Author: Lawyer Shao Jiayi
Recently, the evil wind of RWA (Real World Assets, tokenization of real-world assets) has been blowing wildly in mainland social media. From the blockchain circle to the financial circle, from self-media to investment groups, it seems that overnight, RWA has become synonymous with financial freedom. Various "RWA project parties", "full-case service providers" and "teaching teachers" have sprung up like mushrooms after rain, and they all swear to tell you that RWA is the next outlet, and you will regret it for the rest of your life if you miss it. However, the more lively this circle is, the more smoky it becomes, with people cutting leeks, speculating in the air, and selling anxiety, all mixed up. I really can't help but want to pour a basin of cold water - this circle is now a pot of boiling shit soup, with a few leek leaves floating on the surface, and sickles bubbling underneath.
Today, we will not discuss technical details, but will peel off the emperor's new clothes and talk about the 10 most heartbreaking truths in the RWA circle. Fasten your seat belts and let's get started.
Truth 1: RWA is a financing tool, not a wealth-making myth
When many people hear about RWA, they imagine a scene of getting rich overnight, thinking that throwing any asset onto the blockchain will turn it into a glittering "wealth code". Wake up! The core of RWA is to tokenize real-world assets through blockchain technology and turn them into tradable digital assets. To put it bluntly, it is a financing tool that helps companies revitalize their assets or gives investors more choices. It is not a lottery, nor is it a money printing machine.
Do you think that buying RWA tokens is equivalent to buying "future 100-fold coins"? Don't dream. The profit model of RWA is no different from traditional financial products, relying on the cash flow or appreciation potential of the underlying assets. Those who always shout "Invest in RWA, financial freedom" are most likely trying to cut your leeks. RWA can help companies solve financing problems, but it has nothing to do with the fantasy of ordinary people like you and me to get rich quickly.
Truth 2: Mainland Chinese users can hardly buy legitimate RWAs
If you think that RWA is a "feast that everyone can participate in", then I have to pour the first bucket of cold water on you: truly compliant RWA products, such as those issued in Hong Kong and Singapore, are basically out of reach for mainland Chinese users. Why? Because compliant RWA products must comply with strict financial supervision. The issuer must ensure the identity of the investor, the legal source of funds, and comply with local securities laws, anti-money laundering laws and other regulations.
Hong Kong's RWA products are aimed at qualified investors (professional investors), who must have proof of assets worth several million Hong Kong dollars and must pass strict KYC (know your customer) and AML (anti-money laundering) audits. As an ordinary retail investor in the mainland, you can't even open an account, let alone buy it. Those who shout "everyone can invest in RWA" on WeChat groups and Douyin are not compliant products at all. Most of them are air coins or Ponzi schemes that specifically target your wallet.
Truth 3: Anyone who tells you that you can make money by investing in RWA tokens is just preparing to cut you with a sickle
The most disgusting thing about the RWA circle in the mainland is the "air coins" and "capital pools" running all over the place. The most magical thing now is: a group of people who can't even tell the difference between ABS and REITs have started to teach people how to play RWA. Their rhetoric is surprisingly consistent: "Liquidity explodes after traditional assets are put on the chain", "RWA tokens can be traded globally 24 hours a day", "Holding means enjoying asset appreciation"... Does it sound familiar? This is exactly the same as the slogan "Blockchain subverts everything" during the ICO (initial coin offering) that year. These projects are under the banner of RWA, telling you that you can invest a few thousand yuan to buy their "RWA tokens" and wait for a hundredfold return. Brother, auntie, how can it be so good? These so-called RWA tokens have no underlying asset support at all, and even the white papers are copied, which is pure empty-handed tricks.
What's even more outrageous is that some projects also engage in multi-level distribution and recruit people to return commissions, which is no different from pyramid schemes. You may see high "returns" in the short term after investing money, but that's just the leeks in front feeding the leeks behind. Once the capital plate collapses, your principal will not even bubble up. Don't believe those nonsense that "RWA is the future of blockchain" and "Miss RWA and miss wealth". The real RWA is a serious financial product, not a casino for you to gamble your life.
Truth 4: When companies do RWA, they should look for brokers, lawyers, and accountants, not “middlemen”
Companies that want to do RWA should also keep their eyes open. There is a strange phenomenon in the RWA circle now: a group of middlemen who call themselves "RWA full-case service providers" are more active than brokers, accountants, and lawyers combined. Now there are many "RWA full-case service providers" and "teaching teachers" emerging in the mainland, boasting that they can help you put your assets on the chain, issue tokens, and sell them globally. Haha, most of these people are middlemen, and their job is nothing more than pimping to earn your consulting fees.
To do RWA properly is similar to doing ABS (asset-backed securities) or REITs (real estate investment trusts). You need to find a professional brokerage, lawyer, and accountant. They will help you design the transaction structure, run regulatory approvals, do due diligence and valuation. What can middlemen do? They don't even understand the compliance process. At most, they can give you a big picture and charge you a "service fee". If companies want to do RWA, don't be fooled by these "teaching teachers". Finding a reliable financial institution is the right way.
Truth 5: Not everything can be RWA. Assets that cannot be sold off-chain are useless if they are put on-chain
There is a classic saying in the RWA circle: "Traditional assets have poor liquidity? Put them on the blockchain! After putting them on the blockchain, they can be traded globally!" It seems that any asset thrown on the blockchain can become a hot commodity. Brother, be realistic! How can assets that cannot be sold off-chain be sold on the blockchain? The essence of RWA is asset securitization, and the core is the quality and return model of the underlying assets. If your assets are a mess, such as a pile of unwanted inventory or an office building that cannot be rented out, no one will buy them even if they are on the blockchain. The essence of poor asset liquidity is poor asset quality, and it has nothing to do with whether they are on the chain.
