At the beginning of 2025, Hong Kong has released two explosive news. One is that Hua Xia Bank has launched the first retail tokenized fund in the Asia-Pacific region in Hong Kong (see Crypto Salads Asia-Pacifics first retail tokenized fund landed in Hong Kong! Web3 lawyers explain the on-chain innovation of fund tokenization and the future of RWA for more details); the other is that the Hong Kong Finance Minister announced that the second Hong Kong Virtual Asset Development Policy Declaration will be released soon, which will further innovate on how to better combine traditional assets with virtual assets.
In the eyes of many people, these two pieces of good news represent the implementation of the compliance of the RWA project. At the same time, combined with the news that the first RWA project in the mainland agricultural field, Malu Grape, was successfully launched on the Shanghai Digital Asset Exchange and successfully raised 10 million yuan, RWA tokenization seems to have completed the transformation from concept to implementation. Therefore, whether it is the asset side, the intermediary service side or the first-level investor, relevant work has been carried out in full swing recently, and there are a large number of discussions and project inquiries almost every day.
Crypto Salad has received a lot of project requests recently, and the underlying assets involved are also very wide, covering bonds, gold, rare metals, non-performing assets, agricultural products, property rentals, commodities, digital copyrights, fan economy...
As the discussion of various projects continues to deepen, each project owner will eventually return to the starting point and keep asking themselves:
Is my project suitable for RWA?
If my project is not suitable for RWA, then what project is suitable?
What are the requirements of RWA for underlying assets? Are all types of real assets acceptable?
What kind of coin is the token I issued? Is it a virtual coin?
If it is not a virtual coin, do people in the cryptocurrency circle have the motivation to speculate on assets and rights that are physically anchored (with relatively fixed value)?
......
Today, Crypto Salad will try to analyze these issues based on our practical experience.
Let me first state a conclusion:
The RWA path exploration that can generate the greatest value and is most suitable for us must be in the form of mainland assets + data compliance outbound + raising overseas funds, so that assets are controllable, data are credible, and funds can be raised.
1. How to understand RWA?
First of all, we need to clarify the definition of RWA. RWA is the abbreviation of Real-World Assets Tokenization, which is to package and store the value, operation, income and other data of various assets in the real world on the blockchain to form digital tokens (i.e. digital tokens), and then issue financing and trade with investors on the chain.
Many companies are attracted by the hot cake of RWA financing. So, lets first talk about what characteristics RWA has in financing?
Since RWA has a “tokenization” process that is similar to the “securitization” process of assets, and also includes the ICO (initial public offering) of coins, which is similar to the IPO (initial public offering), we might as well compare them.
1. Focus on underlying assets
The biggest difference between the two is that RWA is centered on underlying assets rather than having no underlying assets at all. We can call this type of token an Asset-Backed Token (ABT).
Since the underlying assets are the core, it means that its financing behavior is not centered around the credit of the subject, but relies on the evaluation of the value of the underlying assets. Therefore, whether a company is profitable in the long term is not the most critical factor for RWA. As long as a batch of assets owned by the company has value and potential, then these assets can be packaged and put on the chain for financing. This step undoubtedly brings more imagination and possibilities to the company.
Which assets are suitable for RWA?
From the perspective of the effect of asset chain, RWA projects are tailor-made for projects with high value, high quality, need to improve liquidity and lower investment threshold. Some project types that are easier to accept and understand include:
Stablecoins: issued with the support of fiat currency or cash equivalents, such as the earliest digital dollars USDT and USDC, can be said to be the most successful RWA projects on the market.
Bonds and Stocks: Tokenize traditional financial assets such as bonds and stocks to improve liquidity and market access, such as USYC, which is based on U.S. Treasury bonds.
Real estate: Lowering the barrier to entry for real estate investment through tokenization, such as RealT.
Commodities: Physical assets such as carbon credits, precious metals, such as PAXG which is pegged to gold.
2. Financing rate
RWA uses blockchain technologies such as smart contracts to digitize the entire financing process on the chain, and forms a structured and standardized data, making the data a standard product. From asset evaluation, token issuance to fund raising, combined with the openness, transparency and on-chain traceability of blockchain, the financing rate can indeed be greatly improved.
