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

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 art exchanges, farms, and even liquor factories.

Mainland China's RWA projects are no longer chasing traditional U.S. Treasury bonds or commercial real estate, but have taken a different path, pursuing a "local living" route. Think about it: Malu grapes, airport VIP lounges, liquor delivery rights... They no longer sound cold, but rather carry a sense of the explorer's romance and practical groundedness.

Next, let's talk about this group of "light and beautiful" mainland RWAs, and how they are performing this new dance between blockchain and the real economy, as well as 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.

On the mainland, RWA is no longer sticking to traditional financial assets that are traded at high frequency, but is targeting consumption scenarios that are closer to life. You may see that airport lounge services are made into tokens, and users no longer have abstract digital currency in their hands, but can actually exchange for a cup of coffee and a waiting seat. For example, the Malu Grape RWA project is actually quite interesting - it makes the grape pick-up right into a token, and investors are not buying bonds or equity, but looking forward to "whether farmers can grow good grapes this year". This model not only closely combines traditional agriculture and blockchain technology, but also exposes a problem: if the weather is bad and the output declines, how will the value behind the token be calculated? This gives people the feeling that "there is inevitably an ambiguity behind innovation".

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

Most of the RWA projects in the mainland choose to use private chains or alliance chains, and the trading platform is often limited to the cultural exchange or data exchange. This has the advantage that the data is in your own hands, and it is easier for regulators to intervene; But on the other hand, it has lost the free interconnection and liquidity of the global public chain. Take the "Wine Realm Spiritual Realm" as an example, it relies on the alliance chain of boundary intelligence to issue "wine licenses", and transactions are strictly limited to specific platforms. It's like a sophisticated bistro that, although it tastes good, is difficult to compete with the international brands of star hotels.

3. Compliance Framework: The "Gray Area" of Regulation and Technical Arbitrage

At present, there are no specific regulations or regulatory policies for RWAs in the mainland, and many projects can only use the beautiful banner of "equity certificates" to try to avoid the risk of being identified as securities. However, as we all know, "regulation is not a fool", even if you say "no promises of returns" on the surface, as long as users think that "it will rise", it may come to the edge of "marginal ball" or even "disguised absorption". Many project parties have also confidently said that "we are not a securities, and users can only operate on the platform, and there is no way to trade", but the reality is that users will always secretly find someone to hedge risks outside the market, so that the clues obtained by the regulatory authorities will never be easily let go.

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 well, it can easily lead to problems.

1. Asset Confirmation - Concerns in the "Gray Area"

Taking the artwork RWA as an example, some project parties will use the "digital authentication certificate" to advertise their ownership certificate, but the problem is that if the data behind the certificate is falsified or misidentified, the blockchain cannot be rolled back. It's like if you go to the supermarket and buy a bottle of "real copycat" Coke, no matter how beautiful the label is, it can't hide the inferior quality of the actual taste.

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

Many projects operate with the approach: "What we have here is just a rights certificate, definitely not a security!" However, as long as you give users the expectation that it will "rise in value," even if it is clearly stated 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; regulatory eyes are sharp!

3. Cross-border data and privacy protection - The real dilemma of "double whammy"

Some RWA projects involve overseas investors, and the cross-border transfer 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 many consortium chains where improper node permissions lead to user data leaks. Imagine, while you think your data is securely stored, there are hidden risks of privacy breaches lurking behind, which is truly a double blow.

Comparing with mature overseas projects: innovation coexists with gaps.

1. Asset selection logic: The coexistence of financialization depth and 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 anchors and stable cash flows. For example, Ondo Finance in the United States achieves stable returns through the tokenization of government bonds, while the charging station RWA in Hong Kong 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. However, their social value in small-scale financing and inclusive finance (such as supporting farmers' 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 real-time on-chain 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 Collaboration

Hong Kong has established a compliance framework that integrates "regulatory sandbox - industry standards - judicial cooperation". For example, the charging pile RWA project in collaboration between Ant Financial and Langxin Technology achieves compliant connection between mainland assets and foreign 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 "Compliance and Self-Discipline" Path for RWA?

To truly develop a sustainable path for RWA projects in the mainland, it is necessary to address the connections in regulation, technology, and market ecology.

1. Establish a "Categorical Regulation" framework

For RWA programs that are just redemption services, similar to membership, such as airport lounges or grape pick-up rights, it is entirely possible to go the "consumer goods regulation" route – clearly define the scope of services and the boundaries of liability. On the contrary, for RWAs with obvious income rights, it is necessary to refer to the securities standards and go through the "securitization sandbox" to ensure that information disclosure, KYC and AML are all in place. In this way, you are not afraid of regulation, and regulation will not find fault for no reason.

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

It is mandatory for physical asset on-chain projects to adopt "IoT + Blockchain" dual-channel verification, allowing data to be verified by judicial authentication agencies 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 admissibility of "on-chain evidence", lowering the threshold for users to protect their rights.

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

By referencing the model of Hong Kong Langxin Technology, RWA tokens are issued through a Hong Kong SPV, utilizing a regulatory sandbox to attract foreign investment, and collaborating with the foreign exchange administration to pilot the "RWA Cross-Border Financing Whitelist," simplifying the approval process for fund repatriation. This not only broadens financing channels but also ensures compliance with processes, avoiding a repeat of the P2P pitfalls.

Mankiw Lawyer Summary

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, the RWA projects in mainland China have unique advantages and practical value in exploring "light assetization" and "localization," but there are still many shortcomings in asset confirmation, technical standards, and regulatory collaboration. Only through the triple breakthrough of "technical standardization + regulatory sandbox + cross-border collaboration" can they stand out in the fierce market competition and truly realize the ideal of empowering the real economy with blockchain.