Author: Wu Says Blockchain

Guest lineup:

Yao Shijia, Co-Chief Analyst of the Industrial Policy Research Institute at Guotai Junan Securities

Qiao Zheyuan, Head of Virtual Asset Business Department and Partner at JunHe Law Offices

Zhao Yao, Senior Research Fellow at the National Financial and Development Laboratory

Chen Bin, General Manager of Wanxiang Blockchain

Zhao Ying, Partner at King & Wood Mallesons

Source: 2026 Hong Kong Web3 Carnival

TL;DR: Chinese Asset RWA Regulatory Logic and Key Points for Going Abroad

· Clarification of policy logic: "Document No. 42" is not a comprehensive blockage, but rather creates an effective connection with early risk warnings. Regulatory authorities strictly separate RWA (financing tools) from stablecoins (payment tools) and clarify compliant paths for tokenization of ABS-like assets, equity nature, and pure foreign debt credit bonds for going abroad.

· Hong Kong's strategic hub status: A clear multi-department filing process has been established for domestic assets to issue abroad. Hong Kong, with its mature compliant framework for tokenized securities and comprehensive No. 1 license, VATP distribution system, inherently has channel advantages for the implementation of Chinese RWA assets.

· From standard assets to "twin digital assets": The industry widely believes that the true value of RWA lies not only in packaging traditional financial products (such as money market funds), but also in utilizing the Internet of Things and oracle technology to track full lifecycle data of advantageous Chinese industries such as computing power and new energy.

· Advantages of going abroad under great power competition: Amid the current macro backdrop, the "twin digital assets" deeply rooted in China's technological innovation show unique vitality. These technology assets, characterized by 24/7 trading, are expected to attract global liquidity, which in turn benefits the real economy and the internationalization of the Renminbi.

· Core conclusion: The compliant door for Chinese assets to go abroad through RWA has been opened. The primary task now is to promote the first batch of compliant projects to complete the full process, while the long-term vision is to form a broad consensus and value recognition similar to "panda bonds" among global investors.

Interpretation of "Document No. 42" and Regulatory Logic

Yao Shijia: Welcome everyone to this roundtable forum, whose theme is the opportunities and compliance challenges for Chinese assets to go abroad through RWA. Today, we have invited lawyer Qiao Zheyuan, lawyer Zhao Ying, Dr. Zhao Yao, and General Manager Chen Bin to engage in in-depth communication with us.

The first topic everyone is most concerned about is undoubtedly policies, especially after the release of "Document No. 42" at the beginning of this year, interpretations have varied greatly. We have heard two statements, one suggesting that the issuance of RWA has officially begun after the release of "Document No. 42"; another arguing that the document merely leaves a crack in the door for RWA. I would like to ask everyone for their thoughts on these two statements.

First, let’s have Zhao Ying from King & Wood Mallesons interpret this for us. You are essentially one of the main contributors to policy formulation; how do you view the logic and policies regarding regulation?

Zhao Ying: "Document No. 42" was issued in February of this year. Prior to that, as everyone knows, in December of last year, the China Internet Finance Association and six other industry associations issued a “Risk Warning,” which for the first time mentioned the concept of tokenization of real-world assets and highlighted several types of risks and business activities that cannot be conducted. On this basis, "Document No. 42" was released in February. Before the document came out, many friends asked me, doesn’t this seem contradictory? In December it was said that we cannot engage in this, so is it possible after February? But upon closer inspection, these two documents are transitional and connect rather than conflict with each other.

In the "Risk Warning" from December, after discussing the risks of tokenizing real-world assets, it emphasized two activities that should not be conducted. This can be broken down into two sentences: the first is that domestic institutions and individuals must not engage in such activities domestically; the second states that foreign institutions must not come to China to provide relevant services. The document clearly indicates that domestic entities cannot conduct these activities domestically, and foreign entities cannot come to conduct business in China. However, the "Risk Warning" did not mention whether domestic entities and assets can issue abroad, leaving this gap to be addressed by "Document No. 42." "Document No. 42" explicitly states that domestic entities can issue three types of tokenized products abroad through filing and approval by regulatory authorities: ABS-like tokenization, equity nature tokenization, and pure foreign debt credit bond tokenization.

From this, it can be seen that it is not as contradictory as understood, with December saying it cannot be done, and February presenting it as if it could; instead, these two documents regulate different contents. The prohibition is clearly written in December related to domestic tokenization activities, while it opens the path for domestic assets to engage in RWA tokenization through compliant means abroad.

What is the logic behind this? "Document No. 42" speaks of stablecoins and states that without the consent of the relevant departments in accordance with the law, no foreign institution may issue stablecoins pegged to the Renminbi abroad, nor is it allowed domestically. After everyone sees this, they may think that stablecoins currently cannot be implemented.

