The key question in real-world asset tokenization is no longer whether assets can be put on-chain. It is whether a product can actually be issued, sold, and repaid in practice.
In a report cited by TechFlowPost, Tiger Research examined a model in which Korean assets are routed through Hong Kong and offered to overseas professional investors. The structure uses an offshore issuer, licensed intermediaries in Hong Kong, and a tokenization platform to connect underlying assets with cross-border distribution.
Market growth is clear. Execution is the real test.
According to data from RWA.xyz cited in the report, the tokenized real-world asset market grew from about $1.5 billion in August 2023 to about $38.86 billion on Sept. 13, 2026, a roughly 26-fold increase.
Tiger Research said the next issue is not growth itself, but whether an asset can be turned into a product that investors can buy and later be repaid from with certainty.
Why Hong Kong is central to the structure
The report said tokenization rules are being introduced across jurisdictions, but the pace and requirements differ. That makes the place of issuance a direct factor in how quickly a product can reach the market.
Hong Kong was highlighted for its securities regulatory framework, its access to international investors, and its experience with tokenized bond issuance, including government bonds. The report also pointed to licensing rules, regulation for virtual asset service providers, and technical safeguard requirements as part of the reason institutions view Hong Kong as a practical hub for RWA issuance and distribution.
How the Korea-Hong Kong structure works
The model is split into two sides. Korea is the source of the underlying assets. Hong Kong and the British Virgin Islands are where the product is issued and distributed.
On the product side, a Korean securities firm provides access to the underlying assets, which may include listed stocks, fund interests, and notes. A British Virgin Islands special purpose vehicle, or SPV, buys and holds those assets through a brokerage account opened via the Hong Kong entity of the Korean securities firm, then issues notes backed by them. A tokenization platform creates tokens representing the notes issued by the SPV and records issuance and ownership. Distribution is handled through licensed intermediaries and compliant trading venues for overseas professional investors.
On the funding side, overseas professional investors can subscribe with fiat or stablecoins. Funds move through an intermediary to the SPV. If the subscription comes in stablecoins, the SPV converts them into fiat through a centralized exchange. The money is then sent through the Hong Kong entity to the Korean securities firm to complete the purchase of the underlying assets.
Hong Kong fintech company Finloop refers to this as a “dual-engine model.” One side handles asset supply. The other handles issuance and distribution.
- The source of assets can be swapped out. Securities firms from other countries, along with their Hong Kong entities, could take the place of the Korean institution in the same structure.
- The SPV sits at the center. It receives subscription funds, purchases or holds the assets, and issues the notes. Investors make claims against the SPV under the product terms.
- The SPV also links 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.
Tiger Research said the structure only works if all of these parts hold together at the same time: suitable assets, a robust issuance arrangement, and a compliant route to investors.
Asset selection starts with legal rights to cash flows
Before a product is issued, the SPV must have clear legal rights to the cash generated by the underlying assets.
For government bonds or fund interests, the issue may be whether the SPV can directly purchase and hold them. For export receivables or music royalties, the setup is more complicated. Rights to future payments may need to be transferred to the SPV, or the asset holder may need to take on a binding obligation to collect the money and remit it onward.
The report said every structure must clearly state who is entitled to the cash, who is responsible for collection, and how the money reaches the SPV. Without a reliable repayment path, the asset cannot consistently support payments to investors.
What the offshore issuer is actually creating
In this model, the core of tokenization sits with the SPV. Even when the underlying assets are in Korea, a separate issuer is still needed to mint the tokenized instrument and pass returns to overseas investors. In Finloop’s proposal, that role is assigned to a British Virgin Islands SPV, which acts as the link between Korean asset holders and offshore buyers.
The SPV issues tokenized notes or securities backed by the economic rights of Korean assets. That means overseas investors are buying a financial product issued by the SPV, not the Korean government bonds or export receivables themselves. Under the product terms, the SPV pays returns to investors and repays principal at maturity.
For that arrangement to hold, the timing of cash coming into the SPV has to line up with its obligations to investors. Issuers need to confirm when each underlying asset pays out, whether through bond coupons and principal, fund distributions and redemption proceeds, or settlement of export receivables and royalties. If investors must be paid before the SPV has received the money, the product may face a liquidity shortfall or delayed repayment.
The report stressed that forming an offshore SPV does not automatically give it access to cash generated by Korean assets. Contracts must specify the SPV’s legal rights over the underlying assets, who collects the money, and who remits it to the SPV. At the same time, the tokenization platform records the issued amount, token holdings, and burned supply in a transparent way.
The central task at the offshore issuance stage is straightforward: make sure the SPV can actually receive enough cash, and receive it on time, to meet the payment terms promised to investors.
How far the product can travel 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 still needs a financial institution to handle distribution. Finloop proposed 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.
The intermediary would review the SPV product terms and risks, then confirm that each investor is eligible to buy. If the issuance is limited to professional investors, secondary transfers also have to remain restricted. In that case, the product terms would limit transfers to buyers whose qualifications have already been verified. The report said this is Finloop’s proposed structure for private placements and does not apply to every tokenized security in Hong Kong.
Finloop also proposed that products first sold in Hong Kong could later be offered through intermediaries and trading venues in other regions. Still, a first sale in Hong Kong does not automatically permit sales or trading elsewhere. Rules in each market have to be assessed separately. Investors who want to sell before maturity also need a willing buyer and a way to determine price. If the product is to be used as collateral, an institution must be willing to accept it.
In this setup, Hong Kong provides the route for initial distribution and investor qualification checks. Sales, trading, and collateral use in other places would need separate arrangements.
Three risks can break the repayment chain
The report said a tokenized product can be sold successfully in Hong Kong and still fail to pay investors as promised. Cash generated by the underlying asset has to move through the offshore SPV and ultimately reach the investor. Three risks can interrupt that flow.
- Unclear rights and collection arrangements. For assets such as export receivables, contracts must specify where the buyer pays and who has the right to collect. Without legally binding collection and settlement arrangements, proceeds may never reach the SPV.
- A timing gap between cash recovery and investor payment. If investors need to be paid before the underlying asset settles, the SPV may face a liquidity shortfall and delay repayment. When KRW-denominated assets back a USD-denominated product, foreign exchange moves and conversion costs can also reduce returns.
- Cross-border transfer and tax bottlenecks. Approval for a Hong Kong intermediary to distribute the product does not solve how money moves from Korean asset holders to the offshore SPV, or how that money is then paid to overseas investors. Those transfer and tax processes must work in practice.
Tiger Research reduced the issue to one operational question: whether cash generated by Korean assets can reach overseas investors through the SPV in full and on time, as required by contract.
The second issuance matters more than the first
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 contracts, and decide how the product will be distributed.
If every new product requires that entire process to begin again from scratch, the business will be hard to scale. The real test starts with the second issuance: whether the structure built for the first deal can be reused.
The report used USD-settled export receivables as an example of how the model could be tested. Issuers and intermediaries can apply the debtor assessment standards and product disclosure methods built for the first deal to later receivables, reducing the design work needed for each new product. Even so, using the same standards does not mean every receivable carries the same risk.
Tiger Research said three indicators matter when judging whether this model can support an ongoing market:
- whether the time required 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 builds around export receivables, the structure could be extended to other Korean assets. The report said success will not be decided by a single completed issuance. It depends on a repeated supply of suitable assets, returning investors, and intermediaries that still see value in bringing new products to market.
