The first retail tokenized fund in the Asia-Pacific launched in Hong Kong: a technological revolution in asset management

On February 13, 2025, a well-known fund company announced that its Hong Kong dollar digital currency fund was approved by the Securities and Futures Commission (SFC) of Hong Kong, becoming the first tokenized fund for retail investors in the Asia-Pacific region, officially listing on February 28. This marks a key breakthrough in the transition of tokenized assets from being exclusive to institutions to entering the mass market.

Tokenization funds are funds whose shares are converted into digital tokens on the blockchain. Although they are essentially similar to traditional funds in terms of investment, tokenization funds are innovative in ownership attribution, information transparency, and trading models.

This newly launched Hong Kong dollar digital currency fund primarily invests in Hong Kong dollar short-term deposits and high-quality money market instruments, while offering three share classes in Hong Kong dollar, US dollar, and Renminbi. As a tokenized fund, it adopts a custodial tokenization model, with a certain bank serving as the tokenization agent, digital platform operator, and token custodian.

It is worth noting that retail investors can only subscribe to or redeem tokenized shares in token form through qualified distributors. Currently, only one licensed cryptocurrency exchange has been designated as a qualified distributor. Furthermore, the fund is only available to investors in the Hong Kong region.

The tokenization fund's subscription and redemption mechanism differs from that of traditional funds. When subscribing, investors purchase tokens through qualified distributors, who notify the fund manager of the subscription request. The fund manager then instructs the digital platform to mint the tokens. When redeeming, the process is carried out in reverse, ultimately destroying the corresponding tokens and paying out the redemption proceeds.

Other tokenized funds around the world also have their own unique subscription and redemption mechanisms. For example, a tokenized fund launched by a U.S. fund company uses a USD/USDC subscription mechanism and implements automated conversion through smart contracts.

As the first retail tokenization fund approved in the Asia-Pacific region, this initiative marks the opening of Web 3.0 era application technologies to retail investors. Although the current investment in underlying assets is a low-risk money market fund, this attempt focuses more on advancing real-world assets (RWA) and the innovation of blockchain technology.

In the future, if this attempt is successful, more funds may adopt blockchain tokenization methods. As the compliant blockchain currency system gradually matures, asset tokenization, with its advantages of on-chain transactions and global liquidity, could become the core driving force in reshaping the global asset management landscape.