Systematic analysis of the RWA panorama, from the essence of finance, core technologies, regulatory compliance operations, global project matrix, to future trends and entrepreneurial paths, providing a one-stop research framework.
Editor's Note: Since 2025, W Labs has engaged with several large institutions with Chinese backgrounds across industries such as infrastructure, energy, and luxury goods, some of which are state-owned enterprises. They requested us to provide research analysis and application examples regarding domestic and international RWA. As the year comes to a close, we would like to share some of the publicly available research findings from this year with our friends.
This series of articles contains a lot of content. We will not conclude whether RWA can become the main direction for the crypto industry to break out in the future, nor will we judge whether RWA is "adding unnecessary details" or "selling dog meat under a sheep's skin." Instead, we aim to write down what we see and think, allowing everyone to ponder the future trends of the industry.
Amidst the global wave of financial technology, the tokenization of Real World Assets (RWA) has become the core focus at the intersection of the Web3 ecosystem and traditional finance (TradFi). From BlackRock issuing the BUIDL fund on the Ethereum mainnet (with a TVL exceeding $500 million) to the Hong Kong Monetary Authority's Ensemble sandbox handling RWA worth $500 million, RWA is reshaping asset liquidity, financing efficiency, and the global settlement landscape.
Hong Kong, as the "Eastern RWA Hub," is particularly noteworthy: after the implementation of the "Stablecoin Regulation" in 2025, over 50 compliant projects emerged within just six months—such as HashKey Exchange's GF Token ($150 million money market fund), Ant Group's Longxin charging pile RWA ($10 million in new energy assets), and Asseto's DeRings Tower property tokenization ($5 million HKD). This trend not only attracts Chinese giants to go overseas but also bridges the "Belt and Road" supply chain with global capital. However, recent regulatory guidance from the mainland has temporarily paused some cross-border RWA pilot projects, which has cooled market enthusiasm but cannot stop the structural rise of RWA in the regulatory sandboxes of China, the U.S., and Europe, as well as institutional entry—just as the FIT21 and GENIUS acts indicate, stablecoins + RWA have become the "digital Bretton Woods system" in great power competition.
This series of articles systematically analyzes the RWA panorama, from the essence of finance, core technologies, regulatory compliance operations, global project matrix, to future trends and entrepreneurial paths, providing a one-stop research framework. The series is divided into four long articles: the first focuses on popularizing basic RWA knowledge, the second will focus on global regulatory practices and representative projects of RWA, the third will concentrate on the regulatory status and representative projects in China and Hong Kong, and the fourth will further explain feasible operational paths for RWA and future industry trends in the current environment, aiming to enable readers to grasp the trillion-dollar RWA track after reading this series. Whether for institutional investors, traditional enterprises, or Web3 entrepreneurs, we will unlock strategic high points for you, promoting the global circulation of Chinese assets and digital overseas expansion.
What is RWA
RWA (Real World Assets) refers to valuable assets that exist in the real world, such as real estate, corporate loans, government bonds, artworks, carbon emission rights, oil, and even limited edition whiskey. These assets are "tokenized" through blockchain technology, transforming them into digital assets that can be freely traded, circulated, and combined globally, just like cryptocurrencies. In the traditional financial system, these assets often face high participation thresholds, poor liquidity, and geographical restrictions. However, after tokenization, they become "on-chain assets," breaking traditional barriers and possessing the following characteristics:
Supports rapid trading, allowing investors to operate like buying and selling stocks;
Can be used as collateral to obtain loans;
Can be combined into diversified investment "baskets";
Holders can receive rental income, interest, and other profit distributions;
Achieves global circulation, unrestricted by borders or time.
The tokenization of RWA not only enhances the liquidity and accessibility of assets but also provides users with more flexible investment options, lowers participation thresholds, and promotes innovation and inclusiveness in financial markets. Through blockchain technology, RWA injects digital vitality into traditional assets, becoming an important bridge connecting the real and digital economies, widely applied in finance, art, energy, and other fields.
