RWA Tokenization: A Comparative Analysis of Dubai and Hong Kong and a Guide for Enterprise Selection

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This article provides a comprehensive comparative analysis of the regulatory frameworks, legal environments, tax policies, and operating costs of RWA (Real-World Asset) tokenization businesses in Dubai and Hong Kong. It details the legal requirements and compliance processes in both jurisdictions regarding virtual asset regulation, tokenized securities issuance, and investor protection, and offers location selection references for companies from multiple dimensions, including market access, operational efficiency, and cost control. By comparing the advantages and challenges of the two locations, this article aims to help RWA tokenization companies make the optimal jurisdiction choice based on their own business characteristics, target markets, and development strategies.

Mainly based on the law

Dubai : Virtual Assets Regulation 2023, Dubai International Financial Centre (DIFC) Data Protection Act, VARA Regulatory Framework

Hong Kong : Anti-Money Laundering and Counter-Terrorist Financing Ordinance (Chapter 615), Securities and Futures Ordinance (SFC), Virtual Asset Service Provider Regime 2022, and Guidance Applicable to Operators of Virtual Asset Trading Platforms Licensed by the SFC.

Major regulatory agencies

Dubai :

Virtual Assets Regulatory Authority (VARA)

Dubai Financial Services Authority (DFSA)

Dubai Department of Economic Development (DED)

Hongkong :

Securities and Futures Commission (SFC)

The Hong Kong Monetary Authority (HKMA)

Financial Services and the Treasury Bureau (FSTB)

The tokenization of real-world assets (RWAs) is reshaping the global financial market landscape. For companies intending to tokenize their assets, choosing the right jurisdiction is crucial. Dubai and Hong Kong, as two major Asian financial centers, are actively promoting RWA tokenization, but significant differences exist between the two in their legal frameworks, regulatory philosophies, and market positioning.

I. Fundamental Differences Between Regulatory Philosophy and Strategic Positioning

1.1 Dubai: A Technology-Driven Market Innovation Model

Regulatory Philosophy : Dubai adopts a regulatory strategy of "technology-driven and rapid iteration." The Virtual Asset Regulatory Authority (VARA), established by Law No. 4 of 2022, explicitly defines Asset Reference Virtual Assets (ARVAs) as a separate regulatory category, reflecting its positioning of RWA tokenization as an "emerging asset class."

Strategic Goals : Dubai's vision is to become a global hub for cryptocurrencies and digital assets, increasing the digital economy's contribution to GDP from 9.7% to 19.4% by 2031. This ambitious goal dictates the openness and flexibility of its regulatory framework.

Market characteristics: Retail investor participation is encouraged, but risk disclosure is emphasized; tokenized assets are allowed to be traded on licensed trading platforms in the secondary market; tax advantages include no personal income tax or capital gains tax , and VAT exemption for virtual asset transactions.

1.2 Hong Kong: A Robust Integration Path Led by Institutions

Regulatory Philosophy : Hong Kong adheres to the principle of "institutional priority, technological harmonization." The Securities and Futures Commission (SFC) has clearly stated that tokenized securities are essentially "digital shells of traditional securities" and are subject to the existing Securities and Futures Ordinance. This reflects the core concept of "one activity, one risk, one regulation."

Strategic Objective : Hong Kong positions RWA tokenization as an integral part of the evolution of its financial system and the enhancement of its competitiveness as a global financial center, rather than an isolated area of innovation. Its goal is to restructure the entire process of asset registration, issuance, custody, trading, settlement, and supervision through verifiable, auditable, and programmable distributed ledger technology (DLT).

Market characteristics: Prioritizes serving licensed institutions and mature asset classes; starts with low-risk assets such as fixed income and funds, and gradually expands; emphasizes interconnectivity with the mainland China market.

Summary of fundamental differences :

II. Legal Framework and Regulatory Structure

2.1 Dubai's dual-track regulatory system

VARA Regulatory Path (Dubai Mainland and Most Free Zones) :

Legal basis : Law No. 4 of 2022, the Virtual Asset Supervision Law, and the Virtual Asset Issuance Rules Manual updated in May 2025.

The legal definition of ARVAs includes tokens representing direct or indirect ownership of real-world assets, or rights to cash flows from those assets. This encompasses real estate tokens, bond and fixed-income instrument tokens, equity tokens, commodity tokens, and art and collectible tokens.

