Author: Tiger Research
Compiled by: Shenchao TechFlow
Shenchao Introduction:The market size of real-world asset tokenization surged 26 times in a year, but the real test lies in whether issuance, sales, and redemption can form a closed loop. This article breaks down a complete path for a South Korean asset to reach overseas professional investors via a Hong Kong channel. For those concerned with compliance structures and cross-border distribution, this is a rare practical-level breakdown.
Core Viewpoints
The real-world asset tokenization market is growing rapidly. The real question is: how are tokenized products issued, sold, and redeemed in practice.
In the model broken down in this article, an offshore entity issues products backed by underlying assets, and licensed Hong Kong intermediaries sell them to overseas professional investors. Investors buy the issuer's product, not the underlying asset itself.
Being able to sell does not equal being able to repay. The issuer must have enforceable rights to the asset's cash flows, and the funds must arrive in time to cover its obligations to investors.
The real test comes after the first issuance: can the same structure support the next product? A sustainable market requires a stable supply of assets and investors willing to buy again.
1. The real-world asset tokenization market has already grown large; what comes next is key
According to RWA.xyz data, the size of the real-world asset tokenization market grew from about $1.5 billion in August 2023 to about $38.86 billion on September 13, 2026, an increase of about 26 times. More and more types of assets are being tokenized, and governments around the world are also formulating rules for issuance and sales.
The growth is already obvious. 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.
2. Where to tokenize?
Various jurisdictions are introducing rules for tokenized assets, but the requirements and pace differ. Therefore, where a product is issued directly affects how quickly it can enter the market.
Hong Kong has a mature securities regulatory framework, access to international investors, and experience in issuing tokenized bonds (including government bonds). Its licensing regime and investor protection requirements provide issuers and intermediaries with a framework to bring products to market.
Hong Kong has already established rules for key aspects of tokenization, from Securities and Futures Commission licensing and virtual asset service provider regulation to technical safeguards. This clarity helps institutions plan issuance and gives institutional investors a basis for assessing the degree of protection they receive. This is also one reason Hong Kong is attracting attention as a hub for real-world asset tokenization issuance and distribution.
So how can assets from another country reach overseas investors via Hong Kong? We take South Korean assets as an example to break down the entire process.
3. How the South Korea–Hong Kong structure works
The structure diagram is divided into left and right sides. The left side is South Korea, where the underlying assets originate. The right side is Hong Kong and the British Virgin Islands, where the product is issued and sold.
Black arrows represent the product structure.
South Korean securities firm: provides access to purchase underlying assets, such as listed stocks, fund shares, and notes.
British Virgin Islands special purpose vehicle: buys and holds these assets through the brokerage account of the Hong Kong entity of the South Korean securities firm, then issues notes backed by the assets.
Tokenization platform: creates tokens representing the notes issued by the special purpose vehicle and records issuance and attribution.
Distributor: sells the product to overseas professional investors through licensed intermediaries and compliant trading venues.
Orange arrows represent the flow of subscription funds.
Overseas professional investors subscribe with fiat currency or stablecoins. The funds reach the special purpose vehicle through intermediaries. If subscription is made with stablecoins, the special purpose vehicle converts them into fiat currency through a centralized exchange. The funds are then transferred via the Hong Kong entity to the South Korean securities firm, which completes the purchase of the underlying assets.
Hong Kong fintech company Finloop calls this model the "dual-engine model." One end handles asset supply, and the other handles issuance and distribution. Three points are most critical.
The source of assets can be replaced. Securities firms in other countries and their Hong Kong entities can replace the position of South Korean institutions. Hong Kong can thus become 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 rights against the special purpose vehicle according to the product terms, so the special purpose vehicle's rights to the assets and its ability to pass on proceeds are crucial.
The special purpose vehicle connects on-chain payments with traditional finance. Investors can subscribe with stablecoins and hold tokenized notes, while the underlying assets are purchased and held through brokerage and custody arrangements.
This structure only works if every link holds. This requires suitable underlying assets, a robust issuance structure, and a compliant path to investors.
3.1. How to Choose the Underlying Assets
Before issuing a product, the special purpose vehicle must have clear legal rights to the funds generated by the underlying assets.
For government bonds or fund shares, the question may be whether the special purpose vehicle can directly purchase and hold them. For export receivables or music royalties, the situation is more complex. The right to receive future payments may need to be assigned to the special purpose vehicle, or the asset holder must have a binding obligation to collect and remit the funds to the special purpose vehicle.
In either case, the contract must clearly specify who has the right to receive the cash, who is responsible for collection, and how the funds reach the special purpose vehicle. Without a clear repayment path, the assets cannot reliably support payments to investors.