Many believe that since they are all tokenization businesses supported by underlying assets, shouldn’t RWA also be interpreted similarly? It must be clarified that while stablecoins and RWA may appear to be a type of tokenization business and product, they are fundamentally different. Stablecoins pegged to fiat currency serve to a degree the function of fiat money, which is exactly what "Document No. 42" states, hence they cannot be run without consent from relevant departments. Qualifying stablecoins pegged to fiat currency as payment tools serve to replace sovereign currency, while the underlying assets of other types of RWA products are financing tools, corresponding to traditional debt and equity. Therefore, according to the principle of functional regulation, traditional financial departments responsible for regulating stocks and bonds will oversee this, specifically the CSRC, NDRC, and SAFE according to traditional business divisions. The CSRC is responsible for the regulation of tokenized assets and equity tokens, while the NDRC and SAFE oversee foreign debt tokens.

This illustrates the different regulatory logics for stablecoins and virtual currencies, as well as the division of labor within financial regulatory departments.

Yao Shijia: Thank you, lawyer Zhao Ying. Next, I’d like to ask Dr. Zhao Yao from the National Financial and Development Laboratory, who combines practical banking experience with academic background, how do you view the new regulations?

Zhao Yao: Thank you friends, thank you guests, I’ll just share a simple point of understanding. The interpretation of the policy was very comprehensive and accurate from lawyer Zhao Ying; last year during our policy research, we made a minor suggestion on the accuracy and legality of academic terminology.

First, "Document No. 42" mainly targets tokenization. Although it is all called Tokenization in English, it has various different meanings in the international context: one is the tokenization of currency, another is the tokenization of electronic payment, and there is also Tokenization in Crypto. The same term can express very different meanings in different contexts.

"Document No. 42" opposes the tokenization of currency; it opposes developing towards a monetary direction, partially replacing or possessing features of legal tender. The core premise of legal currency is its accounting function (Unit of Account). Central banks of any country are very cautious about the tokenization of currency, as highlighted by the U.S. opposition to Libra in 2019.

The technology used in RWA is Tokenization, but it does not serve a monetary function; rather, it serves as an asset and value storage function, constituting a financial product. The Chinese regulatory authorities have always been very rigorous, as noted in the "Records of the Grand Historian" stating "the names must be correct for the words to be smooth." Thus, "Document No. 42" opposes monetary tokenization but does not state opposition to asset on-chain processes. Currently, the official terminology has started to use a better Chinese translation, termed "tokenization".

For instance, securities and certificates can be tokenized once they are on-chain, but it cannot be said that it is tokenization. Whether in practice or academic research, particularly in the Chinese context, distinctions must be made. Just as long ago, Crypto Currency was a widely used colloquial term, in the international regulatory and academic environment, it is no longer referred to as a cryptocurrency, but as a Crypto Asset. One pertains to Currency, while the other pertains to Asset; their legal properties, functions, and audiences are vastly different, leading to different regulatory frameworks and attitudes.

Filing Process, Hong Kong Opportunities, and Industry Benefits

Yao Shijia: Thank you, lawyers Zhao Ying and Zhao Yao, for helping us clearly distinguish between monetary function and asset properties from the regulatory viewpoint. Next, I would like to consult lawyer Qiao Zheyuan from JunHe. As a law firm involved in various benchmark projects, how do you view "Document No. 42" in practical project selection? Which aspects can be done, which cannot?

Qiao Zheyuan: I believe that after the release of "Document No. 42" and the guidelines for domestic asset tokenization, the biggest difference is that previously there was no particularly clear filing process for tokenization projects based on domestic assets; however, now, after the release of both documents, there is a very clear and specific compliance filing process.

According to "Document No. 42," domestic institutions wanting to issue tokenization, even if issuing abroad, based on domestic assets, need to obtain filings and approvals from the State Administration of Foreign Exchange, NDRC, and CSRC. During the filing process, a filing report, a complete set of documentation for offshore issuance, qualifying information on the domestic entity, and specifics about the domestic assets need to be submitted. The intermediary institutions involved also need to guarantee the accuracy of the filing information. This set of processes must be followed for tokenization of domestic assets.

If the tokenization is based on foreign assets, the overall distinction is not significant; there is no need to go through domestic approval and filing processes. The only thing to note is that if it involves foreign financial institution subsidiaries, they may need to be incorporated into the domestic compliance risk control system.