Licensing Requirements : ARVAs are classified as Category 1 Virtual Asset Issuances and must obtain a full VARA license before issuance. This is the highest level of regulatory requirement, with no exemptions or simplified procedures.

Ongoing obligations include: preparing and updating formal white papers and risk disclosure statements, meeting capital adequacy and corporate governance requirements, submitting compliance reports to VARA regularly, accepting on-site and off-site inspections, and appointing external auditors.

DFSA Regulatory Path (DIFC Free Zone) :

Legal Basis : The Dubai International Financial Centre (DIFC) has an independent legal system and is regulated by the Dubai Financial Services Authority (DFSA).

Innovation Test License (ITL) : DFSA provides a regulatory sandbox that allows companies to test tokenized business models in a controlled environment.

Transition Mechanism : Successful sandbox participants who demonstrate governance and risk control capabilities can transition to a full DFSA license.

Applicable scenarios : Suitable for traditional financial institutions and enterprises that wish to operate in an international financial center environment.

2.2 Hong Kong's Unified Regulatory Framework

Legal Basis : The Securities and Futures Ordinance (SFO) is the cornerstone of Hong Kong's financial regulation, and tokenized securities are subject to the same legal constraints as traditional securities.

SFC's core stance : Tokenized securities are viewed as digital representations of securities, not exceptional assets; governance logic remains embedded within the traditional rule-of-law framework, with technology serving only as a means to enhance trust and transparency; the regulatory focus has shifted from risk control to institutional integration, now encompassing issuance, minting and redemption, custody, registration, and disclosure.

Regulatory Cycle Guidance : SFC issued several notices clarifying regulatory requirements for tokenization activities: November 2023 notice: reiterated that traditional securities regulations are the baseline, and focused on new risks introduced by tokenization (such as ownership transfer records and technological risks); authorization conditions for tokenized investment products; and guidelines for intermediaries engaged in tokenized securities-related activities.

Licensing requirements : First, VATP providers offering security token trading must obtain both a Type 1 (Securities Trading) and a Type 7 (Automated Trading Services) license; second, providers offering non-security token trading must obtain a Virtual Asset Services license under AMLO.

Stablecoin regulation : The Stablecoin Ordinance, which came into effect on August 1, 2025, requires issuers of fiat-backed stablecoins to obtain a license from the Hong Kong Monetary Authority (HKMA) and to implement a three-tier framework of full asset backing, on-chain issuance and redemption, and technical auditability.

Comparative analysis :

III. Asset Issuance: Process, Requirements, and Costs

3.1 Dubai Issuance Process

Category 1 VARA License Application :

Preliminary preparation (6-9 months) :

1. Business plan and feasibility study

2. Legal and technical architecture design (including SPV structure)

3. Compliance framework development (AML/KYC procedures, internal control policies)

4. Capital and human resource preparation

A formal application requires: submitting a license application to VARA; providing complete corporate governance documentation; demonstrating technical and risk management capabilities; and paying the application fee.

White Paper and Risk Disclosure : Detailed description of tokenized assets, nature and value of underlying assets, rights and obligations of token holders, risk factors, issuer information, technical architecture and smart contract details.

Ongoing compliance costs include: quarterly and annual compliance reports, external auditor fees, white paper updates and maintenance, and cooperation with VARA on-site inspections.

SPV Issuance Model :

1. Putting assets into an SPV

2. SPVs issue tokens representing economic rights.

3. The tokens are issued through the licensed VARA platform.

4. Smart contract execution compliance logic

Advantages : Risk isolation, clear legal structure, tax optimization, bankruptcy protection

3.2 Issuance Path in Hong Kong

Applications required by traditional markets :

Public Offering : If it meets the definition of a security under the Securities and Futures Ordinance, it must comply with the prospectus system under the Companies (Winding Up and Miscellaneous Provisions) Ordinance; the SFO Part IV investment offer system; full disclosure and fair treatment of investors.

Private placements : Exemptions may apply, but basic investor protection requirements still need to be met.

Tokenized government bonds first :

Project Genesis (2021) : Concept Test Tokenized Green Bonds

Project Evergreen (2022) : Review of the financial infrastructure, legal and regulatory environment for the use of DLT throughout its entire lifecycle.

