As a global financial center, Hong Kong has achieved much success in paving the framework for the Web3 and digital assets industry in the past year. The effort in connecting traditional finance with digital assets has been welcomed by broader market participants and one of the biggest developments has to do with the introduction of STO and RWA investing.
STO stands for Security Token Offerings and primarily focuses on assets traded by the traditional securities sector. The issuance and trading of STOs will be through blockchain technology, which represents underlying securities contracts commonly seen in traditional finance. On the other hand, Real World Assets (RWAs) aim to tokenize broader real-world assets with tangible value and will allow investors to buy real-world assets through blockchain technology.
Hong Kong is open to STO/RWA development and you don’t need to look further than the recent interview by Elizabeth Wong, head of the FinTech Unit of the Hong Kong Securities and Futures Commission (SFC) in which she indicated the STO/RWA may be available for retail investors.
Source: Technode Global