Entrepreneurship Web3.0 Column | Dialogue with Senior Lawyer Maojiehao Mankun: link to Reality - RWA Compliance Status + Global Regulatory Trends

Preface Entrepreneurship in Web3, let's discuss every Wednesday! "Entrepreneurship Web3.0" is a Chinese Web3.0 entrepreneur interview program initiated by the Mankun Law Firm. Every Wednesday evening, we invite industry leaders, frontline institutions, and well-known entrepreneurs to join the live broadcast. Through positive expression, rational discussion, and experience sharing, we aim to support the compliance and healthy development of China's Web3.0 industry. June is the RWA thematic month. How do real-world assets (RWA) link Web3 with the real world under a compliance framework? In this issue, we invite senior lawyer Mao Jiehao from Mankun to have an in-depth dialogue with lawyer Wang Lei. From DePIN to deepening RWA, Lawyer Mao shares the compliance path in Hong Kong, global regulatory trends, the exploration difficulties of domestic assets, and how to empower RWA through standardization and programmability, helping entrepreneurs avoid pitfalls and walk the right path, welcoming the great maritime era of RWA and traditional financial integration! (The audio transcription text has been processed by AI and may contain omissions and errors.) Welcome our guest this episode, please introduce yourself to everyone! Wang Lei: Welcome to the "Entrepreneurship Web 3.0" program every Wednesday! I am Wang Lei, a lawyer at Mankun Law Firm, focusing on RWA compliance exploration, taking over from Lawyer Niu Xiaojing to host this episode. June is RWA themed month, and today is the second episode, with the theme "Current Status of RWA Compliance, Licensing Requirements, and Global Regulatory Trends." We have invited my old partner, Senior Lawyer Mao Jiehao from Mankun, who is deeply involved in Web3 compliance and has participated in multiple RWA projects, with solid experience! Looking forward to Lawyer Mao's straightforward and down-to-earth sharing! If tonight's content is valuable, feel free to share it in your friend circle, and if you have any questions in the live room, please leave a message anytime! Now, let's have Lawyer Mao introduce himself! Mao Jiehao: Thank you, Lawyer Wang! Haha, hello everyone, I am Mao Jiehao from Mankun Law Firm, focusing mainly on civil, commercial, and compliance work in the Web3 industry, involving both domestic and overseas legal matters. Over the past year, I have been most concerned about the RWA track, researching compliance pathways, developmental potential, and the connection between RWA and stablecoins. RWA is not only about asset tokenization but also serves as a bridge between Web3 and reality. Starting from DePIN, I focus on the integration of Web2 and Web3 scenarios and gradually delve into RWA. I hope the ideas and practical experiences I share today can help everyone avoid pitfalls! Friends in the live stream are welcome to ask questions and exchange ideas at any time! Wang Lei: Lawyer Mao is too modest! From DePIN to RWA, the practical experience on the compliance front is hardcore! Friends in the live stream, get your notes ready, tonight will be packed with valuable content! Q1: How did you get in touch with RWA? Why are you interested in it? Wang Lei: Lawyer Mao, you and I have collaborated on projects multiple times, and I particularly trust your expertise in compliance. How did you come into contact with RWA? As a lawyer, why are you so interested in it? Mao Jiehao: Haha, Lawyer Wang, we are indeed familiar enough not to be nervous, but I still feel a bit nervous once the broadcast starts! My interest in RWA stems from my focus on the integration of Web3 with reality. I initially did legal work in the DePIN track, where I encountered the interaction between Web2 scenarios and Web3, such as the combination of the Internet of Things and blockchain. In 2021-2022, DePIN had not yet become a clear track, but I felt that the purely Web3 internal circulation space was limited, and it had to combine with real assets to go further. The emergence of RWA just fits this logic. RWA is not only tokenized assets but also makes traditional assets programmable through smart contracts, opening up new playstyles, such as fragmented income rights and cross-border liquidity. This makes me feel that RWA is a bridge between Web3 and traditional finance, with huge potential. As a lawyer, I am studying not only compliance paths but also the business models and ecological possibilities of RWA, keeping me continuously deepening my research. Q2: What compliance pitfalls are most easily encountered in RWA projects? Wang Lei: You have accumulated a lot of experience in the RWA project practice. What are the common pitfalls that entrepreneurs easily fall into? Could you share from a compliance perspective? Mao Jiehao: The pitfalls of RWA projects are mainly concentrated in three areas:

1. Asset Selection: Not everything can be RWA! Many people immediately ask, "Can my assets be put on the chain?" However, compliance, liquidity, and programmability must be assessed first. For example, in the US, the focus is primarily on US Treasury bonds and stocks, with BlackRock's US Treasury RWA reaching $3 billion, which has a clear structure, prioritizing compliance before tokenization. Hong Kong, on the other hand, is keen on non-standard assets, such as renewable energy and real estate income rights, as they are closer to businesses and individuals. However, compliance for non-standard assets is complex and requires an assessment of policy risks and market acceptance.
2. Site selection and tokenization method: Where to issue RWA? Use tokens or NFTs? Hong Kong allows tokenization, but it is necessary to isolate domestic assets and set up an SPV (Special Purpose Vehicle) or fund structure. Issuing coins offshore has lower costs but poorer compliance and higher risks. Entrepreneurs often overlook regulatory differences in site selection, which can lead to pitfalls.
