Mankiw Research | Insights into the RWA Boom! Where are the market opportunities, and what are the new regulatory trends?

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Every Thursday at 7:30 PM, the tavern opens on time! From investment jargon, entrepreneurial stories, project ups and downs, to hot topic rants, Airdrop traps, and track predictions... we use an AMA format to discuss what you want to hear, with industry experts gathered! No limits on themes, easy chats about Web3! In the face of regulatory policy changes and compliance trends hitting suddenly - don't panic! Senior lawyer Mankun will personally interpret hot regulatory events for you and help you gain insights into trends! This issue of Mankun's Crypto Tavern focuses on the RWA (Real World Assets) craze, discussing the roles across the entire RWA chain, domestic projects, market prospects, regulatory changes, and opportunities for profit with guests. As a bridge between traditional finance and new finance, RWA is attracting global attention. This episode features a strong lineup of guests, covering technical, incubation, strategic, and compliance perspectives, providing listeners with an in-depth and easy interpretation through five questions! The tavern is open, please introduce yourselves, guests! Meg: Welcome everyone to the eighth episode of the Mankiw Crypto Tavern! RWA is a hot topic right now, and we are stepping out of the traditional lawyer's perspective to discuss gold mining opportunities across the entire chain. Each episode, we focus on influential topics, co-hosted by me and Dongdong Robin. Now, let's have our guests introduce themselves, starting with Dr. Beihai! Beihai Doctor: Hello everyone, I am Beihai. I entered the crypto space in 2014 and have been involved in BTC development since the early days, with 11 years of industry experience. I participated in and witnessed the construction of DeFi from 0 to 1, and I am currently focusing on BlockValley, building RWA full-chain liquidity infrastructure. Blockchain infrastructure is gradually merging the boundaries between real and virtual assets, and the future potential is enormous. The project I am involved in, BlockValley, is building a comprehensive liquidity infrastructure for the blockchain, similar to a bridge for cross-chain liquidity of stablecoins. In the future, there may be thousands of stablecoins, and cross-chain liquidity will require support from decentralized protocols. We enable any asset to flow freely through smart contracts, like an on-chain upgrade of Web2 payment settlement. For example, users can settle on-chain assets directly without cross-bank transfers, achieving greater efficiency. In the future, assets will no longer be limited to a single chain or a single Token; 100 stablecoins can flow freely through infrastructure. Crypto Flamboyant Lawyer: Hello everyone, I am the Flamboyant Lawyer. I entered the crypto space with the rise of Bitcoin inscriptions and am active in on-chain investments. My undergraduate degree is not in law, but I was inspired by American TV shows to pursue a legal path. I later studied law in Hong Kong and worked in a court. I am very happy to participate in today's RWA topic and discuss and learn together with everyone. Eliora: Hello everyone! I am Eliora, focusing on Web3 globalization, brand building, and market strategy, and I have participated in several on-chain projects. Today, I am very happy to talk with you about RWA and look forward to sparking ideas! Dr. Zhao: Hello everyone, I am Dr. Zhao. I entered the industry in 2018, focusing on exchange product operations and market development. I have participated in the establishment of multiple exchanges in China, India, and Hong Kong. I am now initiating the RWA Wave Laboratory, believing that RWA is a bridge between traditional finance and new finance, not only a short-term hot topic but also an important long-term track in the crypto space. We provide RWA consulting, legal structuring, and business setup services. Dongdong Robin: I'm Robin, co-hosting the Crypto Pub with Meg. Tonight, we have a diverse lineup of guests with rich backgrounds, and I look forward to in-depth discussions! It's about time, so let's get straight to the point. Q1: In this wave of RWA, what roles and methods are being adopted by Blockchain Valley, Wave Lab, PicWe, and Mankun? Dongdong Robin: The RWA full chain is complex, involving multiple segmented roles. How do BlockValley, RWA Wave Laboratory, PicWe, and Mankun participate in this trend? First, let Dr. Beihai represent BlockValley to share. Beihai Doctor: The implementation of RWA is not only about asset tokenization but also about the transformation of production relations and social relations. The volume of real-world assets far exceeds that of the crypto space and may reach over $16 trillion in the next five years, entering the crypto space will reshape the industry ecosystem. Blockchain returns to the essence of settlement and payment, becoming the underlying infrastructure, similar to the internet TCP/IP protocol. BlockValley is positioned as a connecting hub, linking domestic and overseas, Web2 and Web3, on-chain and