RWA has become a little girl that anyone can dress up.

The term RWA has recently been ubiquitous. From international financial forums to industry entrepreneurial groups, everyone talks about 'asset on-chain' and 'real-world mapping,' as if anyone who doesn't mention RWA a couple of times is falling behind the industry's trends.

However, the hotter the moment, the more we need to calm down and clarify: what problems can RWA actually solve, and what foundational conditions are necessary for it to land.

Many people say RWA reshapes real-world assets on-chain; lawyer Honglin does not oppose this statement. But the premise of 'reshaping' is to truly break the original information barriers and settlement processes.

In many RWA projects I have encountered, so-called 'asset tokenization' is actually just rewriting data that originally existed in Excel, ERP, or custodial systems onto the chain. But the entire process remains the same: asset generation, value confirmation, income calculation, investment distribution—all these still rely on the project party's offline operations team to gradually handle, with the chain merely serving as an 'enhanced report.'

In this case, when you say it 'uses blockchain,' you are indeed correct; but to say it 'changes the logic of financial operations' is somewhat of a stretch.

Your so-called 'asset mapping' is not much different from drawing a balance sheet in Excel. You cannot simply switch the asset-related information from a paper contract to a JSON file written into the blockchain and then claim that you have achieved 'tokenization of real-world assets.'

You can record assets on the chain, but you cannot drive finance with the chain. Without breaking through this point, RWA will forever remain at version 0.1.

Two criteria to determine the authenticity of RWA.

Many believe the core of RWA lies in 'certification'—assets have sources, and there are registrations on the chain. But in reality, trustworthy data is just a basic premise; what truly determines whether RWA has financial value is whether it can complete trustworthy settlements, that is, whether the cash flow mechanism on the chain can operate.

Thus, the value distribution of RWA is progressive in two layers: the first is trustworthy data, and the second is trustworthy settlement.

The first layer: trustworthy data refers to whether the chain can record the state changes of real-world assets. This seems very 'technical,' but it is essentially a transformation of business processes. Sensors, custodial institutions, oracles, and other external interfaces must be able to push information to the chain in real-time, automatically, and objectively when an asset changes. This is the first threshold of RWA. Projects that can truly be called RWA must achieve 'as soon as an event occurs, the chain knows,' rather than having the operations department upload 'reports' at the end of each month.

In many RWA cases packaged by news that we know of, many projects still rely on manual operations: a folder contains various asset information, and at the end of the month, someone clicks a mouse to generate an on-chain summary. This 'post-upload' is essentially just 'on-chain bookkeeping,' far removed from the concept of blockchain being 'natively trustworthy.'

The second layer: trustworthy settlement is where the true value of RWA lies. In other words, whether the actions of profit distribution, principal repayment, default handling, and cost transfer can be executed automatically, be tamper-proof, and remain publicly transparent. To achieve this, there must be a currency unit on the chain, which means the participation of stablecoins.

Many projects overlook this point: data is available, contract logic is present, but at the settlement stage, it still relies on finance staff to manually make payments, or to 'simulate' cash flows through third-party platforms. Under this design, on-chain tokens are merely a symbol that 'looks like an asset,' but not a practical executable financial right.

Thus we say that there are two basic criteria for measuring whether a project is a legitimate RWA.

First, can your data flow be automatically recorded on the chain without relying on human effort?

You say you are doing new energy charging piles; is the energy, on/off status, and fault logs written directly into the chain from the sensors? You say you are doing accounts receivable financing; can the buyer's ERP system push the hash onto the chain as soon as the invoice is generated? You say you are selling the right to rental income from real estate; does the rental cash flow have a custodian bank API that provides second-level feedback?

If these actions still rely on an operations team to collect and manually input data, then 'on-chain' is a false proposition. You are not letting the system make judgments, but rather relying on 'people making snap judgments,' resulting in the same centralized process; only the tool for 'keeping accounts' has changed to blockchain. A fancier ledger has been replaced, but human errors still exist, with reputational risks and tampering risks remaining unchanged.

Second, can your cash flow be settled on-chain?

You say you issued a token for the revenue of new energy charging piles; once the charging fees enter the escrow account, are they immediately split into N stablecoins and sent directly to investors' addresses by smart contracts? You say you are doing accounts receivable financing; when a payment arrives from the buyer, can the contract immediately pay the principal, accrue interest, and deduct service fees according to the payment schedule? You say you sell the right to rental income from real estate; the moment the tenant clicks 'confirm payment,' does the rent stablecoin get transferred to the token holder on-chain, while the penalties and maintenance fees are automatically deposited into a risk pool?

If these actions still require finance staff to verify each transaction manually and make payments, then 'on-chain settlement' is just a pie-in-the-sky idea. Funds circle around the backend and then return to manual online banking; tokens become experience vouchers—visible but not redeemable.

True RWA should allow money to flow like data: verifiable stablecoin reserves, public allocation formulas, and contract addresses that can be checked at any time. Otherwise, no matter how fancy you describe the rights to income, investors will ultimately still have to queue for loans, and financial efficiency has not qualitatively improved.

This is not the future we want.

RWA without stablecoins is just playing rogue.

What we want is a structure that can truly operate: natively on-chain, able to run automatically, and can settle in real-time. Once data is generated, it is automatically written to the chain and cannot be tampered with; once funds are triggered, they reach their destination without human intervention.

RWA is not just a prettier table, but a new operational logic: the data must be trustworthy from the source, and funds must be settled on-chain.

To achieve these two points, one needs blockchain technology as the underlying information layer, and the other needs stablecoins as the value carrier.

Many talk about stablecoins, often saying they can improve cross-border payment efficiency, reduce costs, and replace banks. But what truly determines their value in RWA is not these macro advantages, but whether they can allow money to truly 'run' in the blockchain world. It should not wait for monthly or maturity settlements but can be programmed, called, and executed directly based on on-chain data.

The greatest significance of stablecoins is that they allow money to be programmed for the first time, enabling the execution of rules.

You can specify when it pays, to whom, how much, and even require that a payment only occurs after a certain event on the chain. It does not wait for someone to click a button; rather, it flows automatically, just like data.

Only with RWA applications of stablecoins can the entire lifecycle of assets— from generation, profit distribution, to exit and recovery— run entirely on-chain in the form of smart contracts; otherwise, no matter how many institutions participate or how many audits endorse, it is merely another form of a centralized platform.

That is why we say: RWA without stablecoin applications is just playing rogue.

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Author of this article: Lawyer Liu Honglin.