Why the Explosion Now
The current explosion of the tokenization of real-world assets (RWA) is driven by multiple factors, including technological advancements, regulatory optimization, institutional participation, and market demand. On the technological front, blockchain platforms like Ethereum and Polygon are maturing, while smart contracts and oracle technologies enhance the security and scalability of on-chain assets, and on-chain identity verification reduces the trust costs of traditional finance.
The regulatory environment is gradually clarifying, with the pace of U.S. regulation slowing down and policies becoming clearer; the Hong Kong Monetary Authority has launched a digital asset "regulatory sandbox," and Singapore supports on-chain bond and fund projects, providing a compliant soil for RWA development. Traditional financial giants like BlackRock, JPMorgan, and Citigroup entering the market bring funding, resources, and compliance experience, pushing RWA from the blockchain geek circle into the mainstream financial market.
In terms of market demand, the global high-interest rate environment and declining returns on traditional assets have prompted investors to seek new asset allocations. RWA provides high liquidity and global participation opportunities through tokenization, meeting this demand. Additionally, blockchain technology has transitioned from the "tech enthusiast" phase to the large-scale adoption of "pragmatists," with stablecoins integrating into real economic scenarios such as cross-border e-commerce, freelancer settlements, and global payments, highlighting RWA's role as a blockchain infrastructure.
Market Size and Growth Rate
The global exploration of RWA is rapidly heating up from Hong Kong to Europe, Dubai to North America, showcasing a trend of diversified institutional design, technological pathways, and business models. As of now, the total value of global RWA assets has reached $33 billion. Major consulting and financial institutions have made bold predictions about the future growth and scale of RWA:
Boston Consulting Group predicts that by 2030, the RWA market size could reach $16 trillion, and by 2033, the on-chain RWA asset size may increase to $18.9 trillion, with a compound annual growth rate of about 53% over the next eight years.
Deloitte estimates that by 2035, the real estate tokenization market will reach $4 trillion, with an annual growth rate of about 27%.
According to McKinsey, by 2030, approximately $16 trillion of global assets will achieve on-chain circulation through RWA, with 20%-30% potentially coming from Chinese assets, highlighting significant potential. McKinsey's 2024 report further indicates that the market value of global financial asset tokenization is expected to reach $2-4 trillion by 2030.
BlackRock CEO Larry Fink has repeatedly emphasized that RWA is one of the most transformative applications of blockchain, with the potential to reshape the global asset management industry. In his annual shareholder letter, he stated: "Tokenization will be the next phase of financial assets, with every stock and every bond operating on a unified ledger."
In terms of stablecoins, the total payment and settlement amount based on stablecoins reached $16.16 trillion in 2024, surpassing the combined total of VISA and Mastercard, marking the formation of a new payment system independent of traditional banks and the SWIFT network. Traditional cross-border payment processes are complex, requiring multiple intermediaries, taking up to two weeks, and incurring high costs. In contrast, stablecoins, with their price stability mechanisms and on-chain real-time settlement capabilities, enable point-to-point, trustless transactions that can ideally be completed in seconds without relying on traditional clearing and settlement systems.
Currently, RWA is mainly concentrated in highly liquid fixed-income instruments, while the potential in areas such as real estate, stocks, artworks, and infrastructure has yet to be fully explored, indicating that the market is still in its early stages. Institutional participation is the core driving force behind the growth of the RWA market, with regulated institutions and DeFi native protocols jointly driving market supply. Major participants include asset management companies like BlackRock and Franklin Templeton, banks like JPMorgan, Citigroup, and Standard Chartered, custodians like BNY Mellon, and DeFi protocols like Maple, Centrifuge, Ondo Finance, and MakerDAO. The entry of these institutions indicates that RWA is moving from the crypto space to mainstream finance. For example, the European Investment Bank has issued digital bonds on Ethereum.
According to the latest data from RWA.xyz and CoinGecko, the total issuance of RWA (as of September 2025) has reached $33 billion, with the largest categories being private credit, government bonds, and commodities, while the potential in real estate, stocks, artworks, and infrastructure compared to traditional finance and physical asset scales has yet to be fully tapped.