Investors in Hong Kong are not fools. They are smart money. They invest in RWA based on cash flow, risk exposure, and exit mechanism. Your "20% annualized" return model is nonsense. RWA is not magic. The logic of assets on and off the chain remains unchanged. Those who advocate "everything can be RWA" just want you to spend money on trial and error so that they can profit from it.
Truth 6: You don’t have to set up a business entity in Hainan. Data compliance is not that mysterious.
There is also a "metaphysical" operation in the mainland RWA circle: many project parties say that if you want to do RWA, you must set up a main body in Hainan to ensure data outbound compliance. Please, how can it be so exaggerated? Data outbound compliance is indeed required, but national regulations such as the "Measures for Data Outbound Security Assessment" have already established the process. Not all data outbound approval is required. Only cross-border transmission of sensitive data requires filing or security assessment. The compliance requirements for data outbound depend on multiple factors such as the specific data type and outbound scenario. Not all situations require going to Hainan.
What's more, Hainan's special policy is mainly aimed at offshore business in the free trade port, not the only way out for RWA. The core of an enterprise doing RWA is to run through the compliance process, such as finding a lawyer to sort out data compliance plans and communicate with regulators for filing. Don't listen to those who say "you must go to Hainan" or "Hainan is a paradise for RWA". The path to compliance has always been transparent. Why do you need so many twists and turns?
Truth 7: There is basically no secondary market for RWA products in Hong Kong. Global transactions? You’re overthinking it!
There is also a common "myth" in the RWA circle: RWA tokens can be traded globally and have unrivaled liquidity. What is the truth? The Hong Kong SFC is extremely cautious about secondary transactions. Currently, only very limited inter-institutional transactions have been opened to RWA products issued in Hong Kong. Ant Chain's charging pile RWA and Patrol Eagle Group's battery swap cabinet RWA are essentially private placement products, and retail investors cannot even touch the trading interface. Why? Because RWA is essentially a securitized asset, subject to strict financial supervision, and transactions must comply with securities laws and exchange rules.
Do you think that if you buy an RWA token, you can trade it 24 hours a day around the world like Bitcoin? You think too much! The trading partners of Hong Kong's RWA products are usually institutional investors or qualified investors, and retail investors cannot get involved at all. Most of the projects that boast "RWA global circulation" use "blockchain" as a gimmick, but in fact they are just a closed pool of funds. Liquidity? It doesn't exist.
Truth 8: The RWA track is not the wealth code for ordinary people. Don’t be fooled by anxiety marketing
The most annoying thing about the RWA circle is the anxiety marketing all over the screen. "RWA is the future of blockchain", "If you miss RWA, you will miss wealth", "Ordinary people can also make a comeback with RWA", it makes me sick to hear it too much. Brother, RWA is a serious financial track, which combines asset securitization and blockchain technology. What does it have to do with the opportunity for ordinary people to make money?
Those who can really make money from the RWA track are either professional financial institutions or players who understand asset operations. Ordinary retail investors? At most, they can buy some compliant RWA products and get a fixed income, which is no different from buying bonds. Those who advocate that "RWA can make you rich overnight" just want you to pay for their "courses" or "tokens". Don't be kidnapped by anxiety, RWA is not your life-saving straw.
Truth 9: Compliance and supervision are the soul of RWA. RWA without compliance is just a blank check.
The greatest value of RWA lies in compliance and regulation. Without these two, what is the difference between RWA and air coins? Compliant RWA products must have clear underlying assets, transparent transaction structures, and must be subject to review by financial regulators. The reason why Hong Kong's RWA is reliable is that it is strictly regulated by the SFC (Hong Kong Securities and Futures Commission), and investors' rights and interests are protected.
On the other hand, how many of the "RWA projects" in the mainland are truly compliant? Most of them don't even have a white paper. Where are the assets and how do the profits come from? It's all based on words. If you invest money and the project owner runs away, who can you cry to? The soul of RWA is compliance and supervision. "RWA" without these two is just a blank check without any guarantee.
Fact 10: The issuance cost of RWA is not low and may be higher than traditional financing
Finally, many people think that RWA is a "low-cost financing tool", but that is not the case at all. RWA issuance involves asset evaluation, legal due diligence, transaction structure design, blockchain development, and regulatory approval. Which step is free? In total, the issuance cost of RWA may be higher than traditional loans and equity financing.
Especially for small and medium-sized enterprises, if they want to issue RWA, they still have to face high initial investment, such as legal fees, audit fees, and technology development fees. Hong Kong's RWA projects cost millions of Hong Kong dollars, and few mainland enterprises can afford it. So, don't listen to those nonsense that "RWA is the savior of small and medium-sized enterprises". The financing method depends on the company's own situation. RWA is not a panacea.
Conclusion: Wake up, RWA is not your lifeline
This article is not to deny the value of RWA - asset tokenization is indeed a future trend. It makes asset securitization more efficient and transparent, and is indeed a direction for the combination of blockchain and finance. But the problem is that the current circle is too impetuous, too eager for quick success, and too much for the leeks to be fools. The air coins that cut the leeks, the marketing accounts that sell anxiety, and the middlemen who ask for sky-high prices have made a serious financial track a mess.
If ordinary people want to participate in RWA, they can only buy some compliant RWA products and get a steady income, but don't expect to get rich overnight. If enterprises want to do RWA, they should find professional institutions and go through the compliance process, and don't be cheated by "full-case service providers". RWA is not a myth, nor is it a casino. Recognize these 10 truths and don't let your wallet become someone else's leeks.
If after reading this article, you still want to jump into the RWA fire pit, then before you jump, please tell me your wallet key and I will keep it for you.