HKMA Releases "Hong Kong Bond Tokenization" Report (2023) : Providing Market Participants with a Blueprint for Design, Legal Framework, and Operational Workflow

Actual issuance examples include the world's first tokenized government green bond in February 2023 and the world's first multi-currency digital bond in February 2024.

Digital Bond Grant Scheme : HKMA provides grants of up to HK$2.5 million per eligible issuance to reduce issuance costs.

Funding conditions : The basic requirement (HK$1.25 million) is that the DLT platform or team issued in Hong Kong and operated by CMU has substantial Hong Kong business; the full funding (HK$2.5 million) requires additional conditions such as a non-affiliated platform, a minimum scale of HK$1 billion, at least 5 non-affiliated investors, and listing on the Hong Kong Stock Exchange or a licensed VATP.

SFC Authorized Investment Product Tokenization : SFC sets conditions for the tokenization of authorized funds, requiring proof that the tokenized version is as secure and robust as the traditional version; a robust risk management system; and compliance with custody requirements.

Cost Comparison :

In terms of issuance cycle, Dubai typically takes 6-12 months (depending on the level of preparation); Hong Kong usually takes 6-18 months (depending on whether SFC authorization is required and the issuance size).

3.3 Recommendations for Enterprise Selection

The reasons for choosing Dubai include: a desire for rapid market entry, testing of innovative business models, targeting the global retail market, particularly the Middle East and Asia, seeking tax optimization, asset class diversification (including emerging asset classes), and a preference for an independent regulatory framework to avoid complex ties with traditional securities laws.

Situations where Hong Kong is chosen: prioritizing service to institutional investors or high-net-worth clients, asset classes consisting of mature financial products (bonds, funds, etc.), a desire to leverage connectivity with the mainland China market, a focus on the stability and predictability of the regulatory framework, the ability to utilize government-funded programs to reduce costs (such as digital bonds), and a traditional financial background with familiarity with the SFO framework.

IV. Trading and Secondary Markets

4.1 Dubai's Trading Ecosystem

Licensed Trading Platforms : Only VARA-licensed brokers and exchanges can provide ARVAs secondary market trading services.

Market infrastructure : Order matching and settlement services, custody service providers, and market makers provide liquidity and clearing and settlement infrastructure.

Regarding investor access: all participants must pass KYC/AML verification; the platform can set different access thresholds for different investor categories; and transaction limits may vary depending on the investor category.

Liquidity characteristics : The market is relatively new, liquidity is under construction, retail investor participation is high, and 24/7 trading is possible.

4.2 Hong Kong's Trading Mechanism

Traditional securities trading rules apply : Trading of tokenized securities must comply with the same rules as traditional securities, including prohibitions on market manipulation, insider trading regulations, information disclosure requirements, and settlement systems.

Innovative trading infrastructure :

Shared Order Book : Under development, designed to connect different platforms and provide cross-platform liquidity.

Wholesale Central Bank Digital Currency (wCBDC) Integration with Tokenized Deposits : Initiatives such as Project Ensemble are testing the technical interoperability of tokenized assets, tokenized deposits, and wCBDC, providing a reliable foundation for settlement and monitoring.

Instant settlement : Utilizing DLT and smart contracts to achieve near-instant transaction settlement, shortening the settlement chain and reducing counterparty risk.

The regulatory oversight layer includes : SFC requiring institutions to implement on-chain asset segregation, key tiering, and access control; enhancing AML capabilities through on-chain monitoring and suspicious address detection; and building cross-institutional analytics and direct blockchain reporting systems to strengthen real-time auditing and anomaly detection.

Liquidity characteristics : dominated by institutional investors, with relatively concentrated liquidity; interconnected with traditional financial markets, attracting a large amount of funds; trading hours may be synchronized with traditional markets.

Comparative analysis :

V. Investor Protection and Compliance Requirements

5.1 Dubai's Investor Protection Framework

Risk Disclosure Obligations : Issuers must provide appropriate risk disclaimers and disclosures, particularly for retail investors. These disclosures should include detailed descriptions of investment risks, warnings about liquidity risks, technological risks (smart contracts, blockchain), regulatory and legal risks, and market risks.

