The rapid rise of tokenisation risks repeating China's earlier boom-and-bust cycle in peer-to-peer lending unless clear industry standards are established to ensure discipline and innovation, according to a senior Chinese asset manager.
Some multilevel marketing companies in mainland China have already started holding meetings discussing real-world asset (RWA) tokenisation projects over the past year, raising "genuine concerns" that the nascent industry might be heading towards a peer-to-peer-style crisis, said CG Zhou, founder and CEO of CPIC Investment Management (Hong Kong), during a panel discussion on Thursday.
In multilevel marketing, independent distributors sell directly to consumers and earn commissions on their own sales and those of their recruits. Many such businesses have faced criticism over questionable product claims, overpriced products and the fact that participants and customers are exposed to financial losses from fees and unsold stock.
Do you have questions about the biggest topics and trends from around the world? Get the answers with SCMP Knowledge, our new platform of curated content with explainers, FAQs, analyses and infographics brought to you by our award-winning team.
Zhou said such companies' interest in RWA tokenisation raised concerns because such products were a new form of asset that even the financial industry was only beginning to understand in terms of liquidity, security and quality.
"If the industry does not help [RWA tokenisation] develop in a healthy way, there is a real risk it could once more become a P2P situation," he said at the Chinese Financial Association of Hong Kong's annual forum. "P2P in itself is a good innovation, but in our market it became another name for a Ponzi scheme."
Almost a decade ago, China's online lending boom - driven by a proliferation of loosely regulated platforms - imploded after a government crackdown on fraud and defaults, wiping out millions of yuan in savers' money.
Chinese regulators are taking a cautious stance towards the growing popularity of tokenised RWAs, having prioritised financial stability and tightening digital-asset oversight since banning cryptocurrencies in 2021.
The tokenisation of RWAs refers to converting traditional assets such as stocks, bonds, funds and even electric-vehicle charging stations into digital tokens traded on a blockchain.
That contrasts with Hong Kong's proactive regulatory approach, which has accelerated the launch of tokenised RWA projects, including licensed stablecoin initiatives, by mainland Chinese companies in recent months.
Story Continues"From where things stand, asset tokenisation is very likely the right path and represents the future," Zhou said. "But at this stage, we should not idolise it - what it can actually do remains limited and it is still at a very early stage."
People walk across a pedestrian bridge with a display showing stock exchange and economy data in Shanghai on November 28, 2025. Photo: EPA alt=People walk across a pedestrian bridge with a display showing stock exchange and economy data in Shanghai on November 28, 2025. Photo: EPA>
"From a Web3 perspective, RWA boils down to a few points, and the first is trust and security," said Gavin Wang, chief investment officer of crypto-focused venture-capital firm SNZ Holding, on the same panel. Other benefits included efficiency as well as privacy, or data sovereignty, he added.
"Blockchain is a very important technology and, in essence, serves primarily as foundational infrastructure for finance," said Haifeng Bai, CEO of CMB International Asset Management (Hong Kong). He praised the increased transaction efficiency and monetary maturity when fiat currencies move to the blockchain - essentially the concept of stablecoins.
Global stablecoin transaction volume surged 106 per cent to US$46 trillion last year, three times that of Visa, according to a report by US venture capital firm Andreessen Horowitz, while the value of stablecoins in circulation was only about US$250 billion.
However, "while this technology allows almost anything to be put on-chain, we still need to ask whether everything is really worth putting on-chain", Bai added.
"There are no standards for what types of assets are suitable or ready for tokenisation, or what liquidity and security requirements should apply," Zhou said.
Industry guidelines would come in handy for these situations. Zhou's firm - the offshore investment arm of China Pacific Insurance Group - along with HashKey Group and data firm Coinfound, last month co-founded the RWA Professional Committee under the Hong Kong Digital Asset Industry Association.
The committee plans to coordinate with regulators to develop and promote high-level standards and practices for RWA tokenisation in Hong Kong, enabling compliant issuance while improving transparency and liquidity across the digital asset ecosystem, according to a statement.
"Hong Kong has a real opportunity to become a major global centre for RWA, [although] this is likely to take some time," said SNZ Holding's Wang.
This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2025 South China Morning Post Publishers Ltd. All rights reserved.
Copyright (c) 2025. South China Morning Post Publishers Ltd. All rights reserved.
Terms and Privacy Policy Privacy Dashboard More Info