What Problems Can RWA Solve?
RWA is a cross-disciplinary field that integrates Web3, traditional finance, and the real world, and its emergence has a positive impact on all three areas.
1. Solving Problems in the Web3 Field
Insufficient Liquidity: Web3 assets (such as NFTs and some tokens) often suffer from low liquidity due to market fragmentation. RWA brings high-value real assets (such as government bonds and real estate) on-chain, increasing liquidity and trading depth. For example, tokenized government bonds (like BlackRock's BUIDL) can be used as collateral in DeFi protocols, enhancing capital efficiency.
Single Asset Class: In the past, the asset classes in the DeFi ecosystem were quite limited, almost entirely composed of cryptocurrencies. These assets, such as Ethereum, USD stablecoins, and Bitcoin, not only exhibit extreme price volatility but also have a high degree of correlation with each other, leading to a homogenized financial system. Introducing real-world assets effectively alleviates this issue, significantly expanding the types of assets and enhancing overall stability.
Lack of Real Returns: Many DeFi protocols rely on internal speculative cycles for returns, such as liquidity mining through lending, lacking support from the real economy. In contrast, real-world assets can generate rental income, bond interest, and appreciation of commodities, all driven by real economic activities, thus possessing stronger sustainability.
Unstable Value Anchors: Many crypto assets are highly volatile and lack a stable value foundation. Stablecoins (such as USDT and USDC), as representatives of RWA, provide stable value by anchoring fiat currencies, enhancing the credibility and practicality of the Web3 ecosystem.
Limited User Adoption: Web3 applications are often limited to tech enthusiasts. RWA introduces familiar asset classes (such as stocks and bonds), lowering the entry barriers for ordinary users and promoting mass adoption.
2. Solving Problems in Traditional Finance
Low Transaction Efficiency: In traditional finance, asset transactions (such as real estate and bonds) involve multiple intermediaries, leading to long settlement cycles (T+2 or longer). RWA utilizes blockchain to achieve real-time settlement (T+0), such as automating bond interest payments through smart contracts, reducing costs and time.
High Barriers to Entry: Many high-value assets (such as private equity funds and real estate) have high capital thresholds for retail investors. RWA lowers investment barriers by fragmenting ownership (such as tokenizing property shares), expanding market participation.
Lack of Transparency: Traditional financial markets often lack real-time transparency. RWA leverages the public ledger of blockchain to provide transparent tracking of asset ownership and transaction history, enhancing trust.
3. Solving Problems in the Real World
Poor Asset Liquidity: Non-liquid assets in the real world (such as artworks and private credit) are difficult to quickly liquidate. RWA introduces these assets to the global market through tokenization (such as issuing art NFTs on Ethereum), enhancing liquidity.
Insufficient Financial Inclusion: Many people globally lack access to banking services or investment opportunities. RWA enables borderless participation through decentralized platforms (such as Polygon and Stellar), empowering investors in emerging markets.
Environmental and Social Issues: The tokenization of RWA, such as carbon credits (e.g., Toucan Protocol), promotes transparency and efficiency in carbon trading, supporting sustainable development goals.
4. Solutions for China's National Conditions
China's real estate market has entered a "stock competition" phase. In this trend, how to activate idle stock assets and promote more efficient capital allocation has become a core issue for the industry to explore new development paths. The rise of RWA (Real World Assets) opens up innovative solutions for real estate finance. It is not limited to "digitizing real estate on-chain," but rather involves redesigning equity structures and utilizing technologies such as blockchain and smart contracts to transform large assets that are difficult to divide, have cumbersome transaction processes, and suffer from information asymmetry into combinable, manageable, and tradable digital equity units. Smart contracts embed rules that clarify the relationship between rights and responsibilities and cash flows, while the secondary market supports price discovery and exit mechanisms.