off-chain, real and virtual assets. We connect "people, goods, and venues" through consulting, platform incubation, distribution, and issuance, realizing the flow of RWA value. For example, listed companies can use us to put assets on-chain, attract on-chain users, open up a second battlefield, and achieve long-term growth. Dongdong Robin: The pivotal role of BlockValley is impressive. You mentioned the flow of assets across the entire chain, could you elaborate on that? Beihai Doctor: The liquidity of on-chain assets is the core of RWA. Traditional financial assets are restricted by banks or brokers, while on-chain assets achieve decentralized circulation through smart contracts. For example, gold and real estate can be mapped as on-chain certificates, allowing for trading at any time without intermediaries. BlockValley provides infrastructure support to ensure seamless cross-chain and cross-asset flow, reducing trust costs. Dr. Zhao: RWA Wave Lab is a collection of incubators that integrates technology, product, and brand resources to provide RWA services for listed companies and traditional enterprises. We help clients organize equity, legal frameworks, and business logic, assisting in the issuance of RWA projects. RWA is similar to the big data or "Internet +" wave of 2015, where traditional enterprises need to transition from old finance to new on-chain finance. We eliminate cognitive and information gaps, helping enterprises participate in the wave. For example, listed companies in Hong Kong and the US can design compliant RWA solutions through us to attract on-chain funds. Dong Dong Robin: Traditional enterprises do need professional support to enter the market. Next, please let Eliora share about PicWe! Eliora: The concept of RWA is diverse, including stablecoins, securitized assets, etc., with different forms and end goals. PicWe plays the role of an on-chain RWA issuer and solution provider, with the core being the full-chain liquidity infrastructure. We launched the native stablecoin VUSD, supporting cross-chain without bridges, such as issuing RWA assets on the HashKey public chain HSK, allowing users to seamlessly purchase with VUSD, addressing the pain points of on-chain liquidity. RWA needs to meet the convenience of global users for purchasing and the transparency of smart contracts. PicWe supports project parties in achieving full-chain asset circulation through infrastructure and Tokenomics design. Dongdong Robin: The overall blockchain liquidity is indeed a key point for RWA. Crypto flamboyant lawyer: Mankun plays a triple role in the RWA wave:

Concept Popularization: Educate enterprises and regulatory agencies about RWA through live broadcasts, events, and sharing with judicial departments, and answer clients' inquiries on whether they are suitable for issuing RWA.
Legal Services: Design SPV structures to isolate risks for enterprises issuing RWA, recommend offshore registration locations such as Cayman and BVI, and provide support for Hong Kong Compliance framework.
Future Plans: Integrate resources from licensed institutions, technology companies, and consulting firms to create a one-stop RWA incubation service, assisting clients in smooth issuance. Mankun focuses on compliance, connecting enterprises with the on-chain ecosystem. Meg: Let me add something. The law firm has recently received a large number of RWA consultations, and there are three client meetings tomorrow. I am responsible for the front end of commercial law, assessing whether clients are suitable for issuing RWA based on industry experience, distinguishing between real needs and conceptual hype. Before designing the SPV structure, I will evaluate the business logic and collaborate with Wave Lab, BlockValley, and others to provide strong joint services to clients and jointly promote the development of the RWA ecosystem. Dongdong Robin: Our guests cover multiple links in the RWA chain, from infrastructure to incubation, issuance, and Compliance, with diverse participation methods. Q2: Which RWA project in the country is worth paying attention to? Many people are talking about Hainan Huatie RWA, what exactly is it that they are playing with? Dong Dong Robin: What RWA projects are everyone paying attention to recently? The Hainan Huatie RWA has been a hot topic lately, with its Hornet Brother NFT rising from 200 yuan to a floor price of 15,000 yuan, binding three years of brand revenue rights, and the project claims to be a non-financial RWA. What do the guests think? Crypto Hotshot Lawyer: Hainan Huatie is a large-scale infrastructure equipment manufacturing and leasing company. Its NFT is tied to the cash dividends of 50,000 shares of stock rights each year from 2025 to 2027. Users can become brand ambassadors by locking the NFT through a mini-program. RWA digital products cooperate with Wei Art Digital to map the usage rights and operational rights of the equipment, with non-ownership transfer. But its operation carries compliance risks:
Technical deficiency: Rights confirmation is done only through mini-programs instead of smart contracts, lacking on-chain transparency and insufficient protection of user rights.