Marketing restrictions : Marketing materials for retail investors must be clear, fair and non-misleading, include all important risk factors, avoid exaggerating returns or minimizing risks, and comply with VARA marketing and promotion rules.

AML/ KYC requirements include verifying investor identity, monitoring trading activity, reporting suspicious activity, and maintaining records of customer due diligence.

Requirements for custody and customer asset protection include: customer asset segregation, meaning the platform must separate customer assets from its own assets; proof-of-reserve checks, meaning regular audits to ensure that token holdings match customer rights; multi-signature control and wallet whitelisting.

Complaints and Dispute Resolution : VARA has established a complaint handling mechanism, but the specific implementation procedures are still being improved.

5.2 Hong Kong's investor protection system

Fiduciary Duty : Licensed intermediaries have a fiduciary duty to their clients and must act in the best interests of their clients.

Suitability Assessment : Before selling tokenized products, it is necessary to assess whether the product is suitable for the investor's risk tolerance and financial situation.

Client Asset Protection : SFC stipulates strict client asset segregation and protection measures, including independent custody, regular reconciliation, and client fund trust accounts.

Information disclosure includes : continuous disclosure obligations, timely updates of important information, transparent cost structure, and disclosure of conflicts of interest.

Unified AML/ KYC Standards : Tokenized assets are subject to the same KYC, AML, sanctions screening, and customer asset protection systems as traditional securities.

Dispute resolution avenues include : the SFC complaint handling mechanism, the Financial Dispute Resolution Centre, and court proceedings (Hong Kong has a mature common law system).

Accountability and traceability requirements : verifiable records should be left at each stage; the process should be traceable, the execution should be reproducible, and the actions should be accountable; supervision should be able to intervene in real time, and audits should be able to reproduce the entire process.

Comparative analysis :

VI. Cross-border Interconnection and Internationalization

6.1 Dubai's Global Connectivity

Strategic positioning : Dubai positions itself as a global digital asset hub connecting the Middle East, Africa and Asia.

Its cross-border advantages include a superior geographical location connecting the three continents of Europe, Asia, and Africa; free port and free zone policies, allowing free capital flow; no foreign exchange controls; and support for multiple currencies (although primarily the US dollar).

In terms of international cooperation: coordinating with other Gulf Cooperation Council (GCC) countries and participating in international regulatory dialogues (such as FSB and IOSCO); attracting global virtual asset service providers to establish regional headquarters.

However, there are some challenges : including the lack of regulatory mutual recognition with major financial centers such as the United States and the European Union; and the fact that cross-border law enforcement cooperation mechanisms are still under development.

6.2 Hong Kong's role as a bridge

Strategic positioning : Hong Kong is positioned as a financial bridge "connecting the mainland and linking the world", serving as an institutional interface between the mainland of China and the international market.

Mainland interconnectivity : mature mechanisms such as Shanghai-Hong Kong Stock Connect, Shenzhen-Hong Kong Stock Connect, and Bond Connect; exploring the integration of tokenization into the existing interconnectivity framework; and providing a testing ground for the institutional interoperability between the mainland financial system and the international system.

Cross-border payments and trade finance include : testing the integration of tokenized deposits with wCBDC on multiple CBDC platforms such as mBridge; Project Ensemble advancing cross-border settlement processes; and shortening the settlement chain and reducing counterparty risk through a unified ledger, liquidity locking, and atomic settlement.

In terms of international standards participation: We have participated in shaping global regulatory frameworks (such as IOSCO and FSB); our common law system is familiar to international investors; and we have mature regulatory cooperation with major global financial centers.

Competitive advantages include : a key node in the internationalization of the RMB; a hub for regional payment connectivity systems; and providing technical and institutional preparations for policy-driven capital flows and cross-border settlement mechanisms.

Comparative analysis :

VII. Technology and Innovation Ecosystem

7.1 Dubai's Technology Ecosystem

The blockchain infrastructure supports multiple blockchain platforms (Ethereum, Polygon, etc.), encourages innovation and experimentation, and the government actively promotes the "Dubai Blockchain Strategy 2021".

Technical standards include VARA's requirements for the technical architecture, but it is relatively flexible, emphasizes smart contract security auditing, and supports emerging technologies (such as zero-knowledge proofs and Layer 2).