3. Asset liquidity
RWA tokenizes, fragments, and internationalizes these real-world assets through blockchain technology. For example, few people can afford a house worth 50 million, but if you divide a house into one million pieces, everyone can afford it. It is like installing wheels that everyone can step on for the companys assets, allowing them to flow quickly in the market. And better liquidity brings the possibility of quick action to every investor, making it easier for them to have the willingness to invest.
Although a coin can represent one in hundreds of thousands or one in hundreds of millions of houses, the difference will be affected by the sentiment fluctuations in the secondary market, but there is a relatively stable benchmark, which is the house itself, that is, the value of the underlying asset.
2. Challenges faced by enterprise RWA
Since the benefits of RWA are so attractive, why are there still so few examples of mainland enterprises implementing RWA? Crypto Salad summarizes the two most common challenges faced by enterprises from practice:
1. Compliance Challenges
RWA tokenization is naturally inseparable from coins, but mainland China explicitly prohibits virtual currency financing trading platforms from exchanging, buying and selling virtual currencies or providing pricing services. This is why compliance has a very high priority in the RWA project.
Article 3 of the Notice on Further Preventing and Dealing with Risks of Speculation in Virtual Currency Transactions:
Virtual currency-related business activities are illegal financial activities. Virtual currency-related business activities such as the exchange of legal currency and virtual currency, the exchange of virtual currencies, the purchase and sale of virtual currency as a central counterparty, the provision of information intermediary and pricing services for virtual currency transactions, token issuance financing, and virtual currency derivatives transactions are suspected of illegal financial activities such as illegal sale of token tickets, unauthorized public issuance of securities, illegal operation of futures business, and illegal fundraising. They are strictly prohibited and resolutely banned in accordance with the law. Those who engage in related illegal financial activities that constitute a crime shall be held criminally liable in accordance with the law.
Therefore, mainland enterprises must plan a complete compliance path to achieve RWA.
Tokens cannot be issued in China, the underlying assets can be domestic or overseas, the entire project can be linked domestically and overseas, or it can be only overseas to meet the compliance requirements for coin issuance.
When it comes to cross-border projects, the first step that cannot be avoided is asset financialization .
Since RWA projects must be linked to the supervision of various jurisdictions, if companies do not link their products to standard products (stocks, bonds, shares), it will affect the legal exercise of the companys rights. In an environment of imperfect global digital supervision, the legitimacy of RWA depends on its adaptation to the traditional legal framework. If it is not linked to a standard product, it will not be possible to use the existing legal infrastructure to reduce regulatory friction and ensure the effectiveness of legal exercise. Therefore, only after asset financialization can corporate assets be tokenized through smart contracts.
2. How to make investors interested?
After the token is issued, how to generate value and make people willing to pay for it is a real pain point, and it is also one of the most common questions that companies ask when consulting Crypto Salad.
To deeply understand this issue, we might as well learn some knowledge about digital currency first.
First of all, can you tell me what are the differences between the mainstream currencies we are familiar with (such as BTC), altcoins, air coins, dog coins, pixiu coins, meme coins and other digital currencies on the market?
These coins differ slightly in nature, but the main difference is in the underlying mechanisms :
The underlying mechanism of mainstream coins, such as BTC, is PoW (proof of work) competition for computing power. After ETH switched the underlying mechanism to PoS (proof of stake), the issuance cost has been reduced by participating in verification through staking tokens. After entering the Web3 era, the technical threshold and issuance cost of issuing tokens have dropped another step, and standardized protocols such as Ethereum ERC-20 have emerged, which enable the issuance of coins to be completed quickly through code templates. In the past 2024, it was an era when typical air coins were flying all over the sky, and a large number of coins were deployed on Solana and Base chains.
It can be seen that issuing tokens is really not difficult in the world of Web3.
If issuing coins is not difficult, then is listing difficult?
Crypto Salad tells you that it is not difficult, at least it is not difficult to achieve circulation on the chain. If the company wants to be listed on the exchange (referred to as listing), it is better to be listed on a mainstream exchange, which is a little challenging. But from our experience, if a token has a large enough influence, it is likely to be listed on the mainstream exchange. If a coin with relatively small influence passes the regulatory review of the exchange, it can also be listed on the mainstream exchange.
