In recent years, the concept of tokenised finance—where real-world financial instruments are represented, issued, traded or settled via digital tokens—has shifted from theoretical to operational. Interestingly, three major Asian markets are pulling ahead of the U.S. in this domain, thanks to accelerated regulatory frameworks, infrastructure upgrades, and coordinated public-private efforts. Below, we explore how Japan, Hong Kong and Singapore are leading the charge, the implications for crypto markets more broadly, and what to watch in the next 12–24 months.
1. Japan: Building the foundation with custody law, disclosure and token classes
Japan’s approach has been to solidify the regulatory bedrock needed for tokenised finance to scale. The Financial Services Agency (FSA) has pushed for clearer definitions, custody-segregation and disclosure obligations.
Key developments:
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A draft bill under the Payment Services Act (PSA) planned for 2025 addresses asset location and a new intermediary business type.
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Custody requirements now emphasise cold wallets and separation of customer assets.
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The FSA is considering extending insider-trading rules to crypto assets, thereby aligning tokenised assets with securities-style oversight.
Why this matters: By addressing the “rails” of tokenised finance—custody, disclosure, classification—Japan is enabling token‐based instruments to be treated more like traditional securities or deposits, which in turn lowers frictions for institutions. As the article notes: once these building blocks are in place, regulated exchanges can offer broader tokenised products including those tied to major assets like BTC or ETH.
2. Hong Kong: From experimentation to issuance of digital-native bonds and deposits
Hong Kong is arguably moving faster from pilot to live deployment of tokenised finance. Several initiatives illustrate the transition from testing to real transactions.
Highlights include:
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A multi-currency green bond issuance of HK$6 billion in 2024 using digital infrastructure (T+1 settlement).
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Stablecoin licensing regime under the Hong Kong Monetary Authority (HKMA), ensuring fiat-referenced tokens are regulated.
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A pilot programme (“EnsembleTX”) for tokenised real-value deposits with major banks, moving beyond sandbox to live settlement.
Implications: With borrowing, settlement and tokenised asset issuance increasingly operating on digital rails (including tokens representing deposits or bonds), Hong Kong is creating a “neighbourhood” where tokenised finance can converge with crypto markets more fluidly. As the original article observes, this “adjacency” is important because tokenised assets don’t have to be crypto-native—they just need to operate on compatible infrastructure.
3. Singapore: Retail-grade tokenised funds and tokenised money funds
Singapore is adding the consumer layer into tokenised finance—not just sophisticated institutional instruments.
Key moments:
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On 15 May 2025, the Monetary Authority of Singapore (MAS) approved the first retail tokenised money-market fund (MMF) for distribution.
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Singaporean fund-assets under management reached SGD 6.07 trillion in 2024, providing scale for tokenised products aimed at retail.
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MAS is also driving tokenised bank liabilities, tokenised funds and is working with crypto firms (e.g., a collaboration among DBS, Franklin Templeton and Ripple) for tokenised assets which could be used as collateral.
Why this is noteworthy: Retail access to tokenised financial products provides a broader base, not just institutional use-cases. This means tokenisation can no longer be viewed purely as “niche” but is moving into mainstream fund and deposit categories.
4. Why are these markets advancing faster than the U.S.?
Several factors help explain the pace difference:
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Regulatory alignment: In these Asian markets, regulators are proactively defining tokenised finance frameworks (custody, disclosure, token classes, stablecoin licensing) rather than reacting post-factum.
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Infrastructure commitment: Token-friendly rails are being built (tokenised deposits, tokenised bonds, tokenised funds) that link into broader crypto ecosystems.
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Pilot-to-live transitions: Rather than staying in “proof of concept”, many initiatives in Asia are moving into real issuance and settlement (e.g., live bonds, tokenised deposits) whereas in the U.S. progress is more fragmented and regulation remains uncertain.
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Holistic ecosystem thinking: The three markets are not just focusing on one piece (say, tokenised funds), but on a combination of custody, token issuance, funds, stablecoins, and settlement.
5. Impact on crypto markets
What does this mean for the broader crypto ecosystem (e.g., tokens such as Bitcoin or Ethereum)? Three key effects:
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Collateralisation and liquidity: Tokenised financial products (funds, deposits, bonds) that sit near crypto infrastructure can start to act as collateral or settlement layers for crypto trading or DeFi-adjacent products. For example, tokenised MMFs might be accepted as collateral on an exchange.
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Narrower spreads / improved integration: With tokenised assets settled more efficiently on digital rails, the spread between traditional finance and crypto finance may shrink, enhancing arbitrage, trading flows and integration.
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Regulatory clarity benefits crypto indirectly: As tokenised finance becomes more regulated and accepted, the overall infrastructure risk for crypto markets drops. That may lead to greater institutional comfort and flows into digital-asset markets.
6. What to watch in the next 12–24 months
The original article identifies specific milestones and “watchpoints” worth monitoring:
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In Japan: Implementation of the new bill under the PSA (2025) and public consultations by the FSA. How the disclosure classes and custodial standards evolve.
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In Hong Kong: The “batch” size and frequency of digital bond issuance (e.g., the third HKSAR bond batch); uptake of the DBGS grant scheme for tokenisation; stablecoin licensing progress
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In Singapore: Distribution of tokenised funds to retail investors; collateral acceptance under MAS’s “Project Guardian” (or equivalent); tokenised bank liability programmes.
Moreover, given the scale mentioned: tokenised issuance could move from hundreds of millions of USD to billions, meaning meaningful “on-chain” collateral pools and tokenised finance workflows may emerge.
7. Conclusion
While the U.S. has historically been a leader in financial innovation, when it comes to tokenised finance (real-world assets issued and settled via digital tokens), Japan, Hong Kong and Singapore are currently moving faster. Their coordinated regulatory initiatives, infrastructure investments and live-implementation of tokenised funds, deposits and bonds create a foundation that can support a new frontier of finance—one where tokenised assets, crypto-assets and traditional finance converge.
For investors, innovators and crypto-native firms, the message is: don’t just watch the crypto markets — watch the tokenisation rails. Where the rails get built, liquidity and innovation will follow.
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