Compared to traditional asset digitization, RWA fundamentally redefines the composition of asset rights. With the immutable nature of blockchain and the automated execution capabilities of smart contracts, high-value, low-liquidity physical assets can be divided into freely tradable small equity units, significantly enhancing asset liquidity and market depth. For example, a commercial property valued at 10 million yuan can be tokenized into 10,000 tokens, each representing one ten-thousandth of ownership, lowering the investment threshold from 10 million yuan to 1,000 yuan, and allowing free trading in the secondary market.
The type of enterprise significantly influences the understanding of RWA, with financial real estate asset management companies and leading developers having an advantage in RWA comprehension. A survey by Ke Rui shows that 60% of respondents believe the core value of RWA lies in "enhancing asset liquidity," 20% focus on "lowering investment thresholds," and about 15% value "broadening financing channels," while the emphasis on "increasing transparency" and "optimizing operational efficiency" is relatively low. However, the automatic execution of smart contracts, the transparent management of blockchain, and refined operational capabilities can indeed bring profound changes to operational efficiency, risk management, and asset management models.
Advantages and Value of RWA Tokenization
RWA (Real World Assets) tokenization utilizes blockchain technology to transform traditional assets such as stocks, bonds, real estate, and gold into digital tokens, enhancing liquidity, transparency, and global accessibility, injecting vitality into financial innovation. Its core technological advantages mainly include:
Automation, Transparency, and High Efficiency of Smart Contracts: Smart contracts automatically execute transaction terms, ensuring transparent operations without human intervention. The code is immutable, and combined with decentralized node verification, it eliminates trust risks and enhances security. For example, when asset prices meet standards, the contract automatically triggers transfer or settlement. Additionally, the automated distribution of smart contracts will greatly improve asset management efficiency.
Stability of Over-Collateralization Mechanism: RWA tokenization converts assets into tradable tokens that support stablecoin issuance as collateral. Smart contracts automatically liquidate based on asset value, ensuring platform liquidity and debt repayment capacity, preventing over-issuance risks.
Real-Time Data Assurance from Oracles: Oracles bridge on-chain and off-chain, transmitting asset prices, ownership, and other data in real-time, aggregating multi-source information to ensure accuracy, and supporting legally compliant data to guarantee transaction legality.
Global Circulation: On-chain assets support 24/7 global trading, simplifying cross-border investment processes and enhancing market diversity and liquidity.
User Empowerment: Through the "users as shareholders" model, RWA integrates marketing and financing, enhancing user loyalty and brand exposure.
Supply Chain Support: RWA creates an ecological closed loop, optimizing supply chain finance, aiding in the accumulation of corporate funds and ecological circulation.
The above technological advantages, combined with finance, also bring the following additional benefits to RWA issuers:
Increased Profitability: New funds are used to expand production and explore markets, enhancing profits.
Solving Liquidity Issues: By fragmenting, the potential of high-value assets can be released in advance.
Integrated Marketing and Financing: User participation in investment enhances consensus and sales channels.
Brand Exposure: RWA projects come with built-in traffic, enhancing brand awareness.
Convenient Management: Optimizes asset management, promoting a light asset model and the conversion of overseas assets.
Ecological Innovation: Supports the closed loop of supply chain finance, alleviating cash flow pressure.
Comparison of RWA and Traditional Financial Models
The RWA (Real World Assets) financing model and traditional finance both aim to provide funding support for enterprises and projects, relying on physical assets to ensure value support and adhering to regulatory requirements. However, there are significant differences in technology, efficiency, and innovation. Traditional finance relies on centralized institutions, has complex processes, high intermediary costs, low asset liquidity, and cross-border transactions are limited by geography and exchange rates, making it suitable for mature markets but with limited globalization efficiency. The RWA financing model is based on blockchain and smart contracts, achieving fragmented trading through asset tokenization, lowering investment thresholds, and supporting 24/7 global circulation, significantly enhancing liquidity. The automated execution of smart contracts reduces intermediary costs, the immutability of blockchain enhances transparency and credibility, and oracles provide real-time data support. RWA also promotes new derivatives and the "users as shareholders" model, facilitating financial inclusiveness and brand effects. Despite facing regulatory and technical security challenges, RWA far exceeds traditional finance in financing efficiency, degree of globalization, and innovation, demonstrating the disruptive potential of the financial system in the Web3 era, particularly suitable for activating low-liquidity assets and optimizing supply chain finance.
