Decoding the characteristics of mainland China RWA: Practical characteristics, risk analysis and optimization path

Authors of this article: Shao Jiaio and Liu Honglin

If you were still lamenting last year that RWA was just a high-end game played by overseas financial institutions, then this year you may have heard the word "RWA" in cultural exchanges, farms, and even liquor factories.

RWA projects in mainland China no longer pursue traditional US Treasury bonds or commercial real estate, but have taken a different approach and embarked on the "local life" route. Think about it: Malu Grapes, Airport VIP Room, Liquor Pickup Right... It sounds no longer cold, but with a bit of romance and down-to-earth practicality of explorers.

Next, let’s talk about how this group of “light and beautiful” mainland RWAs danced this new dance between blockchain and the real economy, and what invisible risks are hidden?

Current Situation and Innovation Practice of RWA in Mainland China

1. Asset type: "lightweight" attempt to integrate consumer rights and

industries

In the mainland, RWA no longer sticks to traditional financial assets that are high-frequency trading, but aims at consumption scenarios that are closer to life. You may see that the airport VIP room service is made into tokens, and the user's hands are no longer abstract digital currency, but the actual rights that can be exchanged for a cup of coffee and a waiting seat. For example, the Malu Grape RWA project is actually quite interesting - it makes the pick-up right of grapes into a token, and investors are not buying bonds or equity, but expecting "whether farmers can grow good grapes this year." This model not only closely combines traditional agriculture and blockchain technology, but also exposes a problem: if the weather was bad and the output declined back then, how should the value behind the token be calculated? This gives people the feeling that "there is inevitably a vague area behind innovation".

2. Technical path: Exploration of alliance chains under semi-closed

ecology

Most RWA projects in the mainland choose to use private chains or alliance chains, and trading platforms are often limited to the Cultural Exchange or Digital Exchange. This has an advantage: the data is in your own hands and the regulatory authorities are more likely to intervene; but on the other hand, it has lost the free interconnection and liquidity of the global public chain. Take "Wine Domain Spirit Realm" as an example. It relies on the alliance chain of border intelligence to issue "Wine Certificates", and transactions are strictly limited to specific platforms. This is like an exquisite tavern. Although it tastes good, it is difficult to compete with international brands of star-rated hotels.

3. Compliance Framework: The “Gray Zone” of Regulation and Technical

Arbitrage

At present, the mainland has not issued special regulations or regulatory policies for RWA, and many projects can only use the beautiful banner of "equity certificates" to try to avoid the risks identified as securities. However, everyone knows that "regulation is not a fool". Even if you say "no profit promises", as long as the user thinks that "it will rise" in his mind, he may go to the brink of "traveling the edge" or even "disguised attractions". Many project parties have also said confidently, "We are not securities, users can only operate within the platform and cannot trade." But the reality is that users will always secretly find someone to hedge risks outside the market, so that the clues obtained by the regulatory authorities will never be easily let go.

Full analysis of the compliance risks of RWA specialized in mainland

China

The RWA project in the mainland is like a hot stir-frying dish. It tastes good but the heat is not well controlled and it is easy to get into trouble.

1. Asset rights confirmation——The hidden worries of the “gray zone”

Take the artwork RWA as an example. Some projects will use a "digital appraisal certificate" to show their ownership proof, but the problem is: if the data behind the certificate is fake or the appraisal is incorrect, the blockchain cannot roll back. It's like you went to a supermarket to buy a bottle of "real copycat" Coke. No matter how beautiful the label is, it cannot cover up the inferior quality of the actual taste.

2. Securities attributes - Is it really safe to play "edge ball"?

The operation method of many projects is: "We are just equity certificates, not securities!" But as long as you give users the expectation that "will rise", even if you clearly say that they will not allow transactions, users will entertain themselves off-site. What do the regulatory authorities think? Just use "disguised storage" to condom. As I often say, surface avoidance does not mean there is no risk, the supervision eyes are sharp!

