This article is authorized to be reproduced from Mankun Blockchain Legal Services, and the copyright belongs to the original author. "Entrepreneurship Web 3.0" is an interview program for Chinese Web 3.0 entrepreneurs initiated by Mankun Law Firm. Every Wednesday evening, we invite industry leaders, frontline institutions, and well-known entrepreneurs to join our live broadcast, promoting compliance and healthy development of the Chinese Web 3.0 industry through positive voices, rational discussions, and experience sharing.
June is the RWA special month. How can Real World Assets (RWA) link Web 3.0 with the real world under a compliance framework? In this episode, we invite Mankun's senior lawyer Mao Jiehao to have an in-depth dialogue with lawyer Wang Lei. From the deep cultivation of DePIN to RWA, Lawyer Mao shares the compliance path in Hong Kong, global regulatory trends, the exploration difficulties of domestic assets, and how to empower RWA through standardization and programmability, helping entrepreneurs avoid pitfalls and stay on the right path, welcoming the great maritime era of RWA and traditional finance integration!
(Audio transcription may have omissions and errors due to AI processing.)
Welcome this episode's guest, please introduce yourself!
Wang Lei: Welcome to the "Entrepreneurship Web 3.0" program every Wednesday! I am lawyer Wang Lei, a legal practitioner at Mankun Law Firm, focusing on RWA compliance exploration, taking over from lawyer Niu Xiaojing to host this episode. June is the RWA special month, and today is the second episode, themed "Current Status of RWA Compliance, Licensing Requirements, and Global Regulatory Trends." We have invited my old partner, senior lawyer Mao Jiehao from Mankun, who has deep expertise in Web 3 compliance and has participated in multiple RWA projects, with solid experience! I look forward to Lawyer Mao's straightforward and practical sharing! If tonight's content is valuable, feel free to share it in your circle of friends, and if you have questions in the live chat, please leave a message anytime! Now, please let Lawyer Mao introduce himself!
Mao Jiehao: Thank you, Lawyer Wang! Haha, hello everyone, I am Mao Jiehao from Mankun Law Firm, mainly focusing on civil, commercial, and compliance work in the Web 3 industry, involving domestic and foreign legal affairs. Over the past year, I have been particularly focused on the RWA track, researching compliance paths, development potential, and the linkage between RWA and stablecoins. RWA is not just about asset tokenization; it is also a bridge connecting Web 3 with reality. Starting from DePIN, I have been paying attention to the integration of Web 2 and Web 3 scenarios, gradually delving into RWA. I hope the concepts and practical experiences I share today can help everyone avoid pitfalls! Friends in the live chat are welcome to ask questions and exchange ideas anytime!
Wang Lei: Lawyer Mao is too modest! From DePIN to RWA, the practical experience in compliance is very solid! Friends in the live chat, get your notebooks ready; tonight is packed with valuable insights!
Q1: How did you get involved with RWA? Why are you interested in it?
Wang Lei: Lawyer Mao, you and I have collaborated on projects many times, and I trust your expertise in compliance. How did you get involved with RWA? As a lawyer, why do you have a strong interest in it?
Mao Jiehao: Haha, Lawyer Wang, we are indeed familiar enough not to be nervous, but I still feel a bit nervous when we go live! My interest in RWA stems from my focus on the integration of Web 3 with reality. Initially, I worked in the DePIN track, where I encountered the linkage between Web 2 scenarios and Web 3, such as the combination of IoT and blockchain.
From 2021 to 2022, DePIN had not yet become a clear track, but I felt that the pure Web 3 internal circulation space was limited and that it had to combine with real-world assets to go further. The emergence of RWA perfectly aligns with this logic. RWA is not just about tokenizing assets; it allows traditional assets to be programmable through smart contracts, opening up new possibilities, such as fragmented rights to income and cross-border flow. This makes me see RWA as a bridge between Web 3 and traditional finance, with enormous potential. As a lawyer, I study not only the compliance paths but also the business models and ecological possibilities of RWA, which keeps me continuously engaged.
