Tokenisation Boom Could Mirror China’s P2P Lending Crisis, Asset Manager Warns
The rapid expansion of tokenisation is exciting investors and innovators around the world, but a senior Chinese asset manager has cautioned that without clear standards and responsible oversight, this trend could fall into the same destructive pattern as China’s past peer-to-peer lending crisis. Tokenisation has the potential to reshape how real-world assets are traded and accessed, but it also creates opportunities for unqualified actors to exploit public interest. According to CG Zhou, founder and CEO of CPIC Investment Management in Hong Kong, the industry must balance innovation with discipline to avoid repeating historical mistakes.
Alarm over multilevel marketers entering the space
Speaking during a panel discussion on Thursday, Zhou said he has observed worrying signs over the past year. Some multilevel marketing companies on the mainland have begun organizing meetings to promote real-world asset tokenisation projects. Their growing involvement raises what Zhou described as “genuine concerns” about the direction of the industry. Tokenisation requires strict governance, accurate asset backing, and transparent processes. When groups with questionable business practices enter this space, they risk misleading participants and undermining legitimate financial innovation.
Understanding the risk of multilevel marketing models
Multilevel marketing companies rely on networks of independent distributors who earn commissions from their own sales and from the sales made by people they recruit. These models have been criticized worldwide, often for promoting overpriced products, exaggerating potential returns, or encouraging aggressive recruitment tactics. Participants frequently face financial loss from startup fees, unsold inventory, and unrealistic expectations. If such companies begin pushing speculative tokenisation projects, the threat to ordinary consumers could grow quickly.
Lessons from China’s P2P lending collapse
China’s P2P lending crisis remains a painful reminder of what happens when financial innovation grows faster than regulation. What initially looked like a promising alternative lending ecosystem quickly spiraled into fraud, mismanagement and mass investor losses. Millions of people were affected when platforms collapsed, and the economic and social fallout took years to stabilize. Zhou’s warning suggests that in the absence of proper standards, the tokenisation boom could follow a similar cycle of uncontrolled expansion, risky promotion and eventual disruption.
Tokenisation still holds enormous potential
Despite the warnings, Zhou emphasized that tokenisation brings real value when done correctly. It can increase liquidity for real world assets, reduce settlement times, improve transparency and open investment opportunities to a wider audience. Institutions around the world are exploring how blockchain technology can streamline trading infrastructure and make financial markets more efficient. However, for these benefits to be realized, the industry must commit to clear frameworks that protect both investors and the market’s long term credibility.
Need for standards and responsible leadership
Zhou argued that the tokenisation industry must establish strong standards to guide responsible development. He stressed the importance of credible players taking the lead, whether they are regulated financial institutions, reputable asset managers or licensed technology providers. Clear rules around asset verification, investor protection and market conduct will be crucial in preventing misuse. A disciplined approach can help the industry grow sustainably while maintaining public trust.
Safeguarding innovation from harmful actors
Tokenisation is still in its early stages, meaning it is particularly vulnerable to opportunistic actors who see hype as a chance for quick profit. Zhou warned that multilevel marketers promoting complex financial products could misrepresent risks or oversell potential returns. The financial losses faced by participants in previous unsupervised schemes show how dangerous this can be. Protecting the public requires proactive measures from regulators, industry associations and responsible corporate leaders.
A call for careful but confident progress
While risks exist, Zhou believes the tokenisation trend should not be abandoned. Instead, it should be guided carefully. The industry is on the verge of unlocking huge opportunities for global markets, especially in real estate, trade finance, commodities and other sectors where asset digitization can bring significant efficiency gains. The challenge is ensuring that this progress does not become overshadowed by the same unchecked behavior that caused past crises.
The path toward a safer tokenised future
To move forward, Zhou suggested that market participants must emphasize transparency, proper communication and professional standards. The goal is to build a tokenisation ecosystem that encourages innovation while avoiding the pitfalls of unregulated enthusiasm. If the industry succeeds in setting high standards early, it can pave the way for a future where tokenised assets become a trusted part of global finance rather than another cautionary tale.