3. Cross-border data and privacy protection——The real problem of

"double attack"

Some RWA projects involve overseas investors, and the cross-border transmission of personal information and transaction records must be strictly implemented in accordance with the "Personal Information Protection Law". But in reality, many projects lack compliant data channels, and many alliance chains even lead to user data leakage due to improper node permissions. Imagine that when you think that data is stored safely, there are hidden dangers of privacy leakage behind it. This is really a double blow.

Comparison with mature overseas projects: innovation and gap coexist

1. Asset selection logic: the depth of financialization coexist with

innovation

Overseas RWA projects are mostly mainly "hard assets", such as treasury bonds, real estate, supply chain accounts receivable, etc., with clear value anchorage and stable cash flow. For example, Ondo Finance in the United States achieved stable returns through tokenization of treasury bonds, while RWA in Hong Kong relies on physical equipment data to improve transparency. In contrast, mainland projects tend to be "soft assets" such as consumer rights and agricultural products, and their financialization is insufficient, but their social value in small financing and inclusive finance (such as supporting farmers' financing) is worthy of recognition.

2. Technical standardization and data credibility

The Hong Kong Monetary Authority promotes the compliance development of digital assets through the Ensemble project sandbox, emphasizing data credibility and transparency, and the underlying data is mostly on-chain in real time through IoT devices. Many data in the mainland are mainly manually entered, which inevitably makes people worry about the risk of data being tampered with.

3. Cooperation between market maturity and regulation

Hong Kong has formed a three-in-one compliance framework of "regulatory sandbox-industry standards-judicial collaboration". For example, the charging pile RWA project jointly developed by Ant Digital Technology and Langxin Technology achieves compliance docking between mainland assets and overseas funds through the Hong Kong SPV structure. Mainland projects are limited by poor foreign exchange control and regulatory communication, and market maturity still needs to be improved.

Optimization path: How to embark on a "compliance and self-discipline"

RWA path?

To enable the mainland RWA projects to truly develop a path of sustainable development, we must open up links in supervision, technology and market ecology.

1. Establish a "classified supervision" framework

For RWA projects that are just redemption services and are similar to membership system, such as airport VIP rooms or grape pick-up rights, you can take the path of "consumer product supervision" - clearly define the scope of service and the boundaries of responsibility. On the contrary, for RWA with obvious returns, we must refer to securities standards and adopt the "securitization sandbox" to ensure that information disclosure, KYC and AML are in place. In this way, you are not afraid of supervision, and supervision will not seek fault for no reason.

2. Promote the combination of technical standards and judicial evidence

storage

The physical asset-turning project is mandatory to adopt the dual-channel verification of "IoT+Blockchain" to allow the data to be first stored and then turned on to ensure that each data is verified. At the same time, we support the local courts to explore the "on-chain evidence" acceptance rules and lower the threshold for user rights protection.

3. Explore the compliance path of "domestic assets-offshore financing"

Learn from the model of Hong Kong Langxin Technology, the issuance of RWA tokens through Hong Kong SPV, the introduction of foreign capital through regulatory sandboxes, and cooperate with the State Administration of Foreign Exchange to pilot the "RWA Cross-border Financing White List" to simplify the approval process for funds remittance. This will not only broaden financing channels, but also ensure process compliance, so as not to repeat the mistakes of P2P.

Summary of Lawyer Mankun

There is no unified answer to how to take the RWA path in the mainland. Judging from the projects we have seen so far, "no finance, no securities, only services" is not a panacea. If you just "pretend to be stupid" for compliance, you will never escape the heavy blow of supervision; if you really want to run out of projects, you must finally be clear: Are you self-disciplined for long-term development or are you playing for short-term financing? Today may be grapes and liquor, but if it becomes "RWA version of P2P" tomorrow, the entire industry will have to start over again.

To sum up, mainland RWA projects have unique advantages and practical value in the exploration of "light assetization" and "localization", but they still have many shortcomings in asset rights confirmation, technical standards, regulatory cooperation, etc. Only through the triple breakthrough of "technical standardization + regulatory sandbox + cross-border collaboration" can we stand out in the fierce market competition and truly realize the ideal of empowering the real economy with blockchain.