end-users. “This efficiency, coupled with increased transparency, could attract traditional investors who might otherwise not venture into the crypto space,” Henskens said.
He identifies cross-border interoperability as the next significant challenge. “Effortless and compliant transfer of tokenized assets across jurisdictions” will be vital for scaling adoption.
In Asia, this means connecting infrastructure across countries like Japan and Hong Kong, while globally, regulatory frameworks must accommodate the technical realities of tokenized finance, especially in terms of settlement, compliance, and custody.
Dubai is another Asian city making headway in tokenization. The city’s regulatory authorities have introduced forward-thinking frameworks that foster the issuance and trading of tokenized securities, attracting global investors and fintech firms.
In May, the Virtual Asset Regulatory Authority, Dubai’s crypto regulator, updated its guidelines to incorporate provisions for RWA tokenization. According to Lawyer Irina Heaver, these rules provide issuers and exchanges with a clear path to launch and trade tokenized real estate assets.
Last month, the Dubai Land Department, in association with VARA and top developers, successfully tokenized and sold two apartments, with the entire offering selling out within minutes. Buyers hailed from over 35 countries, with a notable 70% being first-time real estate investors in Dubai.
“We’re already witnessing a network effect: innovation in one jurisdiction triggers progress in another,” Henskens said. “Different regions may optimize for different outcomes, and that’s a strength, not a liability,” he concluded.
