Tiger Research: Three Strategies for Financial Institutions to Keep Up with the Tokenization Wave

The market for tokenizing real-world assets has reached between $25 billion and $36 billion! A complete guide for financial institutions to seize opportunities abroad.

Written by: Tiger Research

Compiled by: AididiaoJP, Foresight News

A recent in-depth report from Tiger Research indicates that the market for tokenizing real-world assets is rapidly growing, but many jurisdictions still lack comprehensive regulatory frameworks. Local financial institutions must make strategic choices between waiting for domestic legislation, using regulatory sandboxes for limited experiments, or entering mature overseas markets first.

Before officially entering, institutions must prepare thoroughly in six core areas, including jurisdiction selection, licensing, asset definition, target investor scope, and the design of settlement mechanisms and operational arrangements. The core goal is to accumulate real operational experience as quickly as possible by choosing the path that best suits their circumstances. There are primarily two paths: directly entering jurisdictions with established regulations or adopting a technology route based on on-chain native platforms.

Waiting, Experimenting, or Going Abroad?

By the first half of 2026, the market size for tokenizing real-world assets is expected to reach approximately $25 billion to $36 billion. This market has achieved significant efficiency improvements through tokenization—such as automated interest payments and redemptions, shortened settlement cycles, and an expanded customer base—thus attracting considerable attention from institutional investors.

However, financial institutions still face practical barriers due to regulatory gaps. While there is currently no explicit prohibition on tokenization, the legal framework for distributed ledger records to gain binding legal effect remains incomplete, and investor rights lack adequate protection. In this context, financial institutions generally adopt three strategies:

• Waiting for domestic legislation: This approach is beneficial for risk management but may miss opportunities to capture early market share.
• Using regulatory sandboxes: This allows for limited experimentation but is usually restricted to small-scale scenarios like fractional investments, making it difficult to scale to standardized securities issuance.
• Entering overseas markets first: Issuing digital bonds in jurisdictions with established regulations to accumulate performance and track records abroad, thereby establishing competitive advantages.

As real-world asset businesses are essentially global in nature, financial institutions need to accumulate operational capabilities in different regulatory environments. For jurisdictions where regulations are not yet complete, institutions have even more reason to gain practical experience in overseas markets ahead of their peers.

Tokenization is Not Magic

International operations of real-world assets are not the result of isolated decisions but a series of interconnected choices. Tokenization is not magic; it is the process of migrating existing financial instruments to new infrastructures, which requires higher precision than traditional issuance, not lower.

Before deciding to enter, institutions should honestly assess their preparedness in the following six areas:

• Establishing an offshore base: Determine how to leverage key jurisdictions like Hong Kong, Singapore, or the United States—whether through existing entities, setting up new entities, or partnering with local companies. New entities offer greater control but require significant resource investment; partnerships allow for quicker entry but limit the degree of internalized core capabilities.
• Licensing: Meet the licensing requirements of the target sales jurisdiction. Options include applying directly (time-consuming and costly) or leveraging existing platform licenses (quicker but requires structuring issuance according to platform specifications).
• Asset definition: The type of assets chosen for tokenization determines the entry barriers. Standardized securities like bonds have mature structures and are relatively easy to implement; however, non-standard assets like real estate or trade receivables require more time for legal review and structural design.
• Target investor scope: The typical strategy is to target all jurisdictions except the United States. Sales to non-U.S. investors can rely on Regulation S offshore exemptions; if U.S. investors are included, additional requirements such as Regulation D must be met, increasing structural complexity. Furthermore, many security token offerings (STOs) and real-world asset platforms are limited to accredited or institutional investors, so sales strategies must be determined alongside the investor scope.
• Settlement currency and payment processes: Decide whether to accept local currency, USD, stablecoins, or wholesale central bank digital currencies for settlement. This not only concerns currency choice but also directly impacts investor accessibility, custody structures, and final revenue. For example, accepting stablecoins introduces conversion requirements and potential additional costs.
• Other operational requirements: Depending on the structure, considerations must also include blockchain selection, custody, on-chain operations, and post-issuance governance. It is particularly important to clarify who controls interest payments and redemptions, registration management, and the ability to forcibly transfer or freeze tokens in the event of incidents, as these are similar to the operational requirements of traditional financial instruments.

Even after the structural design is complete, the work is not finished—securities must be successfully sold and investors found.

Choosing an Operating Location

Jurisdiction selection is a strategic decision that requires weighing regulatory compatibility and operational efficiency.

For institutions with existing offshore presence, the most efficient starting point is to first assess the current jurisdiction. If the primary goal of the offshore tokenization strategy is to accumulate practical experience as early as possible, then establishing a new jurisdiction base presents a higher threshold in terms of time and funding.

• Hong Kong: Leading in regulatory completeness and enforceability. Security tokens are regulated under the existing Securities and Futures Ordinance framework, and in April 2026, the Securities and Futures Commission's circular allowed secondary trading on licensed virtual asset exchanges, completing the closed loop of issuance and distribution. Infrastructure like HSBC Orion is already operational, with strong policy support, including subsidies from the Monetary Authority for issuance costs. However, it should be noted that if the legislation for introducing new virtual asset trading and custody licenses proceeds as planned in 2026, compliance issues regarding transitional provisions deserve attention.
• Singapore: Precise framework and clear regulations. Singapore strictly adheres to the principle of

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