Q2: What compliance pitfalls are most easily encountered in RWA projects?
Wang Lei: You have accumulated a lot of experience in RWA projects. What pitfalls do entrepreneurs most easily fall into? Can you share from a compliance perspective?
Mao Jiehao: The pitfalls in RWA projects mainly focus on three aspects:
Asset Selection: Not everything can be RWA! Many people immediately ask, "Can my asset go on-chain?" But compliance, liquidity, and programmability must be assessed first. For example, in the U.S., the focus is on U.S. Treasury bonds and stocks, with BlackRock's U.S. Treasury RWA reaching $3 billion, clearly structured, complying first and then tokenizing. Hong Kong, on the other hand, is keen on non-standard assets, such as renewable energy and real estate income rights, as they are closer to businesses and individuals. However, the compliance of non-standard assets is complex, requiring an assessment of policy risks and market acceptance.
Location and Tokenization Method: Where to issue RWA? Use tokens or NFTs? Hong Kong allows tokenization but requires the isolation of domestic assets, setting up an SPV (Special Purpose Vehicle) or fund structure. Offshore issuance has lower costs but poorer compliance and higher risks. Entrepreneurs often overlook the regulatory differences in location, making it easy to fall into pitfalls.
Investor Subscription: After tokenization, will investors buy in? Insufficient market prediction is a common issue. Many people focus solely on issuing tokens, neglecting liquidity needs and investor trust, leading to project stagnation.
Compliance is key; entrepreneurs must first ask, "Is this asset suitable for RWA?" before choosing the right location and method, and finally ensuring market acceptance.
Wang Lei: The three major pitfalls of asset selection, location, and subscription are well summarized by Lawyer Mao. "Not everything can be RWA" has awakened many friends.
Q3: Can RWA be directly done in China? What are the compliance paths?
Wang Lei: Friends in the live chat are asking, can RWA be directly done in China? What are the compliance paths?
Mao Jiehao: Directly issuing RWA tokens in China is definitely not possible; issuing tokens is a sensitive red line domestically. However, there are alternative paths, such as digital collectibles or digital assets on consortium chains, binding to real rights. For example, a box of mooncakes or a voucher for a bottle of wine can correspond 1:1 to the physical item, made into a digital collectible, similar to an on-chain voucher. This method must ensure specificity (one-to-one binding) and cannot involve non-specific rights to income or dividends, otherwise, there is a risk of illegal fundraising. Taking wine as an example, the voucher is essentially for physical exchange, which has higher compliance, but the promotion cannot involve investment returns and must strictly control marketing boundaries. Domestic RWA exploration should focus on rights-based assets, combined with consortium chains, to avoid the tokenization red line.
Q4: Which assets have the highest compliance difficulty for RWA?
Wang Lei: You have encountered many RWA projects; which assets or scenarios have the highest compliance difficulty? Can you provide examples?
Mao Jiehao: Assets with high compliance difficulty mainly have two characteristics: complex ownership and strict regulation. For example:
Gold Mines: The ownership of gold mines involves mining rights and land rights, with strict domestic control. After tokenization, it is difficult to ensure compliance, as on-chain confirmation and offline regulation do not align, posing extremely high risks.
Special Assets: Such as cultural relics and state-owned assets with restricted circulation, involving multiple regulations on culture and property rights, making direct RWA almost impossible.
In contrast, rights-based assets (such as accounts receivable and real estate rent) have relatively lower compliance difficulty. For example, RWA projects in Hong Kong often structure accounts receivable into fixed-income products before tokenization, avoiding ownership issues. Entrepreneurs must first assess the legal attributes of the assets before designing a compliant structure.
Wang Lei: The difficulty of RWA for gold mines and cultural relics is vividly illustrated by Lawyer Mao's examples. The rights-based path opens up new ideas for entrepreneurs.
Q5: What is the dividing line between RWA and traditional finance (such as REITs, ABS)?
