Mankiw Research | Decoding the Unique RWA Characteristics of Mainland China: Practical Features, Risk Analysis, and Optimization Pathways

If you were 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 the cultural exchange market, farms, and even in liquor factories. RWA projects in mainland China have long ceased to chase traditional US Treasury bonds or commercial real estate, instead opting for a different path by embracing the "local life" approach. Just think about it: Malu grapes, airport VIP lounges, liquor pickup rights... it sounds no longer cold, but rather infused with a bit of the explorer's romance and grounded practicality. Next, let's talk about this group of "light and beautiful" domestic RWAs, and how they are performing this new dance between blockchain and the real economy, as well as the hidden risks that lie beneath. The Current Situation and Innovative Practices of RWA in Mainland China

1. Asset Type: A "lightweight" attempt at integrating consumer rights and industry. In mainland China, RWA is no longer limited to traditional financial assets for high-frequency trading, but aims at consumption scenarios that are closer to everyday life. You might see airport VIP lounge services being tokenized, where users no longer hold abstract digital currencies, but actual rights that can be exchanged for a cup of coffee or a waiting seat. For example, the Malu grape RWA project is quite interesting—it turns grape pickup rights into tokens. Investors are not buying bonds or equity, but rather the expectation of whether the farmers will be able to grow good grapes this year. This model closely integrates traditional agriculture with blockchain technology, but it also exposes a problem: if the weather is bad that year and production declines, how is the value behind the tokens calculated? This gives a sense of "innovation inevitably has its gray areas."
2. Technical Path: Exploration of Consortium Blockchain under Semi-Closed Ecosystem Most of the RWA projects in the mainland choose to use private chains or consortium chains, and trading platforms are often limited to the cultural exchange market or the digital asset exchange. The advantage of this approach is that data is kept in-house, making it easier for regulatory authorities to intervene; however, on the other hand, it loses the freedom of interconnectivity and liquidity that comes with global public chains. Take "Jiu Yu Ling Jing" for example, it issues "Jiu Zheng" based on the consortium chain of boundary intelligence, with trading strictly limited to specific platforms. This is akin to a fine small tavern, which, although the taste is good, finds it hard to compete with the international brands of star-rated hotels.
3. Compliance Framework: The "Gray Area" of Regulation and Technical Arbitrage At present, there are no specific regulations or supervisory policies in mainland China for RWA, and many projects can only flaunt the banner of "equity certificates" in an attempt to evade the risk of being classified as securities. However, everyone knows that "regulators are not fools"; even if you superficially claim "no profit commitment," as long as users think "it will rise," they may walk the fine line or even the edge of "disguised fundraising." 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. A Comprehensive Analysis of RWA Compliance Risks in Mainland China The RWA projects in the mainland are like a hot stir-fry; they taste good, but if the heat is not controlled properly, things can easily go wrong.
4. Asset Certainty - Concerns in the "Gray Area" Take RWA art pieces for example, some project parties will use "digital certification certificates" to boast their ownership proof, but the problem arises: if the data behind the certificate is fabricated or there are errors in the appraisal, the blockchain cannot be rolled back. It's like when you go to the supermarket and buy a bottle of "genuine counterfeit" cola; no matter how beautifully the label is written, it cannot hide the poor quality of the actual taste.
5. Securities Attributes - Is Playing "Close to the Edge" Really Safe? Many projects operate with the approach: "We are just providing rights certificates, definitely not securities!" But as long as you give users the expectation that the value 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 bodies view this? They directly label it as "disguised fundraising." As I often say, superficial avoidance does not mean there is no risk; regulatory oversight is keen!
6. Cross-border Data and Privacy Protection - The Real Dilemma of "Double Whammy" 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. However, in reality, many projects lack compliant data channels, and there are even quite a few consortium blockchains that have led to user data leaks due to improper node permissions. Imagine that while you think your data is securely stored, there are hidden risks of privacy breaches behind the scenes; this is truly a double blow. Compared with mature overseas projects: Innovation coexists with gaps
7. Asset selection logic: The depth of financialization coexists with innovation Overseas RWA projects mainly focus on "hard assets" such as government bonds, real estate, and accounts receivable in supply chains, which have clear value anchoring and stable cash flows. For example, Ondo Finance in the United States achieves stable returns through the tokenization of government bonds, while the RWA for charging stations in Hong Kong relies on data from physical equipment to enhance transparency. In contrast, mainland projects tend to lean towards "soft assets" like consumer rights and agricultural products, with insufficient depth in financialization; however, their social value in micro-financing and inclusive finance (such as supporting farmer financing) is commendable.
8. 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 on-chain in real time via IoT devices. In contrast, much of the data in the mainland still relies mainly on manual input, which inevitably raises concerns about the risk of data tampering.
9. Market Maturity and Regulatory Cooperation Hong Kong has formed a three-in-one compliance framework of "regulatory sandbox - industry standards - judicial collaboration." For example, the charging pile RWA project in collaboration between 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 the market maturity still needs to be improved. Optimizing the Path: How to Forge a "Compliance and Self-Discipline" Road for RWA? To truly pave a sustainable path for RWA projects in the mainland, it is essential to streamline the connections in regulation, technology, and market ecology.
10. Establish a "Categorized Regulatory" Framework For those RWA projects that are just exchange services, similar to membership systems, such as airport VIP lounges or grape picking rights, they can completely take the "consumer goods regulation" route—clearly outline the scope of services and the boundaries of responsibilities. On the other hand, for RWA with obvious income rights, they should refer to securities standards and follow the "securitization sandbox" to ensure that information disclosure, KYC, and AML are all in place. In this way, you won't fear regulation, and regulators won't find fault without reason.
11. Promote the integration of technical standards and judicial evidence preservation It is mandatory for physical asset on-chain projects to adopt the "IoT + Blockchain" dual-channel verification, allowing data to be first certified by judicial appraisal 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 rules for the acceptance of "on-chain evidence," lowering the threshold for users to protect their rights.
12. Explore the compliance path of "Domestic Assets - Offshore Financing" By referencing the model of Hong Kong Langxin Technology, issue RWA tokens through a 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 capital repatriation approval process. This can both broaden financing channels and ensure compliance with processes, avoiding a repeat of the pitfalls of P2P. Mankiw Lawyer Summary There is still no unified answer on how to navigate the RWA path in Mainland China. From the current projects observed, "not financial, not securities, only services" is not a panacea. If you are just playing dumb for compliance, you will ultimately struggle to escape the heavy hand of regulation; projects that truly want to break out need to clarify one point: are you self-disciplined for long-term development or are you gambling for short-term financing? Today it may be grapes and white wine, but if tomorrow it turns into "RWA version of P2P", the entire industry will have to start over. 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 confirmation, technical standards, and regulatory cooperation. Only through the triple breakthrough of "technical standardization + regulatory sandbox + cross-border cooperation" can we stand out in fierce market competition and truly realize the ideal of empowering the real economy with blockchain.

/ END. Author of this article: Shao Jiadian, Liu Honglin