The Wave of RWA Asset Tokenization is Coming: Investment Opportunities and Compliance Challenges Coexist

RWA(Real-World Assets) represents the process of converting tangible or intangible assets from the real world into digital Tokens through blockchain technology. This innovation not only enhances the liquidity and accessibility of assets but also opens up new fields for investors that are difficult to reach with traditional finance. As the global RWA market rapidly expands, it is expected to exceed $50 billion by the end of 2025, with long-term potential reaching as high as $18.9 trillion.

As a pioneer in the development of RWA, the United States has attracted the attention of numerous institutions and investors due to its mature financial market and clear regulatory framework. At the same time, regions such as the European Union, Singapore, and Hong Kong are also actively promoting RWA-related policies to inject new vitality into the market.

However, for investors in mainland China, participating in RWA investments is both attractive and requires caution. Due to the domestic regulatory environment for the Web3 industry still being in a "gray area" and lacking a clear legal policy framework, investors face multiple compliance challenges.

Advantages of RWA

Asset tokenization brings numerous significant advantages:

1. Increase Liquidity: Converting traditionally illiquid assets ( such as real estate or artwork ) into tradable Tokens expands the potential buyer base and enhances market efficiency.

2. Enhance accessibility: Lower the investment threshold, allowing ordinary investors to participate in high-yield asset classes that were previously difficult to access.

3. Enhance transparency: Utilize the openness and immutability of blockchain to provide reliable ownership records and transaction information, reducing the risk of forgery and fraud.

4. Unlocking Composability: Integrating with the DeFi ecosystem to create new financial products and services, offering more innovative opportunities for smart contract developers.

Analysis of the Nature of RWA Assets

The property classification of RWA assets is mainly based on the underlying asset type and the legal structure of tokenization. Generally, it can be divided into:

• Securities: such as stocks, bonds, etc.
• Physical assets: such as real estate, commodities, etc.
• Intangible assets: such as intellectual property, copyrights, etc.

After tokenization, RWA is usually viewed as a financial asset, but the nature of the underlying assets has not changed. In the United States, the SEC may determine whether tokenized assets constitute securities through the Howey Test (. For most RWA assets with profit returns, they tend to be regarded as securities in the United States.

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Compliance Restrictions

Mainland Chinese investors face numerous compliance challenges when participating in overseas RWA investments:

1. Foreign exchange control: The annual $50,000 facilitation quota for individuals cannot be used for overseas securities investment, and enterprises must complete ODI registration.

2. Tax Policy: Withholding tax may need to be paid in the United States, and a 20% capital gains tax may need to be paid in China.

3. Cross-border business risks: Trading through unapproved foreign exchanges or brokers may be considered illegal.

4. Virtual coin trading risks: Purchasing digital currency is a high-risk activity and is not protected by law.

Investors must strictly adhere to relevant domestic and international laws and regulations to ensure the safety and compliance of their funds. Only under the dual guarantee of technological innovation and compliance optimization can wealth growth be achieved in the wave of RWA tokenization, while effectively avoiding potential risks.

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