Definition and Compliance Discussion of RWA Projects

Recently, the RWA( real-world asset ) project has become a hot topic in the Web3 field. This article will explore the definition of RWA and compliance points from a professional legal perspective.

1. Definition of RWA Concept

RWA is a financing project that tokenizes real-world assets through blockchain technology. Its core elements include:

1. Based on real assets as the underlying.
2. Asset Tokenization on Chain
3. Digital assets have ownership value.
4. Issuance and circulation are subject to regulation

RWA projects can be divided into two categories:

1. Narrow RWA: Physical assets on-chain
2. STO: Financial Assets on Chain

STOs are subject to securities regulations and must comply with the securities definition standards of various countries. The United States uses the Howey Test, which includes three conditions: investment of money, a common enterprise, and a reasonable expectation of profits derived from the efforts of others.

2. RWA Project "Compliance" Layering

RWA Compliance can be divided into four levels:

1. Sandbox Compliance: such as the Hong Kong Monetary Authority Ensemble Sandbox Project
2. Hong Kong Administrative Supervision Compliance: Incorporate into the STO regulatory framework
3. Clear regulatory framework for crypto-friendly regions
4. "Compliance": Not yet deemed non-compliant in specific offshore areas.

Currently, most projects are at the third or fourth level. The key to future development lies in whether Hong Kong can explore the RWA secondary market mechanism.

3. Compliance Recommendations for RWA Projects

1. Choose a policy-friendly jurisdiction
2. The underlying assets must be real and redeemable.
3. Obtain investor recognition
4. Ensure that the operations of institutions in the chain are in compliance.
5. Preventing Post-Compliance Risks
6. Emphasize brand reputation management

In summary, RWA projects need to be steadily advanced within the existing legal framework, with an emphasis on Compliance construction to reduce systemic risks. At the same time, promoting industry standardization through practice and facilitating institutional improvement is a positive path for industry development.