Overall, this represents an opportunity for the Hong Kong market. Future tokenization projects based on domestic assets can legally issue in Hong Kong, which has a complete set of compliance processes related to Tokenization Security (the process and circular for obtaining authorization from the SFC). Additionally, Hong Kong has a very comprehensive No. 1 license and VATP distribution system, which can naturally leverage traditional finance’s sales channels for PB products, DCM products, and fund products as well as channels for compliant exchanges; this can greatly assist domestic assets in attracting foreign investors.

Yao Shijia: Thank you, lawyer Qiao Zheyuan. Finally, I would like to ask about the overall opportunities and challenges brought by "Document No. 42" from an early industry builder's perspective: General Manager Chen Bin of Wanxiang, what are your thoughts?

Chen Bin: It should be said that "Document No. 42" has come at a timely manner, and for the industry, this is very beneficial. Just now, Dr. Zhao Yao and lawyer Zhao Ying also mentioned the nuances in wording. "Document No. 42" is the first time that official terminology connects Token and tokenization. In the industry context, there are native tokens (Coin) on public chains, and the various other tokens issued on them are called tokens, with asset on-chaining termed tokenization (代币化), which is a term widely recognized in the global industry.

This year has been particularly interesting in terms of terminology: in the past, "tokenization" was a term to describe that tokens are not viewed well in China; however, this time, "Document No. 42" is the first time in national formal regulations that tokenization has been aligned with international terminology, which is quite good.

Since 2017, two distinctly different tracks have formed domestically; domestically called "chain circle" for alliance chains, stripping away token features in blockchain technology and purely serving as a technical foundation for right confirmation. However, we have seen that after a significant investment in the infrastructure of numerous domestic alliance chains, there has not been particularly good commercial application value generated, because a crucial element of blockchain is tokens, payment, settlement, and circulation capabilities. This time, the national "Document No. 42" has clarified the compliance and legality of tokenization in specified fields, providing a very good framework and regulatory expectations, which is indeed excellent for the industry.

Asset Selection: What Types of Chinese Assets are Suitable for Going Abroad?

Yao Shijia: After discussing regulations, I believe everyone now has a clearer understanding of the regulatory mindset. Next, let’s talk about assets, as the theme here is Chinese assets going abroad through RWA. The RWA industry currently faces some pain points, such as the scarcity of quality issuers and innovative product offerings, challenges in rights affirmation, and the backdrop of great power competition. What types of Chinese assets can go abroad through RWA? First, let’s ask lawyer Qiao Zheyuan, what types of Chinese assets do you favor in practice?

Qiao Zheyuan: Our team has completed over ten successful tokenization projects in the past four or five years, with underlying assets including gold, gold mines, U.S. treasury bond funds, consumer loans, stocks, bonds, and funds. I believe there is no fixed standard indicating which asset is definitively best; in the end, it comes back to protecting investors and benefiting them. The ultimate goal is to create financial products that attract investors, such as those with relatively lower risk, aiming for higher yields, with clear property rights, and ideally, asset classes that are widely recognized and possess good liquidity.

In terms of programs, it is not always the case that the more complex, the better. If a program is incomprehensible, it is probably not good. We hope to see structures where property rights are clear, and that there are no significant legal obstacles leading to investor losses. Under these premises, the structure should maximize yields while minimizing commercial and legal risks, and the token should have good liquidity. In the future, it would be ideal if tokens could also have financial efficiency, allowing for staking (Staking), enabling better integration with the Web3 world. Meeting these factors constitutes a relatively good project.

Yao Shijia: I would like to ask General Manager Chen Bin of Wanxiang if you have any selection criteria or rankings from your internal perspective?

Chen Bin: From a financial product perspective, the criteria for ranking are similar, primarily focusing on clear property rights and stable returns. Currently, deployed projects like ETFs and money market funds represent standard financial products that are relatively straightforward to scale.

However, for true RWA, besides purely financial paths, there is also the native on-chain approach. In traditional finance, there are several layers of isolation between financialized targets and underlying assets; however, on-chain investors prefer clear visibility of what underlying assets truly are and whether they can be tracked by technology.

Some native assets, such as computing power assets and new energy assets, can utilize IoT technologies to collect data from each revenue-producing segment from the source, placing trusted data onto regulatory chains and alliance chains while concurrently issuing tokens on public chains. Through the oracle mechanism, the status and income of the asset can be clearly understood at every moment. This type of asset will likely have more features in the long run, making it easier for regulatory acceptance.

RWA assets themselves can utilize technological means for tracking, which is the biggest difference from traditional financial products. From the first principles perspective, the ability to accurately track underlying assets through new technologies marks a significant change in the traditional financial intermediaries' asset packaging models; I believe such assets are where the true value of RWA development lies in the future.

