RWA in the Eyes of Hong Kong Institutions: Coexistence of Regulation and Opportunities

Recently, several executives from well-known virtual asset institutions in Hong Kong engaged in an in-depth discussion on the topic of RWA(Real World Asset). They believe that the regulatory approach for RWA should be based on its underlying assets. If the underlying assets are traditional financial assets like stocks, they should be managed according to the existing regulatory framework. This means that some RWA products may be open to retail investors.

Experts point out that the key reason why ordinary users choose to purchase RWA is the yield. If RWA can provide a higher risk-free return than traditional assets, it will attract investors. For example, after tokenizing U.S. Treasury bonds, investors can not only earn bond yields but also earn additional returns through staking and mining. This model of stacked returns is very attractive.

From a compliance perspective, RWA involves the issue of asset verification in the real world and must comply with legal requirements. Licensed institutions have an advantage in this regard, but compliance requirements such as KYC also impose certain limitations. In the future, it may be necessary to further improve infrastructure such as stablecoins to facilitate the smoother entry of virtual asset funds into the RWA market.

For institutions with a license number 9, they can leverage their advantages in the traditional financial sector to assist Web3 projects in handling real-world assets, becoming a bridge connecting the two worlds. At the same time, it is essential to gain a deeper understanding of the advantages and revenue models after tokenization to provide better products for clients.

It is worth noting that a new trend has emerged this year - an increasing number of investors holding virtual currencies wish to invest in traditional assets but do not want to convert their funds back to fiat currency. How to meet this demand is a key point that licensed institutions need to communicate with regulators.

Overall, the RWA field presents both opportunities and challenges. As a center for financial innovation, Hong Kong's exploration of the development path for RWA within a regulatory framework will provide valuable references for the entire industry.