Hong Kong approves first fully native tokenized fund as Asia advances blockchain-based investment products

Hong Kong has approved its first digitally native tokenised fund, the Baillie Gifford Enhanced Yield Fund (BAGEY), which allows professional investors direct ownership of bond assets on the Ethereum and Solana blockchains. Concurrently, SBI Global Asset Management and DigiFT launched the JX token on Solana, bringing a Japanese equity strategy on-chain. These developments occur amid rapid growth in the global tokenised real-world asset market, which reached over $31 billion by mid-2026.

Tokenized asset market growth

• ▪Ripple and BCG forecast the tokenised real-world asset market will reach $18.9 trillion by 2033
• ▪Standard Chartered projects the tokenised real-world asset market will reach $30 trillion by 2034
• ▪The tokenised real-world asset market grew from approximately $5.8 billion in early 2025 to over $31 billion by mid-2026
• ▪The value of tokenized real-world assets distributed on public blockchains surged globally from $5.9 billion to $21.9 billion in 2025

Tokenized fund developments and approvals

• ▪The JX token provides accredited and institutional investors with on-chain exposure to a listed-equity strategy managed by SBI Asset Management
• ▪SBI Global Asset Management and DigiFT launched the SBI Japan High Dividend Equity Strategy Token (JX token) on the Solana blockchain
• ▪The Baillie Gifford Enhanced Yield Fund (BAGEY) is an actively managed portfolio of short-duration government and corporate bonds developed with BNY
• ▪Hong Kong's Securities and Futures Commission approved the Baillie Gifford Enhanced Yield Fund (BAGEY), the city's first digitally native tokenised fund.
• ▪Most tokenised real-world asset growth is concentrated in US Treasuries and money market funds, such as BlackRock's BUIDL fund which reached approximately $2.5 billion
• ▪BAGEY supports T+0 redemptions for up to 10% of net asset value and allows subscriptions and redemptions using fiat currency or USDC
• ▪BAGEY is issued natively on the Ethereum and Solana blockchains, using the public blockchain as the official record of ownership
• ▪Tokenised money market funds allow stablecoin holders to earn Treasury-level interest on idle digital cash on the blockchain

Private equity structural challenges

• ▪Tokenising private equity requires fungible tokens with identical rights, which conflicts with the traditional capital call model where investor positions diverge
• ▪Skadden's 2026 analysis indicates that tokenised private fund structures likely require fund commitments to be fully contributed upfront
• ▪Combined tokenised private equity and venture capital funds hold less than $2 billion in assets out of an $11 trillion sector

Real estate tokenization barriers

• ▪Real estate represents an asset class valued at roughly $393 trillion, making it among the least liquid asset classes globally
• ▪An EY survey found that 56 percent of institutional investors ranked real estate as their top or second preference among tokenised alternatives

Cayman Islands regulatory changes

• ▪In March 2026, coordinated amendments to Cayman Islands legislation excluded tokenised funds from the Virtual Asset Service Providers licensing regime
• ▪A dozen tokenised funds have been conditionally registered with the Cayman Islands Monetary Authority following the March 2026 legislative amendments

Valuation governance requirements

• ▪The Financial Conduct Authority's April 2026 policy statement requires fund managers to retain authority over the register to correct errors and process court decisions