RWA: A Rising Star in the Wave of Financial Innovation

The tokenization of global assets is accelerating. According to data platform statistics, as of April 2025, the total value of on-chain RWA assets has exceeded $22 billion. Deloitte predicts that the tokenized real estate market will reach $4 trillion by 2035.

In this wave of financial innovation, Hong Kong has become a pioneer in the compliant development of RWA due to its institutional advantages. From the tokenization of charging pile assets to Asia's first compliant tokenized fund, several benchmark cases have successfully landed, confirming the enormous potential of this innovative financing method in the field of real assets.

The essence of RWA

RWA(Real World Assets) refers to the mapping of physical or financial assets onto the blockchain through blockchain technology, converting them into highly liquid and divisible digital tokens. This process not only realizes asset digitization but also grants assets unprecedented transparency and traceability.

From a legal compliance perspective, RWA is a broad concept with no standard answer. All processes that achieve asset tokenization through blockchain can be referred to as RWA.

Advantages of RWA

1. Revitalize traditional hard-to-reach heavy assets

RWA makes it easier to obtain financing for heavy assets such as real estate and infrastructure revenue rights, providing enterprises with a new "self-financing method." At the same time, it lowers the investment threshold, allowing more small and medium-sized investors to participate.

2. Reduce financing costs and improve efficiency

Compared to traditional securities issuance, RWA avoids lengthy reviews and cumbersome procedures, effectively reducing financing costs.

3. Customized Trading Structure

Enterprises can design profit distribution and redemption mechanisms based on their needs to improve the targeting of financing.

4. Separation of Asset Credit and Company Credit

Even if the issuer's credit is average, as long as the underlying assets are of high quality, financing can still be successfully achieved.

5. Forming an On-Chain Ecosystem

The RWA market has a rich variety of participants, forming an active ecosystem and community that supports the growth of token value. A prosperous on-chain ecosystem can also benefit the offline business development of project parties.

Hong Kong RWA regulatory framework

The Hong Kong Securities and Futures Commission adopts the "perspective principle", focusing on the financial attributes of underlying assets rather than the form of tokens. The main regulatory documents include:

1. November 2023 Circular on Tokenized Investment Products Approved by the Securities Regulatory Commission
2. November 2023 Circular on Activities Related to Tokenized Securities Conducted by Intermediaries
3. March 2024 Monetary Authority "Ensemble Project"

These documents clarify the specific regulatory standards for RWA product (, especially for tokenized securities ), providing guidance for market development.

Compliance points for mainland enterprises to conduct RWA in Hong Kong

Due to the ban on token issuance in mainland China, RWA projects must issue tokens overseas. Hong Kong has become an ideal choice. Mainland enterprises need to consider compliance from the following three aspects:

1. Compliance of underlying assets

• Asset Verification: Ensure clear and legal ownership of assets
• Asset Audit: Hire professional institutions to assess asset value, risks, etc.
• Asset divestiture: Achieving risk isolation of assets from the operating entity through SPV.

2. Compliance of Data on the Blockchain

• Adopting the "two chains and one bridge" model: domestic alliance chain for proof storage, overseas public chain for token issuance, mapped through a cross-chain bridge.
• Or use the Hainan Free Trade Port cross-border data flow pilot zone to complete the cross-border data on-chain.

3. Compliance of Fund Flow Design an overseas fund collection and circulation framework, with common fund channels including QFLP, FDI, and QFII.

When designing the architecture, it is necessary to comprehensively consider factors such as taxation, entry barriers, and compliance costs, and to pay attention to compliance first.