Compliance Challenges and Path Exploration for RWA Projects

At the beginning of 2025, Hong Kong has already released two major pieces of news: first, the Asia-Pacific region's first retail tokenized fund has been established in Hong Kong; second, the Hong Kong Financial Secretary announced that a new virtual asset development policy declaration will soon be released, further exploring the innovative integration of traditional assets and virtual assets.

These positive news are widely regarded as an important sign of the compliance of RWA projects. Combined with the news that the first agricultural RWA project "Maluzhu Grape" successfully raised 10 million at the Shanghai Digital Asset Exchange, RWA tokenization seems to be moving from the conceptual stage to actual implementation. Whether it is asset parties, intermediary service providers, or primary investors, all are actively carrying out related work, and there are almost daily discussions and project consultations.

Recently, there has been a surge in demand for the implementation of RWA, involving a wide range of underlying assets, including bonds, gold, rare metals, non-performing assets, agricultural products, property rents, bulk commodities, digital copyrights, fan economy, and more.

As the in-depth discussions on various projects progress, the project parties will ultimately return to a few core issues:

• Is the project suitable for RWA?
• What kind of projects are most suitable for RWA?
• What are the requirements for RWA regarding underlying assets? Are all real assets eligible?
• What type of token is being issued? Is it a shitcoin?
• Do investors in the cryptocurrency world have the motivation to invest in assets that are physically anchored?

This article will attempt to analyze these issues in conjunction with practical experience.

First, we conclude that the RWA path that can generate the maximum value and is most suitable should be in the form of mainland assets + data compliance for outbound transactions + raising overseas funds, achieving controllable assets, trustworthy data, and fund raising.

1. Definition and Characteristics of RWA

RWA is the abbreviation for Real-World Assets Tokenization (, which refers to the packaging of various assets' value, operations, income, and other data from the real world and storing them on the blockchain to form digital tokens ), which are then issued for financing and traded on-chain to investors.

RWA has the following characteristics in financing:

( 1. Based on underlying assets

RWA is centered around underlying assets, rather than air coins. This type of token can be referred to as Asset-Backed Token ) Asset-Backed Token, ABT ###.

The financing behavior of RWA mainly relies on the evaluation of the underlying asset value, rather than the long-term profitability of the enterprise. As long as the batch of assets owned by the enterprise has value and potential, it can achieve packaged on-chain financing. This brings more possibilities for enterprises.

Assets suitable for RWA typically have the following characteristics: high value, superior quality, a need to enhance liquidity, and reduced investment thresholds. Common types of RWA projects include:

• Stablecoins: Issued with backing from fiat currency or cash equivalents, such as USDT and USDC.
• Bonds and Stocks: Tokenizing traditional financial assets to enhance liquidity and market access, such as USYC.
• Real Estate: Lower the investment threshold in real estate through tokenization, such as RealT.
• Commodities: Such as carbon credit certificates, precious metals and other physical assets, for example PAXG which is pegged to gold.

( 2. Financing Rate

RWA leverages blockchain technologies such as smart contracts to fully digitize the financing process on-chain, forming the structuring and standardization of data. From asset evaluation, token issuance to fundraising, the financing speed can be significantly enhanced by combining the public transparency and traceability characteristics of blockchain.

) 3. Asset Liquidity

RWA tokenizes, fragments, and internationalizes real-world assets through blockchain technology, greatly enhancing asset liquidity. For example, a property worth 50 million can be divided into 1 million fragments, lowering the investment threshold. This is akin to equipping enterprise assets with "wheels" that everyone can move, allowing them to flow quickly in the market. Better liquidity also offers investors the possibility of a quick exit, increasing their willingness to invest.

Although the price of tokens may be affected by fluctuations in secondary market sentiment, the value of the underlying assets provides a relatively stable benchmark.

2. Challenges Faced by Enterprises in RWA

Although the prospects for RWA are enticing, successful cases among mainland enterprises are still few and far between. They mainly face two major challenges:

1. Compliance challenges

Mainland China clearly prohibits virtual currency financing trading platforms from exchanging, buying, or selling virtual currencies or providing pricing services. Therefore, Compliance is the primary consideration for RWA projects.

Mainland enterprises must plan a complete compliance path: tokens cannot be issued within the territory, underlying assets can be either domestic or overseas, and the entire project can be linked domestically and overseas or conducted only overseas, to meet the compliance requirements for issuing tokens.

