A First for Tokenized Public Funds
Fund shares that trade at 3 a.m. on a Sunday. In Hong Kong, that’s now real.
On Monday, October 26, the Securities and Futures Commission (SFC) approved secondary trading of tokenized public funds on an SFC-licensed virtual asset trading platform. Trading kicked off the same day.
The SFC calls it the world’s first secondary trading of tokenized public funds on a licensed platform of this kind, RTHK reported. Worth remembering: that label comes from the regulator itself, not an independent ranking.
Elisa Ng, the SFC’s executive director of investment products, said the move “marks an important milestone” and adds “24/7 trading capability” to Hong Kong’s tokenization ecosystem.
Which Funds Are Trading
The first batch is small, and deliberately conservative: two money market funds the SFC had already authorized. FX News Group named them:
- ChinaAMC HKD Digital Money Market Fund
- ChinaAMC USD Digital Money Market Fund
Money market funds hold short-term, lower-risk debt and cash-like assets. A cautious place to start.
Each token represents fund shares. So the trading price should track the fund’s net asset value (NAV), meaning the value of its holdings per share.
The approval coverage didn’t name the trading platform. Under the SFC framework, Hong Kong members of the public can trade these products on licensed platforms.
There’s a gate first, though. The platform must confirm that each investor understands the risks, according to a summary by law firm Simmons & Simmons.
How 24/7 Trading Works
Until now, investors dealt through the fund manager or its distributors. They bought new shares or redeemed old ones at NAV only on dealing days.
That route stays open. What’s new is a secondary market where investors buy and sell fund tokens with each other around the clock, including weekends.
Picture it. It’s Saturday, and you want out of a money market fund.
Before, you’d wait for the next dealing day and redeem through the fund. Now you can sell your tokens to another buyer on the platform right away, at whatever price the market offers in that moment.
Two safeguards aim to keep that price near fair value, Simmons & Simmons noted:
- Indicative NAV. Platforms must show a live estimate of the fund’s value, typically refreshed at least every 15 seconds during trading hours. They must also warn investors when a trade price strays far from it.
- Market makers. Product providers must use best endeavors to keep at least one market maker on each product. Any market maker that wants out must give at least three months’ notice.
None of this came out of nowhere. Back in April, SFC chief executive Julia Leung said the products could trade “in the evening and on weekends,” Ledger Insights reported.
The Rules Behind the Pilot
Monday’s launch is the first product under a pilot framework the SFC set out in a circular on April 20, 2026.
That framework covers four areas: the trading channel, fair pricing, liquidity provision, and disclosure, according to RTHK and Markets Media.
Ledger Insights reported that the guidance borrows heavily from existing ETF trading rules. And each product’s tokenization features need SFC approval before trading can start.
What comes next? The SFC says it will closely monitor trading before expanding beyond money market funds.
No timeline yet.
A bigger plan sits in the background. The SFC says tokenized funds could later link up with tokenized bank deposits, which it and the Hong Kong Monetary Authority are developing under Project Ensemble.
That could let investors move sale proceeds into other investments instantly.
For now, it’s a stated goal. Not a live feature.
Where This Fits in the Tokenization Race
A quick refresher. Tokenization puts traditional financial assets, like fund shares or bonds, on a blockchain so they can move and settle faster.
Hong Kong’s market for these products has grown fast. As of March 2026, the city offered 13 tokenized products to the public, according to SFC figures cited by Ledger Insights.
Their tokenized classes held HK$1.4 billion. That’s roughly seven times the level a year earlier.
The big global managers are heading the same way. BlackRock’s tokenized fund BUIDL holds about $2.17 billion in U.S. Treasuries, repos, and cash, The Block reported on October 26.
The U.S. has its own experiments. BNY and Citadel recently put a tokenized Treasury fund to work in a repo deal, which we covered in our look at tokenized Treasuries in repo.
Hong Kong’s twist is access. Public fund investors now have access to a regulated venue that never closes.
The Investor Takeaway
The plumbing is in place. Trading has barely started. Here’s what will show whether it works:
- Liquidity. Two funds are a small start. Thin trading can widen the gaps between buy and sell prices.
- Off-hours pricing. Bond and money markets close at night and on weekends. Token prices could drift above or below NAV during those hours, whether or not market makers are active.
- The redemption anchor. Investors can still redeem at NAV. That may close big price gaps once trading reopens. No guarantee, though.
- Expansion. Watch for more fund managers, more platforms, and more fund types to join the pilot.
- Product basics. These are investment funds, not bank deposits. Their value can move. A 24/7 market doesn’t change what the funds hold.
For crypto investors, the real story is the venue. Regulated public funds now trade on a licensed crypto platform.
Do investors actually want fund shares on a 24/7 clock? The next few months of volume data will tell.
Sources
- SFC approves first-ever secondary trading of tokenized public funds, Securities and Futures Commission
- HK gets world-first secondary tokenized funds trading, RTHK
- Hong Kong Approves 1st Secondary Trading Of Tokenized Funds, Markets Media
- HK regulator approves secondary trading of two tokenized money market funds, FX News Group
- SFC framework for secondary trading of tokenized funds, Simmons & Simmons
- Hong Kong’s SFC to pilot tokenized fund trading on crypto exchanges, Ledger Insights
- BlackRock joins SBI and Startale to link tokenized MMFs with Japanese yen stablecoins, The Block
Crypto Club and Mode Mobile communications are for informational purposes only, and are not a recommendation, solicitation, or research report relating to any investment strategy, security, or digital asset. All investments involve risk, including the loss of principal, and past performance does not guarantee future results.
Any information contained in this commentary does not purport to be a complete description of the securities, markets, or developments referred to in this material. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. There is no guarantee that any statements or opinions provided herein will prove to be correct.
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