Wang Lei: RWA is often compared with REITs and ABS; where is the dividing line in compliance paths?
Mao Jiehao: The dividing line between RWA and traditional finance lies at two levels:
Front-end: Standardization of asset on-chain: The core of RWA is asset on-chain, which requires clarity on "what assets can go on," "by what standards," and "who regulates." For example, RWA projects in Hong Kong must be approved by the SFC (Securities and Futures Commission), involving KYC/AML and disclosure requirements. Traditional ABS/REITs focus more on corporate credit and ratings, with weaker on-chain links. The standardization of RWA (such as smart contract design and third-party audits) is a new challenge and a compliance focus.
Back-end: Programmability of tokens: RWA grants assets programmability through smart contracts, such as automated income distribution and cross-chain transactions, which traditional finance lacks. In terms of compliance, the realizability of tokens (liquidity, default risk) requires a new regulatory framework, as traditional financial fund and securities regulations cannot fully cover it.
The compliance path for RWA is more complex, but its programmability offers infinite possibilities, truly linking Web 3 with traditional finance.
Wang Lei: Standardization + programmability, Lawyer Mao's analysis of the dividing line is very clear.
Q6: What licenses or qualifications are involved in RWA projects?
Wang Lei: What licenses or qualifications are typically required for RWA projects? How do the requirements differ in places like Hong Kong and Dubai?
Mao Jiehao: RWA does not have a dedicated license and must rely on traditional financial licenses, with varying requirements in different regions:
Hong Kong: The SFC's Type 9 license (asset management) is core; for fund tokenization, fund manager qualifications are required. Hong Kong's RWA sandbox (Ensemble) allows for case-by-case discussions but is not a license and requires support from traditional securities regulations (such as Type 1 and Type 4 licenses).
Dubai: There is no dedicated RWA license; the first phase of the sandbox (ending in April 2025) allows testing but requires VARA (Virtual Assets Regulatory Authority) approval, involving custody and trading licenses.
Other regions: The U.S. SEC requires RWA to comply with Reg D/S exemptions or register as securities; the EU's MiCA (effective December 2024) will classify RWA into ARTs (Asset-Referenced Tokens) and EMTs (Electronic Money Tokens), requiring specific licenses.
The compliance path in Hong Kong is relatively clear but complex in process; currently, the SPV + fund structure is a reference. Entrepreneurs must first clarify the asset type and then match the licenses.
Q7: What are the compliance barriers for domestic assets issuing RWA in Hong Kong?
Wang Lei: Friends in the live chat are asking, what are the compliance barriers for domestic assets issuing RWA in Hong Kong? What are the advantages of offshore issuance?
Mao Jiehao: The barriers for domestic assets issuing RWA in Hong Kong mainly include:
Dual Regulation: Funds must be received by a domestic SPV, and then a private fund and token approval must be established in Hong Kong, involving SFC's KYC/AML and disclosure requirements. This incurs high costs and complex processes, making it difficult for non-large institutions like Ant Group to obtain exemptions.
Asset Isolation: Domestic assets cannot directly issue tokens; they must be isolated (e.g., through an SPV) to ensure compliance with the token issuance red line.
Policy Risks: Domestic regulation is strict; rights-based assets (such as accounts receivable) are easier to navigate, while real estate and other immovable properties are restricted due to ownership issues.
Offshore issuance has lower costs but poorer compliance, lacking regulatory recognition and posing high risks. The compliance path in Hong Kong is safer and suitable for capable teams. I recommend entrepreneurs choose Hong Kong, leveraging professional law firms like Mankun to design SPV + fund structures to avoid pitfalls.
Q8: Can non-standard assets like artworks and training courses be RWA?
Wang Lei: Friends in the live chat are asking, can artworks and training courses be RWA? What is the difference from NFTs? Is there a risk of illegal fundraising?
