Opportunities and Challenges of RWA Projects: From Concept to Implementation

Recently, two important pieces of news were released in Hong Kong: the first retail tokenized fund in the Asia-Pacific region has landed in Hong Kong, and the Financial Secretary of Hong Kong announced that the second "Hong Kong Virtual Asset Development Policy Declaration" will be released soon. These announcements are seen as significant progress in the compliance of RWA projects. Combined with the news that the first RWA project in the agricultural sector on the mainland has successfully raised funds at the Shanghai Digital Asset Exchange, RWA tokenization seems to be moving from the conceptual stage to the implementation stage.

Currently, all parties are actively carrying out work related to RWA, with a surge in project discussions and inquiries. The underlying assets involved are diverse, including bonds, gold, rare metals, non-performing assets, agricultural products, property rents, bulk commodities, digital copyrights, fan economy, and many other fields.

However, as the project verification deepens, many project parties will return to several fundamental questions: Is the project suitable for RWA? What type of project is most suitable? What are the requirements for the underlying assets in RWA? What is the nature of the issued tokens? Do cryptocurrency investors have an investment enthusiasm for physically-backed assets?

Based on practical experience, the most suitable RWA path is: mainland assets + data compliance for outbound + raising overseas funds, achieving controllable assets, trustworthy data, and fund-raising.

Understanding and Characteristics of RWA

RWA(Real-World Assets Tokenization) refers to the process of packaging and storing the value, operation, income, and other data of real-world assets on the blockchain, forming digital tokens for issuance, financing, and trading on the chain.

RWA has the following characteristics:

1. Focused on underlying assets, suitable for projects with high value, excellent quality, that need to improve liquidity and lower investment thresholds.

2. The financing speed is fast, achieving full-process digitization with the help of blockchain technology.

3. Improve asset liquidity by tokenization, fragmentation, and internationalization to lower investment thresholds.

Challenges Faced by Enterprises

1. Compliance Challenges

Mainland China prohibits virtual currency-related businesses, and companies need to plan a compliance path. Cross-border projects must first achieve asset financialization and be linked to standard products to adapt to the existing legal framework.

2. Investor Attraction

RWA tokens are anchored to assets, with relatively stable value, making it difficult to achieve explosive growth. Investors need to be interested in the underlying assets and meet the qualifications for overseas investors, which greatly narrows the scope of potential investors.

RWA Project Implementation Process

1. Initial screening of feasible projects to determine underlying assets.

2. Design scheme, assess technical and compliance risks.

3. Project execution implemented, completing the primary market fundraising.

4. In planning, achieve circulation in the secondary market.

5. Community operation and continuous optimization.

Companies need cross-domain talents who understand business operations, asset advantages, and the Web3 operating model.

Conclusion

The RWA project integrates physical assets, financial innovation, and blockchain technology, requiring expertise and experience from multiple fields. When enterprises explore RWA, they should fully assess their own conditions, develop reasonable plans, and pay attention to compliance risk management to achieve the sustainable development of the project.