How Korean RWA Assets Reach Global Investors Through Hong Kong

Author: Tiger Research

Compiled by Deep潮 TechFlow

DeepChaio Summary: The market size of real-world asset tokenization surged 26 times in one year, but the true test lies in whether issuance, sales, and redemption can form a closed loop. This article breaks down the complete pathway through which Korean assets reach overseas institutional investors via Hong Kong, offering a rare, practical, hands-on analysis for those focused on compliant structures and cross-border distribution.

The tokenization market for real-world assets is growing rapidly. The real question is: how are tokenized products actually issued, sold, and settled in practice?

In the model described herein, an offshore entity issues products backed by underlying assets, and a licensed Hong Kong intermediary sells these products to overseas professional investors. Investors are purchasing the issuer’s product, not the underlying assets themselves.

Being able to sell does not mean being able to repay. The issuer must have enforceable rights over the asset's cash flow, and funds must be available in a timely manner to meet their obligations to investors.

The real test comes after the first issuance: Can the same architecture support another product? A sustainable market requires a steady supply of assets and investors willing to repurchase.

According to data from RWA.xyz, the real-world asset tokenization market has grown from approximately $1.5 billion in August 2023 to about $38.86 billion as of September 13, 2026, representing a roughly 26-fold increase. An increasing variety of assets are being tokenized, and governments worldwide are establishing regulations for issuance and sales.

The growth is already evident. The real question now is: how to turn an asset into a product that investors can actually buy and ultimately get their money back from.

Different jurisdictions are introducing regulations for tokenized assets, but the requirements and timelines vary. As a result, where a product is launched directly impacts how quickly it can enter the market.

Hong Kong has a mature securities regulatory framework, international investor access, and experience in issuing tokenized bonds, including government bonds. Its licensing system and investor protection requirements provide issuers and intermediaries with a structured framework for bringing products to market.

Hong Kong has established regulations for key aspects of tokenization, including securities licensing, regulation of virtual asset service providers, and technical safeguards. This clarity helps institutions plan issuances and enables institutional investors to assess their level of protection with confidence. It is also one of the reasons Hong Kong is gaining attention as a hub for the issuance and distribution of tokenized real-world assets.

How do assets from another country reach overseas investors through Hong Kong? Let’s use Korean assets as an example to break down the entire process.

The diagram is divided into left and right sides. The left side represents Korea, where the underlying assets originate. The right side represents Hong Kong and the British Virgin Islands, where the products are issued and sold.

The black arrow represents the product structure.

South Korean securities firms: Provide access to purchase underlying assets such as listed stocks, fund shares, and notes.

British Virgin Islands special purpose company: Purchase and hold these assets through a broker account of the Hong Kong entity of a Korean securities firm, and issue notes backed by these assets.

Tokenization Platform: Create tokens representing promissory notes issued by a special-purpose company, and record their issuance and allocation.

Distributor: Sells products to overseas professional investors through licensed intermediaries and compliant trading venues.

The orange arrow represents the flow of subscription funds.

Overseas professional investors subscribe using fiat currency or stablecoins. Funds reach the special purpose company via an intermediary. If subscribed with stablecoins, the special purpose company converts them into fiat currency through a centralized exchange. The funds are then transferred through the Hong Kong entity to the Korean securities firm, which completes the purchase of the underlying assets.

The Hong Kong fintech company Finloop refers to this model as the "dual-engine model," with one end responsible for asset supply and the other for issuance and distribution. Three points are most critical.

The source of assets can be replaced. Securities firms from other countries and their Hong Kong entities can substitute the position of Korean institutions, enabling Hong Kong to serve as a distribution channel for asset-backed products from multiple markets.

The special purpose vehicle is at the center. It receives subscription funds, purchases or holds assets, and issues notes. Investors assert their rights against the special purpose vehicle based on the product terms, making the special purpose vehicle’s rights to the assets and its ability to pass through returns critical.

Special purpose vehicles connect on-chain payments with traditional finance. Investors can subscribe to and hold tokenized notes using stablecoins, while the underlying assets are purchased and held through broker-dealer and custody arrangements.

This architecture can only function when all components are in place. It requires suitable underlying assets, a robust issuance structure, and a compliant pathway to investors.

3.1. How to Choose Underlying Assets

Before issuing a product, the special-purpose company must have clear legal rights to the funds generated by the underlying assets.

For government bonds or fund shares, the issue may be whether a special-purpose company can directly purchase and hold them. For export receivables or music royalties, the situation is more complex: the right to collect future payments may need to be transferred to the special-purpose company, or the asset holder must have binding obligations to collect the payments and remit them to the special-purpose company.

In either case, the contract must clearly specify who is entitled to receive cash, who is responsible for collecting payments, and how the funds will reach the special-purpose company. Without a clear repayment pathway, the assets cannot reliably support payouts to investors.

