Hong Kong's Economy Has Two Gravity-Defying Puzzles
Because of its peg to the US dollar, the city's borrowing costs should move in lockstep with those in the US. However, the gap between the one-month Hong Kong interbank offered rate, or Hibor, and the US secured overnight financing rate, or SOFR, has been widening to unprecedented levels since May, even as the Hong Kong Monetary Authority tightens liquidity.
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Asia markets set to open mixed as investors await key economic data in the region
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Tokenization has significant potential to transform capital markets, promising real-time settlement, broader investor access and greater programmability across financial infrastructure. But while the rails are evolving, current models for tokenized equities remain fragmented, opaque and misaligned with the safeguards that define the traditional securities markets. Today, two dominant approaches exist: The wrapper model involves tokenized IOUs that provide synthetic exposure to existing equities rather than direct ownership. These tokens do not grant holders any governance rights or enforceable claims to the underlying shares. Transferability is typically restricted to closed ecosystems, liquidity is siloed across issuer-controlled platforms and regulation can be murky, with many products not available to U.S. persons. The on-chain issuance model means creating a native digital share class issued via blockchain. While this approach aligns more closely with the legal definition of security, it introduces operational complexities and scalability challenges. Active issuer participation is mandatory, liquidity remains fragmented between the on-chain tokens and traditional securities and broker-dealer standards are inconsistent, complicating participation for regulated financial institutions and investors. What's missing is a tokenization model that combines the speed, accessibility and composability of tokenization with the structure, safeguards and clarity of traditional capital markets. Fortunately, that model already exists elsewhere: depository receipts (DRs). In many ways, DRs were the original form of tokenization. For over a century, American depository receipts (ADRs) have enabled foreign equities to trade in the U.S. through a regulated, custody-backed structure. Today, this framework can also bridge traditional securities with tokenized infrastructure, offering a scalable and legally sound foundation for modern equities. The case for tokenized DRs By combining blockchain rails with the legal and operational framework of DRs, market participants can unlock broader participation and real-time asset servicing without compromising on investor protections or operational standards. Other benefits include: Preservation of shareholder rights Unlike synthetic wrappers, the ADR structure perfects shareholder rights, enabling them to be passed along to token holders. This includes economic entities, such as dividends and other corporate actions, as well as governance rights such as voting. Clear segregation of duties A regulated custodian bank safekeeps the underlying shares in a segregated, bankruptcy-remote structure, held solely for the benefit of ADR holders. An independent, market-neutral depositary facilitates DR issuances and cancellations, maintains accurate records using an SEC-registered transfer agent and performs daily reconciliation with the underlying assets. The depositary has no ownership claim on the underlying shares themselves. Regulatory precedent ADRs are recognized as securities under U.S. law. For years, they have been used to allow U.S. investors to own and trade foreign shares in the U.S. markets. Furthermore, the receipt structure has been flexible to enable fractionalization of U.S. preferred shares. With regards to tokenized securities, Commissioner Hester Peirce in her latest statement on tokenization mentioned that 'a token could be a receipt for a security.' Full fungibility and market access ADRs are fully fungible and redeemable for their underlying shares, enabling same-day, non-taxable conversions. They can be made available to both retail and institutional market participants who can choose to hold securities in tokenized or traditional form without sacrificing rights or liquidity. The fungibility of ADRs is supported by analysis from MSCI, which indicates that, on average, ADRs trade at parity with their underlying local shares. Scalability ADRs can be deployed by both stock issuers and secondary market participants, enhancing scalability and adoption — unlike on-chain issuance models reliant on issuer initiation and active maintenance. A trusted mechanism for bridging markets Proven and fully integrated into global finance, applying the ADR structure to tokenized equities is a logical evolution. As tokenization matures, this kind of innovation is critical to scaling adoption and trust. Just as SEC Rule 12g3-2(b) streamlined access to foreign issuers, a similar regulatory mechanism could unlock broader tokenized equity markets, enabling public companies to offer tokenized shares to U.S. investors in a compliant manner. The path forward doesn't require inventing a new wrapper — it requires adapting a proven one. In other words, the bridge between traditional finance and digital infrastructure already exists. It just needs to be thoughtfully crossed. Sign in to access your portfolio
Yahoo
20 minutes ago
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Importers struggle to resell Canadian canola meal caught in China tariff crossfire
By Naveen Thukral SINGAPORE (Reuters) -Importers are struggling to resell several cargoes of Canadian canola meal that arrived in China after Beijing imposed hefty import tariffs on the protein-rich ingredient, three trade sources said. Up to 400,000 metric tons of canola meal, used mainly in animal feed, is sitting in secure warehouses near Chinese ports, with importers facing a 100% duty if they release the cargoes for sale in the domestic market. "It is not viable to pay the duty, so we are looking at the possibility of re-selling it to other markets, maybe to feed-makers in Southeast Asia or South Korea," said an executive with a trading company that is one of the importers of canola meal. "But it will have to be at a discount," the person said, declining to be named as they were not authorised to speak to media. Traders said the canola meal was being offered at a discount of about 30%. The stuck cargoes underscore the struggles of agricultural companies caught in the middle of trade standoffs, at a time when Washington and Beijing's tariff war has disrupted trade in farm products including soybeans. China on Tuesday announced a preliminary anti-dumping levy of 75.8% on imports of canola oilseed from Canada, escalating a year-long trade dispute that began last August with Ottawa's tariffs on Chinese electric vehicle imports. In March, China imposed a 100% tariff on Canadian rapeseed oil, oil cakes and pea imports. "These measures show how the Chinese government is super angry with the Canadian government," said a trader at a company which runs oilseed processing plants in China. "They suddenly increased the duty to 100% on canola meal, which was not expected." Two of the traders estimated the stranded canola meal volumes at 400,000 tons, while one trader said it was around 200,000 tons. At 400,000 tons, the value of canola meal stuck at Chinese ports is worth around $120 million, traders said. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