In terms of innovation incentives, the DFSA Sandbox provides a testing environment to attract global blockchain and fintech startups, with government funding and policy support.

In terms of technical talent, we actively attract international talent, establish blockchain and fintech training programs, and collaborate with global technology companies.

7.2 Hong Kong's Technological Path

Controlled, reversible, and auditable : Hong Kong’s technological approach emphasizes controllability rather than disintermediation.

The synergy between technology and regulation includes the co-evolution of on-chain identity, AI-driven risk control, trusted hardware, cross-chain proofs, and regulatory processes; technology serves as a component of the institutional implementation layer, rather than attempting to replace the system.

Regarding DLT as a trusted execution engine, regulators have clearly stated that DLT is not a disintermediation tool, but rather a "trusted execution engine" for custody and regulation. In open blockchain environments, anonymity and irreversibility bring additional risks, thus access control, account freezing, identity verification, and custody arrangements serve as institutional safety valves.

Technology maturity requirements : SFC requires intermediaries to have sufficient technical and risk management capabilities; adopt a risk-based approach for DLT network architectures (private license, public license, and licenseless); and smart contracts must undergo independent security audits, including manual overriding and rollback mechanisms.

Government-led innovation : Project Genesis and Project Evergreen are led by the HKMA; the Digital Bond Funding Scheme encourages market participation; and the public sector's exemplary role in technology adoption is emphasized.

Comparative analysis :

VIII. Cost-Benefit Analysis

8.1 Direct Cost Comparison

Setup costs :

Costs fluctuate significantly: All the costs mentioned above are range estimates, and actual expenditures will vary significantly depending on project size, asset type, compliance complexity, the selected service provider (law firm/technology company), and the latest regulatory requirements.

Dubai VARA Fees Not Publicly Disclosed: VARA (Virtual Asset Regulatory Authority) has not officially announced license fees. The estimated $5.1 million or more is based on speculation from industry advisors, and the actual amount may be higher or lower.

The Hong Kong SFC license fee is an application fee: the SFC fees in the table refer to the application fee, and an annual fee is required after approval (see details).

Other hidden costs: In addition to the items listed in the table, operating costs such as bank account opening, auditing, annual tax filing, office address, and staff salaries should also be considered.

8.2 Implicit Costs and Opportunity Costs

Dubai's hidden costs include: a novel regulatory framework requiring further legal exploration and trial-and-error costs; market education costs, as investors have a low level of awareness of emerging markets; liquidity costs, as building liquidity in the secondary market requires time and resources; and potential regulatory adjustment risks, as a rapidly evolving regulatory environment may lead to increased compliance costs.

Hong Kong's hidden costs include compliance complexity, requiring adherence to established traditional securities regulatory requirements and a more complex compliance process; time costs, as regulatory approvals can be slow, especially for products requiring SFC authorization; and high operating costs, as Hong Kong, as a high-cost city, has significantly higher human and office costs than Dubai.

Opportunity cost :

The opportunities forgone by choosing Dubai include the potential loss of direct access to the Chinese mainland market, the inability to utilize mature connectivity mechanisms, and the potential loss of opportunities for in-depth cooperation with mainstream financial institutions (Hong Kong has a more developed traditional financial network).

Choosing Hong Kong means forgoing opportunities such as the potential loss of rapid expansion in the retail market, the inability to enjoy Dubai's tax advantages (particularly personal income tax and capital gains tax exemptions), and the potential loss of flexibility in rapid innovation in emerging markets.

8.3 Expected Return on Investment

In terms of investment returns, Dubai offers advantages such as rapid market entry (launch within 6-9 months), lower tax costs that improve net profit margins, high participation in the retail market, a large potential user base, and a flexible regulatory environment that supports rapid product iteration.

Risk factors include low market maturity, the time required to build liquidity, the ongoing evolution of the regulatory framework which may face policy adjustments, and the time required to build trust among international investors in emerging markets.

In terms of investment returns, Hong Kong's advantages include a mature network of institutional investors, the potential for large capital inflows, interconnectivity with the mainland market, a huge potential market, a stable regulatory environment that reduces policy risks, and government subsidies (such as digital bond subsidies) that lower initial costs.

Risk factors include higher setup and operating costs that erode profits, regulatory approval times that may extend product launch times, and high barriers to entry in the retail market that limit the potential customer base.

