Tiger Research has broken down how real-world asset, or RWA, products can be issued and distributed through Hong Kong, arguing that the central issue is no longer whether tokenization can be done in theory, but how a product is structured, sold, and ultimately repaid in practice.
In the model reviewed by the firm, an offshore entity issues a product backed by underlying assets, and a licensed Hong Kong intermediary distributes it to overseas professional investors. Investors are buying the issuer’s product, not the underlying asset itself. The report adds that successful distribution does not guarantee repayment. The issuer must have enforceable rights to the asset cash flows, and the money has to arrive on time if it is going to meet its obligations to investors.
After rapid market growth, issuance mechanics become the main question
Data from RWA.xyz cited in the report shows that the tokenized real-world asset market expanded from about $1.5 billion in August 2023 to about $38.86 billion on Sept. 13, 2026, roughly 26 times larger. More asset classes are being tokenized, and more jurisdictions are writing rules for issuance and distribution.
For Tiger Research, that growth is already visible. The harder question now is how to convert an asset into a product that investors can actually purchase and later receive money back from under workable terms.
Why Hong Kong is being used as the issuance and distribution hub
The report says rules for tokenized assets are emerging across jurisdictions, but the requirements and pace differ. That makes the choice of issuance venue a direct factor in how quickly a product can reach the market.
Hong Kong stands out in this framework because it has an established securities regulatory regime, access to international investors, and prior experience with tokenized bond issuance, including government bonds. Its licensing system, investor protection standards, and rules covering virtual asset service providers and technical safeguards give issuers and intermediaries a clearer operating structure. The same clarity also gives institutional investors a basis for judging the level of protection they are getting.
Tiger Research presents this as one reason Hong Kong is drawing attention as a hub for issuing and distributing RWA products, then uses Korean assets to show how such a structure can work.
How Korean assets are routed to overseas investors through Hong Kong
In the structure described, Korea sits on one side as the source of the underlying assets. Hong Kong and the British Virgin Islands sit on the other side as the locations where the product is issued and sold.
The black arrows in the model represent the product structure:
- A Korean securities firm provides access to the underlying assets, such as listed shares, fund interests, and notes.
- A British Virgin Islands special purpose vehicle, or SPV, uses a brokerage account held through the Hong Kong arm of that Korean securities firm to buy and hold those assets, then issues notes backed by them.
- A tokenization platform creates the tokens representing the notes issued by the SPV and records issuance and ownership.
- A distributor sells the product to overseas professional investors through licensed intermediaries and compliant trading venues.
The orange arrows represent the subscription money flow. Overseas professional investors subscribe using fiat currency or stablecoins. Funds move through intermediaries to the SPV. If stablecoins are used, the SPV converts them into fiat through a centralized exchange. The proceeds then move through the Hong Kong entity to the Korean securities firm, which completes the purchase of the underlying assets.
Hong Kong fintech company Finloop calls this structure a “dual engine model.” One side is responsible for asset supply. The other handles issuance and distribution.
Three points that hold the dual engine model together
First, the source of assets can be replaced. The report says the Korean institutions in this structure could be swapped out for securities firms from other countries and their Hong Kong entities. In that setup, Hong Kong can serve as a distribution channel for products backed by assets from several markets.
Second, the SPV sits at the center of the arrangement. It receives subscription money, buys or holds assets, and issues the notes. Investors assert their rights against the SPV under the product terms, which makes the SPV’s rights over the assets, and its ability to pass income through, critical to the structure.
Third, the SPV connects onchain payments with traditional finance rails. Investors can subscribe with stablecoins and hold tokenized notes, while the underlying assets are still purchased and held through broker and custody arrangements.
Tiger Research says the structure only works if every link holds: the underlying assets need to fit, the issuance design has to be sound, and there must be a compliant route to investors.
Picking the underlying assets starts with legal rights to the cash flows
Before any product is issued, the SPV must have clear legal rights to the money generated by the underlying assets.
For government bonds or fund interests, the question may be whether the SPV can directly purchase and hold them. For export receivables or music royalties, the situation is more involved. Rights to collect future payments may need to be transferred to the SPV, or the asset holder may need a binding duty to collect the money and remit it to the SPV.
Whatever the asset type, the contracts need to spell out who is entitled to the cash, who collects it, and how that money reaches the SPV. Without a clear collection path, the asset cannot reliably support payments to investors.
What the offshore issuer actually creates
The report places the center of tokenization on the SPV itself. Even when the underlying asset is Korean, a separate entity is still needed to issue the tokens and distribute the proceeds to overseas investors.