3.2. What Exactly Do Offshore Issuers Create?

In this model, the core of tokenization rests with the special-purpose company. Even if the underlying assets are selected in Korea, an independent entity is still required to issue tokens and distribute proceeds to overseas investors.

Finloop’s dual-engine model assigns this role to a special-purpose company registered in the British Virgin Islands, serving as the link between Korean asset holders and overseas investors.

A special purpose company issues tokenized notes or securities backed by the revenue rights of Korean assets. Therefore, overseas investors purchase financial products issued by the special purpose company, not the Korean government bonds or export receivables themselves. Under the terms of the product, the special purpose company pays returns to investors and repays the principal at maturity.

For this structure to operate reliably, the timing of cash inflows to the special-purpose company must align with its payment obligations to investors. The issuer must first determine the repayment timing for each underlying asset: interest and principal on government bonds, dividends and redemption proceeds from funds, or settlement payments from export receivables and royalties.

If investors require repayment before the SPV receives funds, the product may face liquidity shortages or delayed repayments.

Establishing an SPV offshore does not automatically grant it rights to cash flows generated by Korean assets. Contracts must clearly specify the SPV’s legal rights to the underlying assets, who collects the cash, and who is responsible for transferring funds to the SPV. Meanwhile, the tokenization platform will transparently record the number of tokens issued, token holdings, and the number of tokens burned.

The core objective of the offshore issuance stage is to ensure that the SPV receives sufficient cash and that funds are received in a timely manner to fulfill payment obligations to investors.

3.3. How widely can the product circulate after being sold in Hong Kong?

Creating a product through an offshore SPV is only the first step. To sell to overseas investors, the issuer also needs a financial institution to handle distribution. Finloop proposes using a licensed Hong Kong intermediary that can review the product under Hong Kong securities regulations, offer it to professional investors, and reach investors outside Hong Kong.

Intermediaries review the terms and risks of SPV products and verify that each investor is eligible to purchase. If the offering is restricted to professional investors only, token transfers must also remain restricted after issuance. Therefore, the product terms limit transfers to buyers whose eligibility has been verified. This is Finloop’s envisioned structure for its private placement products; however, such restrictions do not apply to all tokenized securities in Hong Kong.

Finloop also proposes that products initially sold in Hong Kong be distributed through intermediaries and trading venues in other regions. However, the initial sale in Hong Kong does not automatically permit sales or trading elsewhere; the rules of each market must be evaluated separately. Investors wishing to sell before maturity will need a willing buyer and a defined method for determining price. Using the product as collateral requires an institution willing to accept it.

In this structure, Hong Kong provides the channel for the initial sale and investor eligibility verification. Sales and trading in other regions, as well as use as collateral, must be arranged separately.

Tokenized products may be successfully sold in Hong Kong yet still fail to make promised payments to investors. Cash flows generated by the underlying assets must reach investors through an offshore issuance vehicle (SPV). Three key risks could disrupt this cash flow.

Rights and collection arrangements are unclear: For assets such as export receivables, the contract must clearly specify where the buyer should make payments and who has the right to collect them. Unless the collection obligations and settlement procedures are legally binding, the funds generated by the asset may never reach the SPV.

There is a time lag between cash collection and repayment: if investors must be repaid before the underlying assets settle, the SPV may face liquidity shortages and delay repayments. When Korean won assets support U.S. dollar-denominated products, exchange rate fluctuations and currency conversion costs may also reduce returns.

Cross-border transfers and tax bottlenecks: Permitting Hong Kong intermediaries to sell this product does not resolve how funds will be transferred from Korean asset holders to the offshore SPV, nor how payments will be made to overseas investors. These transfers and tax procedures must be practically feasible.

This model ultimately depends on whether the cash generated by the Korean assets can be fully and timely transferred to overseas investors through the SPV as contractually promised.

Selling a product backed by Korean assets in Hong Kong is just the beginning. The initial issuance takes time: all parties must review the assets, finalize contracts, and determine how the product will be sold.

If they had to start from scratch for every new product launch, scaling the business would be difficult. Starting with the second issuance, they need to be able to reuse the structure established for the first transaction.

Export receivables settled in U.S. dollars provide a way to test the viability of this model. Issuers and intermediaries can apply the debtor assessment criteria and product disclosure methods developed for the first transaction to subsequent receivables, thereby reducing the design effort for each product. However, applying the same standards does not imply that the risk of each receivable is identical.

To determine whether this pattern can sustain a lasting market, focus on progress in three areas:

Does the time required for asset review decrease with each issuance?

Will existing investors return to purchase the new product?

Do asset holders have a reason to continuously supply assets?

With accumulated experience in export receivables, this model can be expanded to other Korean assets. Its success depends not only on a single issuance but also on the continuous supply of suitable assets by asset holders, investors’ willingness to reinvest, and intermediaries’ recognition of the value in bringing new products to market.