Yao Shijia: Thank you, General Manager Chen Bin. You’ve raised a direction that is very characteristic of Wanxiang, utilizing technological advantages to enhance data traceability. Next, I’d like to ask lawyer Zhao Ying from King & Wood Mallesons whether you can share what types of assets align best with regulatory preferences and frameworks?

Zhao Ying: I entirely agree with General Manager Chen Bin’s viewpoint, as assets that can naturally utilize blockchain for distributed data collection and on-chain placement are very suitable for RWA. Original assets are centralized, making traditional packaging and issuance manageable; whereas for distributed assets, blockchain and RWA hold more advantages.

From a regulatory perspective, aside from excluding non-compliant assets in terms of industrial policy, ambiguous ownership, or illegal conduct by actual controllers listed on the negative list, in the short term, regulators are more willing to see assets with good qualifications and strong credit, because they present lower risks.

From a fundamental logic standpoint, assets with established landing guidelines for ABS tokenization can now proceed, as long as they meet the principal conditions for issuing ABS. The basic requirements are twofold: one is to have a stable and predictable cash flow; the second is to realize actual sales while ensuring asset and risk isolation. If the next step involves unlocking equity nature RWA, it can be anticipated that regulators will still need to see clear cash flow and profit models while being able to communicate the business model to investors and regulatory authorities.

Yao Shijia: Thank you, lawyer Zhao Ying, for clarifying the negative list and providing very clear signals for interpretation. Finally, I would like to ask Dr. Zhao Yao, if we juxtapose Chinese assets within the global context, where do our advantages lie?

Zhao Yao: Last year, we conducted a historical study, mapping the proportion of U.S. intellectual property in the global market from the 1970s alongside the U.S. dollar index on the same time axis, discovering a strong positive correlation. The data clearly illustrates that technology plays a dominant role in the gold content of U.S. dollar hegemony.

What path should Renminbi internationalization take? The most actionable route remains centered on technology. Everyone has noted that after the launch of DeepSeek, global investors have expressed keen interest in the technological prowess of China and assets priced in Renminbi.

If we classify digital assets into two categories: native digital assets and twin digital assets. For RWA, twin digital assets are excellent trading categories, such as charging piles, AI, and fields combining AI with Web3. As these domains deepen their integration with the real economy, twin digital assets will display powerful vitality, deeply rooted in the driving force of China's technological innovation.

Moreover, for traditional assets that have already undergone ABS transformation, pushing forward RWA should avoid "looking for nails with a hammer," and instead leverage the traceability characteristics inherent in technology and the 24/7 trading capabilities. If equity assets with strong technological attributes can achieve 24/7 trading in the future, they could attract global financial liquidity, significantly propelling the development of the technology industry.

Implementation Path and Industry Outlook

Yao Shijia: After discussing the assets, let’s briefly touch upon the path. Lawyer Zhao Ying, please talk about what kind of clearing and settlement paths align best with regulatory frameworks for assets? Should they utilize CBDC, international stablecoins, or fiat currency?

Zhao Ying: According to the requirements of "Document No. 42" at present, the overall path can be divided into domestic and international segments. Domestically, the focus is on asset selection, rights confirmation, due diligence, auditing, and on-chaining, after which a report needs to be submitted to the CSRC; after obtaining filings, the focus shifts to international blockchain selection and token issuance, while establishing SPVs is also involved.

As for the settlement path, since it is to be carried out abroad, any settlement method that complies with local regulatory requirements is acceptable. Whether through stablecoins, fiat currencies, or tokenized deposits, all are viable choices. However, when funds ultimately return for financing domestically, it will necessarily be in the form of fiat currency (Renminbi or other foreign exchanges) via traditional foreign exchange channels or mBridge (multilateral central bank digital currency bridge).

Yao Shijia: Thank you, lawyer Zhao Ying. Throughout today’s forum, it is evident that opportunities outweigh challenges. As a final brief question, over the next year, what do each of you anticipate happening within the framework of Chinese assets going abroad through RWA?

Qiao Zheyuan: I most look forward to a project truly obtaining filing approval, allowing us to see a successful case going through the entire process and gaining wide recognition from overseas investors.

Zhao Yao: From a financial market perspective, safe assets are needed, hoping that RWA on-chain can establish a fundamental support for a new financial market.

Chen Bin: I’m thinking not just of a year, but looking further ahead. Blockchain technology emphasizes consensus, and I hope in the future there can be unified recognition concerning Chinese RWA assets, similar to the past "panda bonds," so that Chinese assets are generally accepted by global investors.

Zhao Ying: After business normalization promotion, I hope to see an increasing number of Chinese domestic assets issued through compliant channels in Hong Kong RWA, thus attracting more international capital flows into Hong Kong and fostering positive interaction.

Yao Shijia: Thank you to all four guests present today; this roundtable forum comes to a close.

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