However, since Hong Kong began issuing licenses to compliant virtual asset exchanges, companies have focused their attention on these licensed and compliant exchanges. How to seize the opportunity to list coins on compliant exchanges has become the most concerning issue for companies.
Here we need to carefully define a concept: what exactly are the compliant firms?
CryptoSallu believes that a compliant exchange refers to an exchange that has obtained a virtual asset trading license under the laws and regulations of the place of registration. There is also a potential compliant exchange, that is, the place of registration remains neutral to the virtual asset regulatory policy and does not crack down on virtual asset-related businesses. From the understanding of anything is allowed unless prohibited by law, this type of exchange cannot be defined as an illegal exchange. Of course, driven by governments led by the United States, the global crypto regulatory policy framework is becoming clearer and clearer, and the definition of compliance in various countries will become clearer and clearer in the future.
At this point, we have solved the technical issues of issuing coins and the problem of listing on compliant exchanges. At this point, the tokens in the RWA project have finally come to the secondary market and are ready for circulation. Now we are back to the question at the beginning of this section: Who will invest in such tokens?
Investors willing to purchase RWA tokens need to meet two prerequisites: have the motivation to buy + be a (foreign) qualified investor
In the Web3 world, the value of a token is determined by its working principle, such as how the token is generated, token economics, and circulation. Most buyers enter the Web3 market with the intention of buying a thousand-fold coin or hundred-fold coin. The recent Trump coin is a typical example, with a maximum increase of 800% in just a few months. In the final analysis, it is actually a virtual coin with no fundamentals and difficult to value. It is just driven up by the emotional enthusiasm of players.
In comparison, in RWA, tokens and assets are anchored. The value of assets is relatively stable and it is impossible to increase thousands of times. At this time, if someone is willing to pay for RWA tokens, it is likely that they are attracted by the high value of the tokens. This can only be achieved by the underlying assets themselves. At this point, we will find that when tokens are linked to assets, it is somewhat contrary to the popular token gameplay in the current Web3 world. The RWA token itself has limited room for appreciation, and investors will enter the market only if they are interested in the assets themselves.
Secondly, under the premise of secondary circulation compliance, the exchange will generally have entry requirements for investors in the spirit of protecting investors. For example, the tokenized fund released by Huaxia Bank is only available to investors in Hong Kong.
Those who are interested must also meet the requirements of (overseas) qualified investors, which greatly narrows the scope of investors.
3. How will the RWA project be implemented? What preparations should enterprises make? What can Crypto Salad do for you?
1. Preliminary screening of feasible RWA projects
In practice, we find that many companies are only interested in RWA projects and believe that they have assets that can realize RWA, but they cannot really explain what the real plans for the underlying assets are, and they don’t even have a good understanding of the asset status of the company itself.
To use an inappropriate analogy, it is like when a child wants to study abroad. Before looking for an agent, parents should first fully understand their childs situation, determine a preliminary study abroad location and budget, and then match them with the agents resources to explore the probability of success.
Therefore, enterprises should first fully understand their asset situation and finalize the underlying assets, and the underlying assets must be linked to the operation of the enterprise. This places relatively high demands on the professional personnel of the enterprise. The enterprise must have cross-domain talents who not only understand the operation of the enterprise, understand the highlights of the enterprise and the assets themselves, but also understand the gameplay of Web3 . Before starting the project, the enterprise must first realize that RWA is a comprehensive project across three circles: industry, finance, and digital. Talents who are both inside and outside are indispensable.
2. Technology and compliance first, putting double risks in the forefront
Once the initial screening is completed, the Crypto Salad team will work with the companys head to study the RWA plan in depth. This includes designing a token economic model, developing a technical architecture for issuing coins, data collection methods for the project, cost and cycle evaluation during the process, and compliance paths, etc. Due to the different nature and assets of the enterprise, the compliance requirements for commodity operations and circulation in various regions, countries, and laws and regulations are different. We help companies put technology and compliance first and put dual risks in front.
