The first tokenized fund for retail clients in the Asia-Pacific region was born in Hong Kong

Recently, a product named "Hong Kong Dollar Digital Currency Fund" has been approved by the Hong Kong Securities and Futures Commission, becoming the first tokenized fund in the Asia-Pacific region aimed at ordinary investors. The fund is scheduled to officially launch on February 28, 2025, marking an important breakthrough in the transition of tokenized assets from the institutional exclusive domain to the mass market.

Tokenization funds convert fund shares into digital tokens on the blockchain. Compared to traditional funds, tokenization funds are innovative in ownership attribution, information transparency, and trading models. This new type of fund "chains" fund shares as underlying assets, using digital tokens to represent ownership, with each token representing one unit or share of the fund.

This new fund primarily invests in Hong Kong dollar short-term deposits and high-quality money market instruments, while also investing in other money market instruments and funds. The fund offers three share classes in Hong Kong dollars, US dollars, and Renminbi for investors to choose from.

In terms of technical implementation, the fund adopts a custody-based tokenization model, with a certain bank serving as the tokenization agent, digital platform operator, and token custodian, and the technical landing is completed through an internal authorized digital platform created by its subsidiary.

It is worth noting that retail investors can only subscribe for or redeem tokenized shares in the form of tokens through qualified distributors. Currently, there is only one publicly available qualified distributor, which is a licensed cryptocurrency trading platform in Hong Kong. At the same time, the fund is currently only open to investors in the Hong Kong region.

In terms of the subscription and redemption mechanism, investors need to subscribe to fund tokens through qualified distributors and pay in fiat currency. After receiving the application, the fund manager will issue corresponding tokenized shares and instruct the blockchain platform to mint tokens. Upon redemption, the fund manager will redeem the tokenized shares and destroy the corresponding tokens, and then pay the redemption proceeds to the distributors.

The launch of this tokenized fund marks a new stage in the application technology of the Web 3.0 era, providing opportunities for ordinary investors to participate. Although the current investment is in low-risk assets, this attempt focuses more on promoting innovation in real-world assets (RWA) and blockchain technology, with an emphasis on asset security and liquidity.

In the future, if this attempt is successful, more funds may adopt blockchain tokenization methods and a wider variety of investment strategies may emerge. For example, is it possible to achieve around-the-clock instant trading through digital coins? Will future tokenized funds be able to expand their investment scope and launch higher-yield products?

With the gradual maturation of compliant blockchain currency systems, asset tokenization, leveraging on-chain transactions and global liquidity advantages, may become an important force in reshaping the global asset management landscape.