When Tether's USDT and Circle's USDC dominate the stablecoin market, the market will naturally seek new growth stories. Some research institutions predict that the tokenization of Real World Assets (RWA) could bring a market space worth trillions of dollars, but this figure is more of a vision than a reality. According to McKinsey's analysis in 2025, the current average daily trading volume of global stablecoins is only about $20 to $30 billion, accounting for less than 1% of global capital flows. In this context, RWA is seen as the 'next wave of opportunity.' Why is that?
Supporters believe that by packaging traditional low-liquidity assets such as real estate, private equity, artworks, and even carbon credits and intellectual property into tokens on the blockchain, sustainable and non-correlated real returns can be introduced to DeFi. Tokenization allows large assets to be divided into smaller fractions, enhancing transparency and trading efficiency, which sounds like an improvement to the financial system.
But in Asia, especially in Hong Kong, many new issuers seem not to focus on the vision of 'inclusive finance.' They believe that merely issuing US dollar stablecoins serves to 'carry the sedan chair' for giants like Tether and Circle; the real profits come from issuing, managing, and trading RWA tokens themselves—both revitalizing stagnant assets and profiting from issuance fees and trading commissions. This is the core driving force behind the RWA craze.
Between ideals and reality, RWA faces an unavoidable 'triangle dilemma':
Asset rights affirmation and custody: Trust is the cornerstone of RWA. However, in reality, proving that on-chain tokens correspond to a set of unencumbered real estate or a genuine artwork is not easy. Industry analysis indicates that real asset tokenization projects generally lack clear ownership identification mechanisms, and 95% of NFTs in the market are nearly worthless due to easy issuance. When disputes arise, the legal validity of on-chain records in various countries' courts has yet to be unified.
Transparent valuation and continuous verification: Unlike fiat currencies, the value of RWA collateral will fluctuate. Even for relatively stable on-chain US Treasury bonds, the current scale is only in the billions; if the collateral is changed to real estate or artworks, how can real-time, credible valuations be provided? Once the value of the collateral drops, the so-called support for the 'stablecoin' will also waver.
Liquidity creation: Giants like USDT have gained public credibility similar to the US dollar due to ample reserves and compliance audits. However, 'real estate tokens' and 'art tokens' issued by smaller institutions struggle to break through the speculative confines of small circles. Due to the limited number of participants, the trading depth of these tokens is insufficient, and prices can easily soar or plummet, making it difficult to form a genuine network effect.
These three challenges are intertwined, causing many RWA projects to don the guise of 'stablecoins,' while actually carrying high speculative risks. Many regulatory guidelines further point out that RWA tokenization faces regulatory uncertainty, lack of standards, technical vulnerabilities, and liquidity risks. In the face of these challenges, market enthusiasm resembles a narrative about a vast future market rather than a mature business model.
Therefore, I tend to believe that the RWA concept may be heavily promoted in certain regions (like Hong Kong) in the next year or two, but the risk of a bubble is significant. Sharp investors might capture opportunities, but for most people, it feels more like dancing on a tightrope halfway up a mountain. When faced with the enticing stories of trillions of dollars, it’s wise to remain rational: clarify whether you are investing in a realizable future or simply paying for a fleeting celebration.
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