For cross-border projects, the first step is to achieve asset financialization. This is because RWA projects must be linked with the regulations of various jurisdictions. If the products are not linked to standardized financial products ### such as stocks, bonds, and fund shares ###, it will affect the legal exercise of rights by enterprises. In a global environment where digital regulation is not well developed, the legitimacy of RWA relies on its adaptation to traditional legal frameworks. Only after asset financialization can corporate assets be tokenized through smart contracts.

( 2. Investor Attractiveness

After the token issuance, how to generate value and attract investors is a key pain point. To deeply understand this issue, we need to grasp some basic knowledge of digital currencies.

Commonly seen digital currencies on the market, such as BTC, altcoins, and air coins, mainly differ in their underlying mechanisms. With the development of technology, the threshold and cost for issuing tokens are continuously decreasing. In the Web3 era, issuing coins can be quickly completed through standardized protocols such as ERC-20).

The difficulty of issuing tokens is not high, especially listing on exchanges ###, and on-chain circulation ( is relatively easy to achieve. However, recently companies are more focused on how to list tokens on compliant exchanges.

A compliance exchange refers to an exchange that has obtained a virtual asset trading license in its registered location, as well as an exchange that maintains a neutral stance on virtual asset regulatory policies in its registered location. As the global cryptocurrency regulatory framework becomes increasingly clear, the definition of "compliance" will become more and more precise.

The core issue faced by RWA tokens after entering the secondary market is: who will invest in such tokens?

Investors willing to purchase RWA tokens need to meet two conditions simultaneously: purchasing motivation + being a ) overseas ( compliant investor.

Unlike investors in the Web3 world who pursue high returns, RWA tokens are relatively stable in value due to their linkage with real assets, with limited appreciation potential. Investors need to be interested in the assets themselves to participate. At the same time, exchanges typically set access thresholds for investors to protect them.

The combination of these two conditions greatly narrows the scope of potential investors.

3. Path to Implementation of RWA Projects and Corporate Preparation

) 1. Initial screening of feasible RWA projects

Enterprises should fully understand their asset situation, determine the underlying assets, and ensure that the underlying assets are linked to the enterprise's operations. This requires enterprises to have cross-disciplinary talents who understand both enterprise operations and asset characteristics, as well as the dynamics of Web3. RWA is a comprehensive project that spans across industries, finance, and digital spheres, requiring talents who are proficient in both internal and external aspects.

( 2. Technology and Compliance First, Preemptive Dual Risks

After the initial screening is completed, it is necessary to conduct in-depth research on the RWA scheme, including designing the token economic model, developing the technical architecture, formulating data collection methods, assessing cost cycles, and planning the Compliance path, etc. Due to the nature of enterprises and differences in assets, the compliance requirements for commodity operation and circulation vary across regions, and it is necessary to prioritize technical and compliance risks.

) 3. Project execution and landing, completing first-level market fundraising.

The core objective of the execution phase is to help enterprise projects land. This specifically includes in-depth due diligence, writing white papers, developing and deploying smart contracts, drafting legal documents, connecting with resource providers throughout the entire process of RWA projects, and ultimately achieving asset tokenization.

( 4. As planned, carry out secondary market circulation and subsequent operation management.

Combining policies, corporate needs, and investor changes, assist enterprises in completing secondary market circulation. Provide customized investment and financing legal documents, real-time regulatory policy tracking, and dynamic compliance adjustment plans.

) 5. Community contact and promotion, continuously providing comprehensive consulting

Assist enterprises in designing and executing community operation plans, connecting media and KOL resources, and adjusting communication strategies. Monitor and optimize operational processes, such as regularly reporting on asset on-chain rates and implementing market value management strategies.

4. About Us

We are a professional Web3 legal services team, affiliated with Beijing Yingke ### Shanghai ### Law Firm. The team has extensive practical experience in blockchain technology compliance, legal regulation of digital assets, cross-border investment and financing structure construction, and legal consulting in emerging technology fields.

Our team consists of legal compliance experts, traders and strategic advisors, blockchain technology experts, and financial industry specialists, capable of providing enterprises with professional services throughout the entire process of RWA projects.

We have experience with multiple complete RWA instances, including the bond tokenization project of a Hong Kong bond company, the NFT-RWA trading system design for a South Korean fashion platform, and the RWA scheme for oil products of a Malaysian refinery company.

As one of the few professional Web3 teams on the market with complete experience in RWA instances, capable of accurately grasping enterprise pain points and needs, and providing one-stop full-port, full-link services, we are confident in providing strong support for the successful implementation of enterprise RWA projects.