Break-even analysis :

Note: The above data are estimates and actual figures may vary depending on company size, business model, and market performance.

IX. Decision-Making Framework: How Should Enterprises Choose?

9.1 Selection Matrix Based on Enterprise Characteristics

Startups and fintech companies that want to quickly enter the market and test their business models; whose target customers are primarily retail investors; who seek tax optimization and lower operating costs; who have highly innovative products and require a flexible regulatory environment; and whose teams have backgrounds in blockchain and digital assets should choose Dubai.

If your goal is to serve institutional clients or high-net-worth individuals; you wish to leverage government subsidies to reduce initial costs (such as digital bonds); your products are based on mature financial instruments (bonds, funds); you plan to collaborate with traditional financial institutions; and you value regulatory stability and long-term predictability, then Hong Kong is the better choice.

Traditional financial institutions that wish to establish digital asset businesses in regional markets, seek tax advantages and regulatory flexibility, aim to expand into emerging markets and retail clients, and are willing to explore innovation under the new regulatory framework choose Dubai.

If you already have an office in Hong Kong and wish to expand your business lines; wish to leverage your existing SFC license to conduct tokenization business; prioritize connectivity with the mainland market; value the maturity and international recognition of the regulatory framework; and have a client base primarily composed of institutions and high-net-worth individuals, then Hong Kong is the best choice.

Asset holders (corporations, governments) who have diversified asset types (real estate, commodities, art, etc.), wish to raise funds from global retail investors, seek rapid financing and lower issuance costs, and have high requirements for cross-border capital flows, choose Dubai.

If the assets are traditional financial products (government bonds, corporate bonds); the target investors are institutional and professional investors; the investor wants to utilize mature financial infrastructure; the investor can obtain government funding (such as digital bond funding); and the investor values brand reputation and international recognition, then Hong Kong is the preferred choice.

9.2 Multidimensional Scoring Model

The following scoring model helps companies quantitatively assess the suitability between two locations (1-10 points, 10 being the best):

Note: Weights can be adjusted according to the specific needs of the enterprise.

Analysis : The overall scores for both locations are similar, and companies should adjust the weighting according to their priorities. For example, if tax incentives are the highest priority, Dubai has a clear advantage; if access to the mainland market is important, Hong Kong is a better choice.

9.3 Hybrid Strategy: Dual-site Layout

Why consider a dual-location strategy? Reasons include diversifying regulatory risks, covering different investor groups (Dubai retail + Hong Kong institutions), leveraging respective tax and market advantages, and enhancing the brand's international image.

Implementation path :

Phase 1: Early Market Selection (12-18 months)

Select the first market based on initial resources and target customers, complete the license application and platform construction, launch the first batch of tokenized products, and accumulate operational experience and market data.

Phase Two: Second Market Entry (18-24 months)

Leveraging the success and compliance experience of the first market, apply for licenses in a second jurisdiction, adapt products to local regulatory requirements, and establish a cross-border operations and compliance team.

Phase Three: Dual-Location Collaboration (24 Months+)

Product complementarity: Dubai focuses on retail and emerging assets, while Hong Kong focuses on institutional and traditional financial products; customer segmentation: guiding investors to appropriate platforms based on their type and needs; liquidity sharing: exploring cross-platform liquidity integration; compliance coordination: establishing a unified risk management and compliance framework.

In terms of cost considerations, the initial investment for a dual-location layout increases by 50-80%, and operating costs increase by 40-60% (which can be partially offset by economies of scale), but potential market coverage and revenue can increase by 100-200%.

In terms of risk management, the complexity of regulatory coordination has increased, requiring stronger technology and compliance teams, and cross-border fund management and tax planning have become more complicated.

X. Future Outlook and Strategic Recommendations

10.1 Forecast of Regulatory Trends in Both Regions

Dubai's development direction :

In the short term (2026-2027), VARA will further refine the regulatory details of ARVAs, release more industry guidance and best practices, increase cooperation and mutual recognition with international regulatory agencies, and strengthen regulatory coordination among GCC countries such as Saudi Arabia and the UAE.