Technical Challenges Facing RWA
RWA (Real World Assets) tokenization, as an innovative path bridging traditional finance and Web3, still faces multiple severe challenges on the technical level. These issues not only restrict the large-scale implementation of RWA but may also trigger systemic risks. According to the "RWA Technical Challenges Report" by Chainlink & ConsenSys (2025), 35% of global RWA projects in 2024 were paused due to technical failures, resulting in losses exceeding $800 million. The main pain points are concentrated in five areas: oracle reliability, off-chain execution limitations, privacy and transparency conflicts, lack of standardization, and security risks, which urgently require systematic solutions.
Oracle Issues: Blockchains cannot directly access off-chain data and rely on oracles to provide information such as asset value and status. Single or centralized oracles are vulnerable to attacks, leading to errors in smart contracts, necessitating the assurance of data source authenticity to solve the "trust transfer" dilemma.
Off-Chain Execution Limitations: Smart contracts are limited to on-chain logic, and breaches must rely on traditional legal systems, causing execution delays and weakening automation advantages.
Privacy and Transparency Conflicts: The openness of blockchain facilitates auditing but may leak sensitive business or personal information. Zero-knowledge proofs can protect privacy but increase technical complexity and costs.
Lack of Standardization: Different token standards and compliance frameworks lead to dispersed asset liquidity, forming "islands" that hinder global value circulation.
Immature Technology and Security Risks: Blockchains are still not perfect in user experience, security, and compliance. Issues such as private key management, smart contract vulnerabilities, phishing attacks, cross-chain bridge attacks, oracle manipulation, and regulatory arbitrage may trigger systemic risks. Ignoring technical details can lead to business strategy and ecological planning collapsing due to user complaints, compliance incidents, or security events.
To address the above technical issues, we can focus on digitalizable assets in the short term, improving oracles, compliance frameworks, and privacy technologies to enhance market trust. In the long term, by integrating IoT and AI, we can develop advanced oracles to automatically monitor non-standardized assets (such as real estate and artworks), gradually integrating the physical world into the digital ecosystem.
Asset Categories That Can Be Tokenized
Returning to the underlying asset categories that can be tokenized, in theory, any real-world asset can be tokenized and issued as RWA, but physical assets with the following characteristics have more advantages:
Quantifiable Value:
Assets must have a transparent and public pricing mechanism, making it easy to obtain real-time value through authoritative data sources (such as exchanges and official databases).
Example: The prices of gold and government bonds are publicly quoted by the market, suitable for oracle price feeds.
Clear Cash Flow Rules:
The income from assets (such as interest, dividends, and rent) must have clear calculation and distribution rules, facilitating the automated execution of smart contracts.
Example: The interest rates and payment dates of government bonds are fixed, making on-chain distribution straightforward.
Low Off-Chain Execution Demand:
Changes in asset ownership should primarily be completed through digital records, reducing reliance on physical delivery or complex legal execution.
Example: ETF share trading is conducted through digital records without the need for physical delivery.
High Standardization:
Assets must adhere to unified standards (such as standard contract terms) to facilitate bulk processing and cross-platform interoperability, preventing "asset islands."
Example: Gold futures contracts have standardized expiration dates and delivery rules.
Compliance Support:
Asset tokenization must comply with local regulatory requirements (such as securities laws and anti-money laundering regulations) to ensure legal circulation.
Example: The tokenization of U.S. Treasury bonds must comply with the regulations of the U.S. Securities and Exchange Commission (SEC).
Technical Feasibility:
Reliable oracles are needed to provide off-chain data (such as prices and statuses), and blockchain platforms must support smart contracts and security mechanisms to prevent vulnerabilities, attacks, or data tampering risks.