Mao Jiehao: Non-standard assets like artworks and training courses can explore RWA, but the difficulty and compliance requirements vary:
Artworks: Direct tokenization is challenging due to complex ownership, requiring an assessment of default risks and investor protection. They can be structured through rights to income (such as leasing agreements) before tokenization. Unlike NFTs, RWA focuses more on on-chain liquidity and compliance, while NFTs lean towards collectible value.
Training Courses: Similar to digital collectibles, they need to be bound to specific rights on a 1:1 basis, such as a one-hour course video, akin to a voucher. Promotions cannot involve investment returns; otherwise, there is a risk of illegal fundraising. Future courses can be viewed as contracts, binding digital assets, but splitting income rights must be done cautiously to avoid crossing the red line.
The key to compliance is specificity (1:1 binding) and marketing boundaries, requiring a clearly designed structure.
Q9: What are the global regulatory trends for RWA? Which regions are more open?
Mao Jiehao: The global regulatory trends for RWA are diverging, with different attitudes in various regions:
Hong Kong: Open and clear, the Stablecoins Ordinance (effective in 2025) and the Ensemble sandbox support RWA, with the SFC considering each case individually, favoring green energy and technology assets.
United States: The SEC has strict regulations, requiring registration as securities or Reg D/S exemptions. BlackRock's U.S. Treasury RWA ($3 billion) serves as a benchmark, with a mature compliance path.
European Union: MiCA (effective December 2024) will classify RWA into ARTs/EMTs, with clear regulations suitable for structured assets.
Singapore: The FSW Act will take effect on June 30, tightening regulations; even working from home may be illegal, so project teams need to be cautious.
Dubai: The sandbox is flexible, but VARA has high requirements, making it suitable for large institutions, while the threshold is high for small and medium teams.
Open regions: Hong Kong, EU, and the U.S. (large institutions); gray areas: Dubai and Singapore (regulations tightening). Entrepreneurs are advised to refer to successful cases (such as BlackRock and Ant Group), communicate with local regulators, and design compliance paths.
Q10: What advice and life insights do you have for RWA entrepreneurs?
Wang Lei: Friends in the live chat are very concerned about how to persist until the RWA explosion. How do you recharge your faith? What advice do you have for entrepreneurs? Summarize your sharing in one sentence!
Mao Jiehao: RWA is still in its early stages; June 2025 is the starting point, and we may see an explosion between 2027 and 2030. Stablecoins are key; after the Hong Kong legislation is implemented in the second half of the year, the volume of fiat to stablecoin conversion will determine the progress of RWA. My faith comes from accompanying the industry; over the past three years, I have seen the compliance frameworks in Hong Kong, Singapore, and the EU gradually become clearer from DePIN to RWA. Maintaining curiosity and patience has allowed me to continue deepening my involvement. My advice to entrepreneurs:
Focus on familiar fields: Combine your resources (China, Hong Kong, the U.S.) and concentrate on mature compliance tracks like green energy and DeFi.
Learn from successful cases: Such as BlackRock's U.S. Treasury and Ant Group's fund RWA, designing SPV + fund structures.
Embrace exploration: RWA is an interdisciplinary track that requires understanding of law, technology, and finance; find partners like Mankun to experiment together.
In one sentence: Break free from the limitations of asset tokenization and view RWA from a higher dimension; it is a bridge between Web 3 and reality. With patience and deep exploration, you will surely discover your blue ocean!
Wang Lei: Thank you, Lawyer Mao, for over an hour of valuable sharing! From the three major pitfalls to the compliance path in Hong Kong, from global trends to the exploration of non-standard assets, Lawyer Mao has guided RWA entrepreneurs with practical experience. Next Wednesday, we will continue the RWA special, discussing the technical implementation paths. Stay tuned! Thank you, Lawyer Mao; this concludes tonight's session.
Mao Jiehao: Thank you, Lawyer Wang, and thank you to the friends in the live chat for supporting Mankun. The future of RWA is promising.
Related Reading: RWA should have become a core module of DeFi but has become a "mirror" island.
Original text: “Mankun Senior Lawyer: Linking Reality! Current Status of RWA Compliance + Global Regulatory Trends”
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