Regulatory Grey Area: Although it claims to be a non-financial product, it essentially involves securitized returns, similar to US stocks and Hong Kong RWAs, requiring collaboration with licensed institutions (such as brokerages and custodians). Domestic regulators view RWAs as securities, posing significant future risks. Hainan Huatie has a state-owned background and may have "domestic gameplay", but it is not user-friendly. For other RWA projects, I am more focused on traditional finance, such as US stock tokenization projects like Robinhood and xStock. The efficiency of on-chain asset circulation is higher, representing the future trend. Dongdong Robin: The topic of tokenization of US stocks was discussed in the last two episodes of the tavern Space, which is an important branch of RWA. Next, let's have Eliora share! Eliora: I have learned about some domestic listed companies' RWA projects, most of which involve self-buying and self-selling, have not successfully raised funds, and contain heavy speculation, resulting in limited discussion value. The real value of RWA lies in its global influence, financing, and ongoing value creation on-chain, but domestic projects are mostly "Chinese people playing with Chinese people," lacking Crypto Native attributes and have not achieved cross-border circulation or ecological landing. In contrast, projects with greater on-chain arbitrage opportunities are more worthy of attention. Beihai Doctor: There is a disconnect between domestic RWA projects and the on-chain ecosystem. Hainan Huatie targets Web2 users rather than on-chain players, similar to operations of digital collection platforms. Domestic digital collections have been connected to third-party payments and secondary markets due to the NFT ban, endowing them with speculative attributes, but the target is off-chain users rather than on-chain trading. Recently, the A-shares have been hotly discussing RWA, such as SenseTime raising billions for layout, but most are for strategic layout or financing needs, rather than on-chain implementation. The trading volume of on-chain RWA is low; for example, projects like gold on-chain have only about 60 institutional addresses for some holdings, with little participation from retail investors. Public chains like Taigu and IoT are laying out RWA infrastructure, and in the future, as modularity improves, the divide between traditional and on-chain will decrease. Listed companies can attract on-chain users through compliance channels, opening up a second battlefield and forming a virtuous cycle. Dongdong Robin: Meg has recently been in contact with a lot of RWA related consultations. Can you share your views? Meg: I have received a lot of inquiries about RWA and agree with the view that "not all enterprises are suitable for RWA." The Hainan Huatie case is somewhat on the edge, and after discussing with lawyers from law firms, it is believed that its compliance risk is high. However, regardless of whether it is on the edge or not, its Web2 breakout effect is significant. Traditional enterprises and listed companies (such as Hainan Huatie with state-owned background and Hong Kong Coolpad) have attracted market attention due to the announcement of RWA, reflecting the brand effect. Some enterprises cannot afford the compliance costs such as SPV, and choose non-financial RWA, similar to digital collections, focusing on brand premium or pre-sale of delivery rights to improve sales efficiency. These types of projects are mostly subscribed by institutional LP funds and are suitable for small and medium-sized enterprises. From a market perspective, RWA brings brand and commercial value to enterprises, but on-chain implementation needs further exploration. Dr. Zhao: Hainan Huatie's information disclosure is insufficient, currently mostly in the hype stage. RWA can be divided into physical and non-physical categories, and must possess Crypto Native attributes. From a decentralized perspective, RWA is a bridge for the transition from traditional finance to new finance, similar to the transitional period established by the Yuan Dynasty, and there may exist a "second harvesting" of traditional funds on chain users. The evaluation of RWA depends on the completeness of the data on the blockchain for the Internet of Things. For example, projects related to electricity by Ant Group and Longxin Technology (such as charging piles and energy storage) have clear and traceable data, with value potential. In the U.S., RWA for charging piles from SumPower and Charging Point also has a solid foundation. Conversely, physical projects with incomplete data have significant speculative space, but low long-term feasibility. Dongdong Robin: I have also noticed that how to achieve trusted on-chain is a key point for RWA, and data completeness is very important. Q3: What is the market outlook for the RWA market? In which countries, industries, and sectors are the main market opportunities concentrated? Dongdong Robin: What is the scale and prospect of the RWA market? In which countries, industries, and tracks are the opportunities concentrated? Dr. Zhao talked to us about power projects, can you continue to share with us? Dr. Zhao: The RWA market has enormous potential, with the US, China, and the EU being the major players. Projects with complete data have the most potential, such as the tokenization of US stocks, which is popular due to clear trading data that is easy to put on the blockchain; stablecoins are also widely favored for their simplicity and transparency. Industry directions include:
Electricity: The data for projects such as power generation (biomass, energy storage), charging piles, etc. is being improved. Recently, Inspur Laboratory has been in contact mainly with electricity companies, which are capital-intensive and have traceable data.