Example: Chainlink oracles provide reliable price data for DeFi protocols.
What specific types of assets are currently being or have been tokenized in the market? Common examples include the following:
Commodities: Precious metals like gold are tokenized in conjunction with blockchain to enhance liquidity and operational efficiency. In 2022, the market value of commodity tokens reached $1.1 billion, accounting for 0.8% of fiat stablecoins. Gold, due to its safe-haven properties and stable appreciation, is particularly suitable as a tokenized anchor asset, supporting global reserves and investments.
Currency: Stablecoins (such as USDT and USDC) link fiat assets like the U.S. dollar and U.S. Treasury bonds to DeFi, with market capitalization surging from $5.2 billion in 2020 to over $300 billion today. Central Bank Digital Currencies (CBDCs), as state-issued digital fiat currencies, provide legal circulation guarantees, distinguishing them from cryptocurrencies.
Real Estate: RWA tokenization fragments real estate into tradable tokens, increasing the liquidity of owners' capital and lowering investment thresholds, allowing ordinary people to participate in commercial or residential real estate investments.
Art and Collectibles: NFTs provide immutable proof of rights and provenance, while fungible tokens (FTs) support fractional crowdfunding of artworks, lowering barriers, enhancing transparency, and improving revenue distribution efficiency, thus increasing investment inclusivity and experience.
Intellectual Property (IP): Tokenization simplifies the verification and tracking of copyrights, patents, and other IP, preventing plagiarism and enhancing transaction transparency, such as the protection of Dell's "on-demand assembly" patent.
Stocks, Bonds, and Securities: Tokenization lowers the barriers to entry in capital markets, allowing small investments in U.S. Treasury bonds and other assets, overcoming the high costs and long cycles (T+1) of traditional trading, achieving 24/7 real-time settlement, and promoting global capital flow.
Carbon Credits and Green Finance: After tokenization, carbon reduction certificates can be traded or destroyed on-chain, supporting a transparent and anti-counterfeiting global carbon market, aligning with ESG and sustainable development trends, and introducing green financial products to DeFi.
Summary
This article primarily discusses the concept, development background, technological advantages, application potential, and challenges of RWA (Real World Assets). As an innovative integration of blockchain and traditional finance, RWA is reshaping the global asset management landscape. It tokenizes real assets such as real estate, bonds, and artworks, injecting digital vitality, breaking down geographical barriers and entry thresholds, and achieving 24/7 global trading, fragmented ownership, and automated revenue distribution through smart contracts. The current surge is driven by technological advancements (such as Ethereum scaling), regulatory green lights (U.S. and European sandboxes), and the influx of major players (BlackRock's $2.9 billion BUIDL fund), with the market soaring from $860 million in 2023 to $33 billion by 2025, dominated by private credit and government bonds, and expected to reach trillions by 2030, with stablecoin payments far exceeding traditional systems.
The multi-dimensional value of RWA is evident: injecting real returns and stability into Web3, alleviating the speculative cycle of DeFi; accelerating T+0 settlement in traditional finance, enhancing transparency, and reducing intermediary costs; empowering emerging markets and financial inclusion in the real world, and lowering investment thresholds for fragmented high-value physical assets. Compared to traditional models, RWA's decentralization and globalization far surpass the inefficiencies of centralization, supporting the "users as shareholders" ecosystem and supply chain closed loops. However, new physical assets always face challenges: oracle data tampering, reliance on off-chain execution, privacy-transparency paradoxes, and lack of standardization, leading to numerous RWA project failures. To address these challenges, short-term efforts should focus on improving compliance modules, while long-term strategies should integrate AI, IoT, and related fields. Overall, RWA is not just a technical tool but a bridge for inclusivity, connecting the real economy with a digital future, driving finance from "trust intermediaries" to "code autonomy," with limitless potential.
In the next article, we will explore the global RWA regulatory framework and analyze some mainstream international RWA issuance/trading platforms and cases in detail. Stay tuned!
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