Decoding the Characteristics of RWA in Mainland China: Practical Features, Risk Analysis, and Optimization Path

Mainland RWA projects have unique advantages and practical value in the exploration of "light assetization" and "localization", but there are still many shortcomings in terms of asset Equity Confirmation, technical standards, and regulatory cooperation.

Written by: Shao Jiadian, 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 have likely heard the three words "RWA" in cultural trading markets, farms, or even in distilleries.

RWA projects in Chinese mainland have long since moved away from chasing traditional US Treasury bonds or commercial real estate, but have taken a different path and taken the "local living" route. Think about it: Malu grapes, airport VIP lounges, liquor pick-up rights...... It no longer sounds cold, but with a bit of explorer's romance and down-to-earth practicality.

Next, let's talk about this group of "light and beautiful" mainland RWA, how they are dancing this new dance between blockchain and the real economy, and what invisible risks are hidden within?

The Current Status and Innovative Practices of RWA in Mainland China

1. Asset Type: A "lightweight" attempt at the integration of consumer rights and industry

In the mainland, RWA is no longer confined to the traditional financial assets of high-frequency trading, but instead targets consumption scenarios that are closer to everyday life. You may see airport VIP lounge services being turned into tokens, where users no longer hold abstract digital currencies, but actual rights that can be exchanged for a cup of coffee or a boarding seat. For example, the Malu Grape RWA project is actually quite interesting - it turns the grape picking rights into tokens, where investors are not buying bonds or equity, but rather the expectation of whether "the farmers can grow good grapes this year." This model closely combines traditional agriculture with blockchain technology, but it also exposes a problem: if the weather is bad and production declines that year, how exactly is the value behind the token calculated? This gives a sense of "there are inevitably gray areas behind innovation."

2. Technical Path: Exploring Consortium Chains in a Semi-Closed Ecosystem

Most RWA projects in mainland China choose to use private chains or consortium chains, and trading platforms often revolve within cultural and digital exchanges. The advantage of this approach is that data is kept in-house, making it easier for regulatory bodies to intervene; however, on the flip side, it loses the freedom of interconnectivity and liquidity that comes with global public chains. Take the "Wine Domain Spirit Realm" as an example; it issued "Wine Certificates" based on the consortium chain of boundary intelligence, with transactions strictly limited to specific platforms. This is akin to a fine little tavern; although the taste is good, it struggles to compete with the international brands of star-rated hotels.

3. Compliance Framework: Regulatory "Gray Areas" and Technical Arbitrage

Currently, there are no specific regulations or regulatory policies in mainland China regarding RWA. Many projects can only wave the beautiful banner of "Equity Confirmation" in an attempt to avoid being classified as securities. However, everyone knows that "regulators are not fools"; even if you superficially claim "no guaranteed returns," as long as users are thinking "it will rise," it could lead to the edge of "crossing the line" or even "disguised deposit gathering." Many project parties have confidently stated, "This is not a security; users can only operate within the platform and cannot trade," but the reality is that users will always secretly look for someone to hedge risks outside the platform. In this case, the clues obtained by regulatory authorities will definitely not be easily overlooked.

Comprehensive Analysis of RWA Compliance Risks in Mainland China

Mainland RWA projects are like a hot stir-fry: they taste good, but if the heat is not controlled well, it can easily lead to problems.

1. Asset Equity Confirmation — Concerns of the 'Gray Area'

Taking art RWA as an example, some project parties use "digital certification certificates" to claim their ownership proof, but the problem arises: if the data behind the certificate is fabricated or the appraisal is incorrect, the blockchain cannot be rolled back. It's like buying a bottle of "genuine imitation" cola at the supermarket; no matter how beautifully the label is written, it cannot cover up the poor quality of the actual taste.

2. Securities Attributes - Can Playing "Close to the Edge" Really Be Safe?

Many projects operate with the approach: "We are just providing equity confirmation, definitely not securities!" However, as long as you give users the expectation that it "will rise," even if you clearly state that trading is not allowed, users will still entertain themselves in the over-the-counter market. How do regulatory authorities view this? They directly label it as "disguised fundraising." As I often say, superficial avoidance does not mean there is no risk; the regulators are keenly aware!