High-end spirits: such as Macallan whisky, with a long brand history and comprehensive auditing, the value increases over time, which can achieve good annual returns. By splitting RWA (such as tokenizing oak barrels), it lowers the entry barrier for retail investors. In terms of the country, the data infrastructure in the United States is leading, and I believe that China's electricity and liquor RWA have great potential. Enterprises need to seize data completeness and Compliance to gain a market advantage. Eliora: The RWA market size could reach 16 trillion, far exceeding the cryptocurrency market. In terms of prospects, RWA may not be suitable for Chinese Web3 users, as there is greater arbitrage space on-chain. Developing countries (such as Indonesia) lack financial products and have poor stock market liquidity, and RWA provides them with quality asset investment opportunities. For example, the insurance demand of Southeast Asian users at 20 dollars per month can be met through RWA, enhancing asset preservation capability. Dongdong Robin: I agree, RWA has the potential to provide high-quality asset investment options for people in some underdeveloped areas and developing countries. Beihai Doctor: The RWA market is huge, and all enterprises can issue multiple RWA production lines, with continuous growth expected in the next 5 to 10 years. Last year, enterprises achieved double growth by purchasing BTC and ETH, but this year the risk of entering at high points is significant, making RWA a safer choice that can accommodate large amounts of capital. Opportunities are concentrated in:
Regulatory-friendly regions: Hong Kong, Singapore, Middle East (such as Abu Dhabi) have both regulation and encourage innovation, suitable for RWA issuance.
Six major industries: mainstream financial assets (bonds, securities, precious metals), leasing rights (land, real estate, factories, cars), income rights (business operations, P2P, energy), physically deliverable assets (liquor, cookies, textiles), emerging markets (carbon credits), funds (family offices, private equity, public offerings through SPV issuing RWA). RWA maps a liquidity premium of 3%-8% on the chain, which is enough to determine life and death in the competition of traditional manufacturing, attracting companies to enter the market. Crypto flamboyant lawyer: I believe the prospects of RWA are concentrated in China, the US, and Europe, with the US leading the trend and China having its "unique play style." Although the domestic market has not fully kept up with the blockchain wave, "truncated version" RWAs such as digital collectibles are attracting capital participation. In the future, China may form two models, one inside the walls and one outside, similar to the development path of the internet. In terms of industry, financial assets, electricity, and physical assets have the most potential and need to be combined with local regulation and market demand. Q4: What does everyone have to say about the new regulatory changes for global RWA in 2025? Crypto flamboyant lawyer: RWA regulation trends towards securitization management: EU: MiCA will be fully effective in 2025, refining the second and third tier measures, treating some RWA as securities, requiring disclosure and registration, and emphasizing KYC and AML. United States: The SEC has released guidelines for the registration of tokenized securities, accelerating the involvement of traditional institutions (such as BlackRock and JPMorgan) and, combined with Trump's cryptocurrency strategy, traditional finance is doubling down on the on-chain market. Hong Kong: Longxin Technology and Ant Securities (such as Ruiying) operate RWA under the sandbox policy, regulated by licenses 1, 4, and 9, with a mature broker cooperation model. Global regulation improves and relaxes in parallel, the integration of traditional finance and crypto accelerates, and RWA needs to rely on licensed institutions for compliance issuance. Dongdong Robin: Improved regulation paves the way for RWA. The U.S. Senate has recently reviewed three cryptocurrency bills, among which the Genius Act and the Clarity Act are closely related to the topics we discussed. Now, let's invite Dr. Beihai to share. Beihai Doctor: Regulation shows internal and external differences:
Civil law system: For example, the EU and Hong Kong predefine RWA as securities, regulated by the highest standards, requiring issuance by brokers, resulting in high compliance costs.
