In the traditional financial system, financial institutions hold a large amount of long-term assets such as loans, bonds, etc. These assets have relatively low liquidity and are difficult to realize in a short period of time. In order to improve the liquidity of assets, we are exploring the combination of these assets with emerging technologies such as blockchain to achieve digitalization and securitization of assets.

1、 Looking ahead to the future

The head of global institutional capital at Polygon stated that RWA represents a $30 trillion market opportunity worldwide. High net worth individuals and private equity funds will drive adoption in this field, as tokenization brings liquidity and accessibility to historically illiquid asset classes. With the entry of large private equity funds into this field, this number will significantly increase, and it is expected that this trend has already begun to occur and will continue, with an additional issuance of tens of billions of dollars in tokenized private assets in the coming years*** https://app.rwa.xyz/ In addition to stablecoins, the current RWA market size has reached $11.66 billion, with the most popular being tokenized money market funds such as BlackRock's BUIDL and Franklin's FOBXX. According to RWA.xyz's data, they manage approximately $520 million and $420 million respectively. Franklin Templeton's Onchain US Government Money Fund (FOBXX), listed on NASDAQ, has been deployed on Arbitrarum and Avalanche. Like Franklin Templeton, Grayscale operates tokenized RWA funds on Avalanche, but also offers a wide range of crypto investment trust portfolios with various tokens. The interest of institutions is expanding, and Goldman Sachs and other companies are exploring token treasury bond bonds. In addition, State Street Bank has partnered with Swiss cryptocurrency company Taurus to launch a service that supports RWA tokenization. These measures indicate an increasing driving force for integrating traditional finance into a decentralized financial ecosystem.

 

2、 Implementation of RWA in Hong Kong

Hong Kong lawmaker: It is necessary to timely formulate and introduce a legal system for the circulation of RWA tokens. Vice Chairman of the Hong Kong China Financial Association: RWA Investment is expected to open up to retail investors in Hong Kong and even globally. The next stage of Web3.0 development focuses on breaking down the barriers between the virtual world and the real world, allowing assets and funds to freely flow between the two systems. RWA is an important innovation that breaks down technological barriers and accelerates the integration of virtual and reality. RWA is a bridge connecting the digital economy and the real economy, establishing a value mapping with physical assets and IP products that exist in the real world, and enhancing the liquidity and trading of real assets. But any technology comes with challenges. We need to proactively strengthen supervision, enhance risk management, and provide technical ethics education. Virtual assets such as Bitcoin are not equivalent to Web3 and should adhere to the principle of technological neutrality. Controlling risks on the off chain asset side and controlling speculation on the chain transaction side. In the foreseeable future, the vast majority of RWA transactions in Hong Kong will be completed using compliant Hong Kong dollar stablecoins as carriers, and connected and interconnected with traditional finance through stablecoins. Without a compliant Hong Kong dollar stablecoin, there will be significant challenges in terms of convenience and security for RWA practices in Hong Kong. Therefore, the introduction of a regulatory framework for stablecoins may lay the foundation for the innovative development of the RWA ecosystem in Hong Kong, and with the prosperity of the RWA ecosystem, the role and value of Hong Kong dollar stablecoins as a bridge for external connection of Web3.0 will also become more prominent.

 

3、 Institutional performance
(1) Coinbase Asset Management is creating a tokenized money market fund to enter the RWA field.

(2) DWF Labs plans to support its portfolio in the RWA field by utilizing its Layer2 technology and Lumia Stream functionality. $ORN will also serve as a liquidity channel, aggregating traditional digital assets and integrating RWA tokenization platforms to make RWA assets liquid and tradable.

(3) Sam, CEO of Huoshi Group, stated that Energix is revolutionizing the efficient integration of distributed sustainable energy generation and consumption. We are proud to support them in promoting renewable BTM infrastructure in the United States and building bridges for tokenization of RWA projects.

(4) Ant Group issues its first domestic new energy entity asset RWA in Hong Kong, with UBS as the underwriter.

(5) OKX Hong Kong Executive Director Frank: RWA's development is a trend

(6) Vitalik expressed support for RWA and hopes to see more diverse RWA appearing on the chain, so that applications can use them without being subject to systemic risks from a single issuer or asset class.

(7) Securitize is a digital asset securities company under BlackRock, which has pioneered a fully digital integrated platform for issuing, managing, and trading digital asset securities that comply with existing regulatory frameworks in the United States. It has a community of over 1.2 million investors and 3000 businesses. BlackRock launches its first tokenized fund, BUIDL, on the Ethereum network.

 


4、 Summary
In recent years, it has gradually gained local recognition and institutional layout, and is also the mainstream sector with the best performance in 24 years to date. Between February and April 2024, RWA's total locked in value (TVL) surged by over 60%, reaching nearly $8 billion.
Major financial hubs such as Hong Kong and Singapore place greater emphasis on the development and launch of virtual currencies and RWA tokens.