In the medium term (2028-2030), RWA aims to establish itself as a regional tokenization hub, achieve regulatory mutual recognition with major financial centers (Singapore and Switzerland), mature the retail market, significantly improve liquidity, and potentially introduce more granular investor classification and protection mechanisms.

Hong Kong's development direction :

In the short term (2026-2027), the SFC will further clarify the specific regulatory requirements for tokenized securities, the digital bond funding scheme will attract more issuers, initiatives such as Project Ensemble will launch actual products, and pilot programs for interconnectivity between tokenized assets and the mainland will be explored.

In the medium term (2028-2030) , a mature tokenized securities market infrastructure will be established, and the interconnection mechanism with the mainland market will be officially operational, making it a key hub for the internationalization of RMB and the cross-border use of digital RMB. Regulation will gradually evolve from "institutional priority" to "prudent opening of retail".

10.2 Strategic Recommendations for Enterprises

Recommendation 1: Plan ahead early to gain a first-mover advantage

The RWA tokenization market is still in its early stages, and early adopters will gain significant advantages, including building brand awareness and market trust, participating in the process of forming regulatory rules, accumulating valuable compliance and operational experience, and securing high-quality assets and investor resources.

Recommendation 2: Choose a regulatory path that suits your needs.

To avoid blindly following trends, companies should base their decisions on their core competitiveness and resources, target customer groups and market positioning, product characteristics and level of innovation, risk tolerance and compliance capabilities.

Recommendation 3: Emphasize compliance and establish long-term advantages

Short-term costs may be high, but long-term returns are significant: compliance is the foundation for gaining investor trust, a mature compliance system is the guarantee for sustainable development, regulatory relationships are the core competitiveness of enterprises, and early planning can avoid passive rectification in the future.

Recommendation 4: Actively participate in ecological construction

Going it alone is unlikely to succeed. It is essential to maintain active communication with regulatory agencies, join industry associations and standards-setting organizations, establish partnerships with technology providers, custodians, and auditing firms, and participate in market education and investor protection initiatives.

Recommendation 5: Remain flexible and be prepared to adjust.

As the regulatory environment and market conditions continue to evolve, it is essential to establish flexible business models and technology architectures, reserve resources to cope with potential regulatory changes, pay attention to global regulatory trends and best practices, and consider cross-jurisdictional expansion when necessary.

in conclusion

Both Dubai and Hong Kong offer attractive legal frameworks and market environments for RWA tokenization, but they differ significantly in regulatory philosophy, market positioning, and strategic advantages.

Dubai's core strengths include rapid market access and a flexible regulatory environment, significant tax advantages, a highly open retail market, and an innovation-friendly ecosystem. However, Dubai faces challenges such as an evolving regulatory framework with inherent uncertainties, relatively low market maturity, the time required to build liquidity, and the lack of mutual recognition mechanisms with major financial centers.

Hong Kong's core strengths include a mature and stable regulatory framework; unique connectivity with the mainland China market; a deep network of institutional investors; and government subsidies that reduce issuance costs. However, Hong Kong faces challenges such as higher setup and operating costs; high barriers to entry in the retail market; and relatively slow regulatory approval processes.

In terms of final recommendations, Dubai is a better choice for companies seeking rapid innovation, targeting the retail market, and prioritizing tax optimization . Hong Kong is a better platform for companies that value regulatory stability, serve institutional clients, and wish to access the mainland market . For large enterprises with ample resources and a global expansion strategy , a dual-location strategy can fully leverage the advantages of both locations, maximizing market coverage and risk diversification.

Regardless of the market chosen, companies should thoroughly understand local regulatory requirements and establish a sound compliance system; select appropriate asset classes and investor groups; invest in technological infrastructure and security; maintain active communication with regulatory agencies; and pay attention to global regulatory trends and be prepared to adapt flexibly.

RWA tokenization represents a significant evolution in the financial market, with Dubai and Hong Kong providing fertile ground for this innovation. Enterprises should make informed choices based on their own characteristics and strategic objectives, seizing this historic opportunity while adhering to compliance.

References

1. Hong Kong laws (Securities and Futures Ordinance)

2. Hong Kong Monetary Authority

3. DIFC Legal Portal

4. InvestHK

5. Central Bank of the United Arab Emirates

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8. Tran, L. (2025, November 20). Six leading jurisdictions for tokenized real world assets in 2025. Investax.