Under Finloop’s dual engine model, that role is handled by a British Virgin Islands SPV. The company becomes the link between Korean asset holders and overseas investors.
The SPV issues tokenized notes or securities backed by rights to the income from Korean assets. That means overseas investors are buying a financial product issued by the SPV, not buying Korean government bonds or export receivables directly. Under the product terms, the SPV pays returns to investors and repays principal at maturity.
For the structure to work in a dependable way, the timing of the SPV’s incoming cash has to match the timing of its payment obligations to investors. The issuer first needs to identify when each type of underlying asset pays out, whether that means interest and principal on government bonds, fund distributions and redemption proceeds, or settlement payments tied to export receivables and royalties.
If investors need to be paid before the SPV receives the money, the product may face a liquidity shortfall or delayed repayment.
Tiger Research also notes that setting up an offshore SPV does not automatically give it access to the cash generated by Korean assets. Contracts still have to define the SPV’s legal rights over the assets, who collects the cash, and who transfers it to the SPV. At the same time, the tokenization platform keeps a transparent record of the amount issued, who holds the tokens, and how many are burned.
The main task at the offshore issuance stage, the report says, is to make sure the SPV can actually receive enough cash, and receive it in time, to meet the payment terms promised to investors.
How far the product can circulate after a Hong Kong sale
Creating the product through an offshore SPV is only the first step. To sell it 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 rules, offer it to professional investors, and reach investors outside Hong Kong.
That intermediary would examine the terms and risks of the SPV product and confirm that each investor is eligible to buy it. If the offering is limited to professional investors, post-issuance token transfers must remain restricted as well. Product terms would therefore limit transfers to buyers whose qualifications have already been verified. Tiger Research notes that this is Finloop’s design for a private placement structure and does not apply to every tokenized security in Hong Kong.
The report also says Finloop proposes that products first sold in Hong Kong could later be offered through intermediaries and trading venues in other jurisdictions. Still, an initial sale in Hong Kong does not automatically authorize sales or trading elsewhere. The rules in each market have to be assessed separately.
Investors who want to exit before maturity still need a buyer willing to take the product and a way to determine price. If the product is to be used as collateral, an institution also needs to be willing to accept it.
In this design, Hong Kong provides the route for initial distribution and investor qualification checks. Sales, trading, and collateral arrangements in other regions would still need separate work.
Three risks that can break the payment chain
Tiger Research says a tokenized product can be sold successfully in Hong Kong and still fail to pay investors as promised. Cash generated by the underlying assets has to move through the offshore SPV before it reaches investors, and the report identifies three main risks that can interrupt that chain.
- Unclear rights and collection arrangements. For assets such as export receivables, contracts need to specify where the buyer pays and who is entitled to collect. Unless collection duties and settlement processes are legally binding, the proceeds may never reach the SPV.
- A timing gap between cash recovery and investor payments. If investors have to be paid before the underlying assets settle, the SPV may face a liquidity shortfall and delayed repayment. When KRW-denominated assets support a USD-denominated product, exchange-rate swings and conversion costs can also reduce returns.
- Cross-border transfer and tax bottlenecks. Approval for a Hong Kong intermediary to sell the product does not solve how money moves from the Korean asset holder to the offshore SPV, nor how payments are then made to overseas investors. Those transfer routes and tax processes have to work in practice.
In the end, the model depends on whether cash generated by Korean assets can move through the SPV in full and on time, as the contracts promise, to the overseas investors who bought the product.
The second issuance matters more than the first
The report closes by arguing that selling one Korean-asset-backed product in Hong Kong is only a starting point. The first issuance usually takes time because the parties involved need to review the assets, finalize the contracts, and decide how the product will be sold.
If that work has to be repeated from scratch for every new product, the business will be hard to scale. The real test begins with the second issuance, when the market needs to know whether the framework built for the first deal can be reused.
Tiger Research points to USD-settled export receivables as one way to test whether the model is workable. Issuers and intermediaries can apply the debtor assessment standards and disclosure methods built for the first transaction to later receivables-backed products, reducing the amount of design work needed for each one. Even so, using the same standards does not mean each receivable carries the same risk.
To judge whether the model can support an ongoing market, the report says three developments need to be watched:
- Whether the time needed for asset review falls with each issuance.
- Whether existing investors return to buy new products.
- Whether asset holders have reason to keep supplying assets.
As experience with export receivables accumulates, the model could expand to other Korean assets. Its success, Tiger Research says, will not be determined by a single completed issuance. It will depend on whether asset holders continue to supply suitable assets, whether investors are willing to reinvest, and whether intermediaries still see value in bringing new products to market.