Asia’s leadership in tokenization is drawing growing attention from global investors, according to Maarten Henskens, Head of Protocol Growth at Startale Group. Regulatory clarity in the region is attracting capital that was previously on the sidelines.
“We’re seeing Western institutions set up Asia-Pacific operations not just to follow capital, but to participate in innovation,” Henskens told Cointelegraph.
Henskens highlighted the distinct yet complementary approaches taken by Japan and Hong Kong.
Regulatory Frameworks: Japan and Hong Kong
Japan’s regulatory framework has been deliberate and forward-looking, establishing strong institutional trust. Succeeding this is the development of infrastructure for security token issuance, exemplified by Mizuho Financial Group’s systems, as noted by Henskens.
Additionally, Japan’s Payment Services Act permits trusted stablecoins to reserve up to 50% of their assets in low-risk government bonds and term deposits.
In contrast, Hong Kong has moved swiftly, launching the Ensemble Sandbox as an innovation hub. “While Japan is building long-term depth, Hong Kong is showcasing how agility can enable experimentation,” Henskens stated.
Drivers of Adoption: Tokenized Bonds and ETFs
The rise of tokenized bonds and ETFs is key to attracting traditional investors. In Japan, real estate security tokens offer access to previously closed markets for retail investors.
Tokenization streamlines administration and increases transparency. “This efficiency, coupled with improved transparency, could make these products attractive to traditional investors hesitant to enter the crypto space,” Henskens explained.
Henskens identified cross-border interoperability as the next major hurdle. “Seamless and compliant cross-jurisdictional movement of tokenized assets is essential for scaling adoption.”
Dubai’s Tokenization Push
Dubai has also advanced significantly in tokenization, introducing frameworks attracting global firms. Its Virtual Asset Regulatory Authority (VARA) updated guidelines in May to facilitate Real World Asset (RWA) tokenization.
According to lawyer Irina Heaver, these rules provide clarity for issuers. Subsequently, in a joint initiative, the Dubai Land Department tokenized and sold two apartments with global investment.
“We’re already seeing a network effect: innovation in one jurisdiction sparks progress in others,” observed Henskens.