3.2. What the Offshore Issuer Actually Creates
In this model, the core of tokenization rests with the special purpose vehicle. Even if Korean underlying assets are selected, an independent entity is still needed to issue tokens and distribute returns to overseas investors.
Finloop's dual-engine model assigns this role to a special purpose vehicle registered in the British Virgin Islands. This company is the connection point between Korean asset holders and overseas investors.
The special purpose vehicle issues tokenized notes or securities backed by the revenue rights of Korean assets. Therefore, overseas investors are buying financial products issued by the special purpose vehicle, not the Korean government bonds or export receivables themselves. According to the product terms, the special purpose vehicle pays returns to investors and repays principal at maturity.
For this structure to operate reliably, the timing of the special purpose vehicle's cash inflows must match its payment obligations to investors. The issuer first needs to confirm the collection timing of each underlying asset: interest and principal from government bonds, dividends and redemption proceeds from funds, or settlement payments from export receivables and royalties.
If investors need to be repaid before the SPV receives the funds, the product may face liquidity shortages or delayed repayment.
Establishing an SPV offshore does not automatically give it access to the cash generated by Korean assets. The contract must clearly specify the SPV's legal rights to the underlying assets, who collects the cash, and who is responsible for remitting the funds to the SPV. At the same time, the tokenization platform will transparently record the issuance quantity, token holdings, and burn quantity.
The core task of the offshore issuance stage is to ensure that the cash the SPV can actually receive is sufficient and arrives in time to fulfill the payment terms promised to investors.
3.3. How Broad Can the Circulation Scope Be After the Product Is 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 responsible for distribution. Finloop proposes using a licensed Hong Kong intermediary, which can review the product under Hong Kong securities rules, offer it to professional investors, and reach investors outside Hong Kong.
The intermediary will review the terms and risks of the SPV product and confirm that each investor is eligible to purchase. If the issuance is limited to professional investors, token transfers must also remain restricted after issuance. Therefore, the product terms will restrict transfers to buyers whose eligibility has been verified. This is Finloop's vision for its private placement product structure; this restriction does not apply to every type of tokenized security in Hong Kong.
Finloop also proposes that products first sold in Hong Kong will be offered through intermediaries and trading venues in other regions. However, a first sale in Hong Kong does not automatically permit sales or trading elsewhere. The rules of each market need to be assessed separately. Investors who wish to sell before maturity also need a willing buyer and a method for determining the 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, all require separate arrangements.
4. Three Major Risks That Could Interrupt Payments from Korean Assets to Investors
A tokenized product may be successfully sold in Hong Kong yet still fail to pay investors as promised. The cash generated by the underlying assets must reach investors through the offshore issuance vehicle (SPV). The following three major risks could interrupt this flow of funds.
Unclear rights and collection arrangements: For assets such as export receivables, the contract must clearly specify where the buyer pays and who has the right to collect. Unless the collection obligations and settlement process are legally binding, the payments generated by the assets may never reach the SPV.
Time gap between cash collection and repayment: If investors must be repaid before the underlying assets settle, the SPV may face liquidity shortages and delayed repayment. When won-denominated assets back dollar-denominated products, exchange rate fluctuations and currency conversion costs may also reduce returns.
Cross-border transfer and tax bottlenecks: The Hong Kong intermediary being permitted to sell the product does not solve how funds are transferred from Korean asset holders to the offshore SPV, nor how payments are made to overseas investors. These transfer and tax procedures must be practically feasible.
This model ultimately depends on whether the cash generated by Korean assets can reach overseas investors through the SPV in full and on time, as contractually promised.
5. The second issuance is more important than the first
Selling a product backed by Korean assets once in Hong Kong is only the starting point. The first issuance took a long time: all parties needed to review the assets, finalize contracts, and decide how the product would be sold.
If these tasks had to be repeated from scratch every time a new product was launched, the business would be difficult to scale. Starting from 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 whether this model is viable. Issuers and intermediaries can apply the debtor assessment standards and product disclosure methods developed for the first transaction to subsequent receivables, thereby reducing the design workload for each product. However, adopting the same standards does not mean that the risk of every receivable is the same.
To judge whether this model can support a sustained market, it is necessary to watch progress in three areas:
Does the time required for asset review decrease with each issuance?
Will existing investors return to buy new products?
Do asset holders have a reason to continue supplying assets?
As experience with export receivables accumulates, the model can be extended to other Korean assets. Its success depends not only on a single completed issuance. Asset holders must continue to supply suitable assets, investors must be willing to reinvest, and intermediaries must also see the value in bringing new products to market.
