The first tokenized fund for retail investors in the Asia-Pacific region launched in Hong Kong

Recently, a tokenized fund named "Hong Kong Dollar Digital Currency Fund" received regulatory approval in Hong Kong, becoming the first such product in the Asia-Pacific region aimed at retail investors. The fund is set to officially launch on February 28, 2025, marking the beginning of the expansion of tokenized assets from the institutional realm to the general market.

This innovative fund converts traditional fund shares into digital tokens on the blockchain, with each token representing a certain proportion of the fund shares. Although the investment targets are similar to those of ordinary money market funds, mainly including Hong Kong dollar short-term deposits and high-quality money market instruments, the way it operates is quite different.

Compared with traditional funds, tokenized funds have significant innovations in ownership confirmation, information transparency, and trading models.

1. Ownership can be verified in real-time through the blockchain.
2. The operation information of the fund is more transparent and public.
3. Transactions are more convenient and can be conducted around the clock.

The fund adopts a custodian tokenization model, with a certain bank acting as the tokenization agent, digital platform operator, and token custodian. Currently, ordinary investors can only subscribe or redeem fund shares in token form through specific compliant trading platforms. It is worth noting that the fund is currently open only to investors in the Hong Kong region.

In terms of the subscription and redemption mechanism, investors need to operate through authorized trading platforms:

• During the subscription, investors pay with fiat currency, and the platform notifies the fund manager to issue the corresponding tokenized shares and mint tokens.
• Upon redemption, investors submit a redemption request, the fund manager redeems shares and destroys the corresponding tokens, and then returns the funds to the investors.

The launch of this innovative fund marks an important step in the application of blockchain technology in the traditional financial sector. Although it currently mainly invests in low-risk assets, it may expand to more diversified investment strategies in the future. With the improvement of the related ecosystem, tokenization funds are expected to leverage on-chain trading and global liquidity advantages to play a significant role in reshaping the global asset management landscape.