Maritime Law System: Singapore, Dubai, and other pioneers are exploring flexibly defining RWA (such as exempting profit distribution through the Howey test), encouraging innovation.
Try before you decide: After the emergence of phenomenon-level products (such as XRP, Uniswap), regulation improves in response, and regulatory arbitrage fosters innovation. Hong Kong and Singapore's approved RWA generally pass through, and the flexibility of the maritime law system is higher, making it suitable for early attempts. Dr. Zhao: Regulation will always lag behind innovation, and there needs to be a game between risk and innovation. The U.S. "Tianwen Act" has a high threshold (such as $10 billion), limiting small and medium-sized innovations. Companies should boldly try under the premise of "do no harm" and self-restraint, creating benchmark cases, and then adjust after regulation improves. The maritime law system (such as Singapore) is more suitable for pilot programs, which can then be replicated in the civil law system, creating a feedback loop. Regulatory contradictions consume development space, but leading with innovation is key. Eliora: The teacher has already covered the topic comprehensively, so I would like to add a point. The regulations in Hong Kong and the mainland seem overly strict, which contradicts the goals of globalization and liquidity of RWA. In the future, a more open regulatory framework is needed to support the new world rules. Q5: Based on the ecological niche of your own project, what is the one point about RWA that you would most like to share? Eliora: RWA will create a new world on-chain, surpassing traditional financial rules. The strict regulations in Hong Kong and the mainland are somewhat absurd, limiting the global influence and liquidity of RWA. In the future, new rules and new habits are needed to attract new participants. We cannot infer the future from history; we need to explore globalization opportunities with an open mind. RWA will bring about a brand new business model. Dongdong Robin: I agree. While it is important to learn from history, we should also explore and look forward to more innovative models. Beihai Doctor: Many people misunderstand RWA as real assets on-chain, but in fact, it is an asset mapping certificate on the chain. Blockchain has no concept of time; the core of RWA is to map real physical assets (such as real estate, product lines) into on-chain value certificates, and all valuable physical assets can be mapped. BlockValley aims to be a hub, similar to the Internet TCP/IP protocol, with standardized interfaces that allow companies to go on-chain without needing to understand blockchain. In the short term, RWA brings arbitrage and layout opportunities. In the long term, the boundaries between the real world and the virtual world will disappear, with RWA carrying a 38% liquidity premium, changing the competitive landscape of traditional industries and driving the entire industry on-chain. Dr. Zhao: RWA Wave Lab integrates resources with an open perspective to serve traditional and Web3 enterprises. The RWA trend began in mainstream countries (such as the United States and the European Union), where high-value assets (such as finance and electricity) drive development. However, small countries and emerging nations have the opportunity to achieve a leapfrog through on-chain data collection (such as the ICO model). RWA is not only asset mapping but also a complete on-chain of four-dimensional data (MetaData), reflecting the decentralized potential of blockchain. Crypto flamboyant lawyer: I think RWA needs a phenomenon-level product drive, like ChatGPT's push for AI. Currently, RWA is mostly exploratory, and I look forward to the emergence of blockbuster applications that clarify the development direction and promote ecological landing. Embrace the future of RWA with an open mindset! Dongdong Robin: That's it for tonight, thank you to all the guests! The Crypto Tavern brings Web3 hot topic interpretations every Thursday at 19:30, see you next time! Welcome to join the tavern listener group to get the latest news for each episode!

/END. Authors of this article: Zheng Hongde, Xu Xiaohui