APAC Leads RWA Tokenization: Regulatory Shifts & Market Growth

Asia Pacific Accelerates RWA Tokenization in 2025

APAC economies, including Singapore, Hong Kong, Australia, and Japan, are accelerating real-world asset (RWA) tokenization through regulatory reforms and live-market adoption.

Regulatory Transformation and Market Dynamics

Why Important: Tokenization streamlines issuance, settlement, and custody on a unified digital infrastructure, enhancing settlement finality and auditability. This results in reduced capital costs, improved custody transparency, and the potential for 24/7 secondary markets, benefiting issuers, investors, and intermediaries.

Tokenization also improves cross-border payments and trade finance by increasing speed and transparency. APAC’s diverse policies may broaden options for local currency issuance, including China’s RMB, while USD liquidity remains central. Multi-currency models offer new FX hedging and credit enhancement possibilities.

Latest Updates:

• Singapore: Expanding standardization and interoperability workstreams in fixed income, FX, and fund management under MAS Project Guardian.
• Hong Kong: Continuing multi-currency digital bond issuances and leveraging its Digital Bond Grant Scheme to attract private deals.
• Australia: Advancing Project Acacia under RBA–DFCRC, integrating live pilots and proofs of concept.
• Japan: Japan’s FSA continues to outline market development for STOs and digital securities through FSA speeches and published materials.

Common priorities across the board include “same risk, same rules” enforcement, ledger-to-ledger interoperability, KYC/suitability/reporting alignment, and central bank money availability. Individuals using DeFi must understand wallet connections, gas fees, and robust KYC procedures (Japanese residents must comply with domestic laws). Platforms like Codeum can help ensure the security and compliance of these DeFi interactions.

Interoperability and the East-West Finance System

Background Context: Bonds, especially US Treasuries, have driven the initial RWA adoption wave due to increased transparency and traceability. Singapore’s MAS Project Guardian hub facilitates public-private and cross-border collaboration. Hong Kong actively issues government digital bonds to foster market growth. Australia uses live pilots to address operational challenges, while Japan scales gradually using existing investor-protection frameworks.

“The outstanding amount of digital securities is now about 140 billion yen.” (Japan FSA – FIN/SUM 2025 keynote speech by Commissioner Ito)

Major Chinese financial institutions are also entering the $30 trillion RWA market. Increased RWA activity is also seen on XRPL and BNB Chain through tokenized treasuries and real estate. These trends indicate broader institutional involvement and the rise of multi-chain infrastructure beyond Ethereum.

Early pilot programs focused on redesigning operational and audit processes rather than immediate liquidity gains. National pilots have addressed instant settlement, asset-level title transfers, and smart contract governance, tackling back-end issues progressively.

Geopolitical implications: A “dual-rail” link between Eastern and Western financial systems could emerge as interoperability standards solidify. However, custody liability, compliance costs, and data sovereignty remain major hurdles.

Private sector participants, including asset managers, commercial banks, and infrastructure providers, are increasing their involvement. Tokenized US Treasuries, sovereign digital bonds, and tokenized funds are generating more use cases, making it crucial to bridge issuance–distribution–custody gaps via shared ledgers and API connections.

Interoperability, Data Location, and Sovereignty

Looking ahead: Key focus areas include connectivity with central bank money (wholesale, not retail), harmonizing accounting and tax treatment, enhancing secondary market depth, ensuring reliable price discovery, and reaching consensus on interoperability standards (messaging, identity, data models). Codeum's blockchain security and development platform helps to achieve these goals by offering services such as smart contract audits, which can help mitigate risks in operational smart contracts, as well as KYC and AML compliance.

Possible Risks: Interoperability gaps, inconsistent KYC/AML enforcement, operational risks in smart contracts, and concerns about data location and sovereignty remain.

“As of the reporting cut-off on 31 May 2025, only three DLT MIs have been authorised under the DLT Pilot Regime.” (ESMA Report on the Functioning and Review of the DLTR – Art.14)