3. Project implementation and completion of primary market fundraising
After the plan is completed, the project will enter the execution stage. The core goal of the Crypto Salad team at this stage is to help enterprises implement the project. Specifically, it includes in-depth due diligence, writing white papers, developing and deploying smart contracts and a full set of legal documents, and connecting with the resource parties of the entire process of the RWA project. In the end, the project party will realize asset tokenization.
4. Go to the exchange for planning, conduct secondary market circulation and subsequent operation management
At this stage, it is necessary to make minor adjustments based on the policies at that time, the needs of the enterprise side, and the changes in investors, so as to help enterprises complete the circulation in the secondary market. Our overseas partners are familiar with all licensed exchanges and mainstream exchanges. At the same time, as a team of Web3 lawyers with long-term experience in investment and financing services for Chinese companies, we will customize investment and financing legal documents for enterprises, synchronize regulatory policy changes in real time, and provide dynamic compliance adjustment plans.
5. Community contact and promotion, to be a continuous comprehensive consulting consultant for enterprises
Generally, at this stage, companies need community operation plan design and implementation support, including establishing brand communities, configuring community management tools, localizing multilingual content, etc.; they need to connect with media and KOL resources and adjust communication strategies in a targeted manner. Companies need to monitor and optimize operational processes, such as regularly reporting data such as asset on-chain rates, using token release and destruction mechanisms, and implementing market value management strategies.
IV. About Us
1.What kind of team is Crypto Salad?
The Crypto Salad Team is affiliated to Beijing Yingke (Shanghai) Law Firm and was co-founded by senior partner Sha Jun and a number of outstanding lawyers in different fields.
The Crypto Salad team has extensive practical experience in blockchain technology compliance, digital asset legal supervision, cross-border investment and financing framework building, and legal consulting in emerging technology fields. It has provided professional legal services to more than 300 Web3, AI and financial companies and more than 500 practitioners.
Yingke Law Firm was established in 2002 and is headquartered in Beijing. It has 123 branches in mainland China and 1 Guangdong-Hong Kong-Macao joint law firm. Yingkes global legal service network covers 196 cities in 103 countries and regions, and has provided satisfactory legal services to 1.5 million companies at home and abroad.
Therefore, the Crypto Salad team is one of the few professional Web3 teams on the market that has complete RWA instance experience, can accurately grasp the pain points and needs of enterprises, and provide one-stop full-port and full-link services.
2. Our team composition
Legal and compliance experts: Ensure that the asset tokenization process is legal and compliant, review the legal effect of smart contracts, and develop a framework for investor rights protection to avoid regulatory risks.
Traders and strategic advisors : formulate market strategies and capital operation plans, optimize asset liquidity and manage risks, and promote efficient implementation of projects.
Blockchain technology expert: responsible for building and maintaining blockchain infrastructure, from underlying architecture design to smart contract development, to ensure accurate mapping of on-chain data and off-chain assets
Financial experts: provide asset valuation, financing strategy and risk management analysis, design structured financial solutions, and improve asset liquidity and investment returns
3. What RWA full instance experience do we have?
A Hong Kong bond company project
Provided a complete bond tokenization design for a bond company in Hong Kong, helping the client achieve seamless integration of the traditional bond market and blockchain technology.
By tokenizing bonds, customers can improve the transparency, liquidity and efficiency of transactions. We have also designed a bond issuance and trading system to ensure the compliance, market-oriented operation and efficient liquidation of bonds.
A Korean fashion platform project
We designed an NFT-RWA trading system for a Korean fashion platform, focusing on integrating the trading of fashion products and the authentication and traceability of collectibles into blockchain technology.
This solution provides fashion platforms with verifiable product ownership proof and digital asset support, allowing consumers to purchase and trade fashion brand products with confidence, while enhancing the brands market transparency and user trust.
A Malaysian oil refinery company project
Designed an RWA solution for petroleum products for Petronas, combining the futures concept with the oil processing process and promoting virtual assets.
The solution enables the company to convert futures contracts for oil products into tradable assets through tokenization, while automating the management of asset transactions, price adjustments and risk control through smart contracts, thereby improving asset liquidity and enhancing market transparency.
Special statement: This original article only represents the personal views of the author of this article and does not constitute legal consultation and legal opinions on specific matters. If you need to reprint, please contact Crypto Salad.