3. Cross-border Data and Privacy Protection - The Real Dilemma of the "Double Blow"

Some RWA projects involve overseas investors, and the cross-border transmission of personal information and transaction records must strictly comply with the Personal Information Protection Law. In reality, however, many projects lack compliant data channels, and there are even many consortium blockchains where improper node permissions have led to user data leakage. Imagine, while you think the data is safely stored, there is a hidden risk of privacy leakage lurking behind, which is truly a double blow.

Comparison with Mature Overseas Projects: Innovation and Gaps Coexist

1. Asset Selection Logic: Coexistence of Financialization Depth and Innovation

Overseas RWA projects mainly focus on "hard assets" such as government bonds, real estate, and supply chain accounts receivable, which have clear value anchoring and stable cash flow. For example, Ondo Finance in the United States achieves stable returns through the tokenization of government bonds, while Hong Kong's charging pile RWA enhances transparency by relying on data from physical equipment. In contrast, mainland projects tend to lean towards "soft assets" such as consumer rights and agricultural products, with insufficient depth of financialization, but their social value in small financing and inclusive finance (such as supporting farmer financing) is commendable.

2. Technical Standardization and Data Credibility

The Hong Kong Monetary Authority promotes the compliant development of digital assets through the Ensemble project sandbox, emphasizing data credibility and transparency, with underlying data often being recorded in real-time on the blockchain via IoT devices. In contrast, much of the data in mainland China still relies mainly on manual input, inevitably raising concerns about the risk of data tampering.

3. Market Maturity and Regulatory Cooperation

Hong Kong has formed a compliance framework that integrates "regulatory sandbox - industry standards - judicial cooperation." For example, the charging pile RWA project, in collaboration with Ant Group and Longxin Technology, achieves compliant connection between mainland assets and overseas funds through the Hong Kong SPV structure. However, mainland projects are constrained by foreign exchange controls and poor regulatory communication, and market maturity still needs to be improved.

Optimization Path: How to Walk a Path of "Compliance and Self-Discipline" in RWA?

To truly create a sustainable development path for RWA projects in the mainland, it is necessary to break through the barriers in regulation, technology, and market ecology.

1. Establish a "Categorical Supervision" Framework

For RWA projects that are merely exchange services, similar to membership systems, such as airport lounges or grape pick-up rights, it is entirely feasible to take the "consumer goods regulation" approach—clearly define the scope of services and the boundaries of responsibilities. On the contrary, for RWA with obvious income rights, it should refer to securities standards and adopt the "securitization sandbox" to ensure that information disclosure, KYC, and AML are all in place. This way, you won't fear regulation, and regulators won't arbitrarily find fault.

2. Promote the integration of technical standards and judicial evidence preservation

It is mandatory for on-chain projects of physical assets to adopt a "IoT + Blockchain" dual-channel verification, allowing data to be verified by judicial authentication institutions before being put on the chain, ensuring that every piece of data is traceable. At the same time, it supports local courts in exploring the acceptance rules for "on-chain evidence," lowering the threshold for users to defend their rights.

3. Explore the compliance path for "Onshore Assets - Offshore Financing"

By referencing the model of Hong Kong Langxin Technology, issue RWA tokens through Hong Kong SPV, introduce foreign investment using a regulatory sandbox, and cooperate with the foreign exchange administration to pilot the "RWA cross-border financing whitelist," simplifying the approval process for capital repatriation. This can both broaden financing channels and ensure compliance with processes, avoiding a repeat of the P2P fiasco.

Summary by Attorney Mankun

There is still no unified answer to how to go on the road of RWA 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 "play dumb" for the sake of compliance, you will not escape the heavy blow of supervision after all; In the end, you have to be clear about the projects you really want to run: are you self-disciplined for long-term development, or are you gambling for short-term financing? Today it may be grapes and liquor, but tomorrow if it becomes "RWA version of P2P", the whole industry will have to start all over again.

In summary, mainland RWA projects have unique advantages and practical value in the exploration of "light assetization" and "localization", but there are still many shortcomings in areas such as asset Equity Confirmation, technical standards, and regulatory cooperation. Only through the triple breakthrough of "technical standardization + regulatory sandbox + cross-border collaboration" can they stand out in the fierce market competition and truly achieve the ideal of empowering the real economy with blockchain.