3. Investor Subscription: After tokenization, will investors subscribe? Insufficient market anticipation is a common issue. Many people focus only on issuing tokens, neglecting liquidity needs and investor trust, which leads to projects encountering difficulties. Compliance is key; entrepreneurs must first ask "Is this asset suitable for RWA?", then choose the right place and method, and finally ensure market acceptance. Wang Lei: The three major pitfalls of assets, site selection, and subscription; Lawyer Mao summarized it very effectively, "Not everything can be RWA," which has enlightened many friends. Q3: Can RWA be directly conducted domestically? What are the compliance pathways? Wang Lei: A friend in the live broadcast room asked, can RWA be done directly within the country? What are the compliant pathways? Mao Jiehao: Directly issuing RWA tokens domestically is definitely not feasible, as issuing tokens is a sensitive red line in the country. However, there are alternative paths, such as digital collectibles or digital assets on consortium chains, which bind to physical rights. For example, a voucher for a box of mooncakes or a bottle of wine can correspond 1:1 to the physical item, made into a digital collectible, similar to on-chain vouchers. This method must ensure specificity (one-to-one binding), and cannot involve non-specific rights to benefits or dividends; otherwise, there is a risk of illegal fundraising. Taking wine as an example, the voucher is essentially for physical exchange, which has higher compliance, but the promotion cannot involve investment returns and must strictly control marketing boundaries. Domestic RWA exploration should focus on rights-related assets, combined with consortium chains, to avoid the red line of tokenization. Q4: Which assets have the highest compliance difficulty for RWA? Wang Lei: You have been involved in many RWA projects, which assets or scenarios have the highest compliance difficulties? Can you provide some examples? Mao Jiehao: Assets with high compliance difficulty mainly have two characteristics: first, complex ownership, and second, strict regulation. For example: Gold Mine: Ownership of gold mines involves mining rights and land rights, with strict domestic controls. After tokenization, it is difficult to ensure compliance; on-chain confirmation of rights does not align with off-chain regulation, leading to extremely high risks. Special Assets: Such as cultural relics and state-owned assets with restricted circulation, which involve multiple regulations concerning culture and property rights, making direct RWA conversion nearly impossible. In contrast, the compliance difficulty of revenue rights assets (such as accounts receivable and real estate rents) is relatively lower. For example, RWA projects in Hong Kong often structure accounts receivable into fixed income products and then tokenize them to bypass ownership issues. Entrepreneurs must first assess the legal attributes of the assets and then design a compliant structure. Wang Lei: The difficulty of gold mines and cultural relics RWA, Lawyer Mao's example is too vivid. The revenue rights path has opened up new ideas for entrepreneurs. Q5: What is the watershed between RWA and traditional finance (such as REITs and ABS)? Wang Lei: RWA is often compared to REITs and ABS. Where is the watershed in the compliance path? Mao Jiehao: The watershed between RWA and traditional finance exists on two levels: Frontend: Standardization of Asset Tokenization: The core of RWA is asset tokenization, which requires clarification on "what assets can be tokenized," "what standards to use," and "who will regulate." For example, RWA projects in Hong Kong need to be approved by the SFC (Securities and Futures Commission), involving KYC/AML and disclosure requirements. Traditional ABS/REITs focus more on corporate credit and ratings, with weaker on-chain elements. The standardization of RWA (such as smart contract design and third-party auditing) presents new challenges and is a compliance focus. Backend: Token Programmability: RWA grants programmability to assets through smart contracts, such as automated income distribution and cross-chain transactions, which are not present in traditional finance. In terms of compliance, the realizability of tokens (liquidity, default risk) requires a completely new regulatory framework, as traditional financial fund and securities regulations cannot fully cover it. The compliance path for RWA is more complex, but its programmability offers infinite possibilities, truly linking Web3 and traditional finance. Wang Lei: Standardization + Programmability, Lawyer Mao's analysis of the watershed is very clear. Q6: What licenses or qualifications are involved in RWA projects? Wang Lei: What licenses or qualifications are typically required for RWA projects? How do the requirements differ in places like Hong Kong and Dubai? Mao Jiehao: RWA does not have a dedicated license and needs to rely on traditional financial licenses, with different requirements in different regions. Hong Kong: The SFC's Type 9 license (Asset Management) is core, and fund tokenization requires qualifications of fund managers. Hong Kong's RWA sandbox (Ensemble) allows case-by-case discussions, but it is not a license and requires support from traditional securities regulations (such as Type 1 and Type 4 licenses). Dubai: There is no exclusive RWA license, and the first phase of the sandbox (ending in April 2025) allows testing, but it requires approval from VARA (Virtual Assets Regulatory Authority) and involves custody and trading licenses. Other regions: The US SEC requires RWAs to comply with Reg D/S exemptions or to be registered as securities; the EU's MiCA (effective December 2024) categorizes RWAs into ARTs (Asset-Referenced Tokens) and EMTs (Electronic Money Tokens), requiring specific licenses. The compliance path in Hong Kong is relatively clear, but the process is complex. Currently, the SPV + fund structure can be referenced. Entrepreneurs need to first clarify the type of assets and then match the licenses. Q7: What are the compliance obstacles for domestic assets to issue RWA in Hong Kong? Wang Lei: A friend in the live stream asked, what are the compliance obstacles for issuing RWA of domestic assets in Hong Kong? What are the advantages of offshore issuance? Mao Jiehao: The main obstacles for domestic assets to issue RWA in Hong Kong are: Dual Regulation: Funds must be received by domestic SPVs, and then private equity funds and token approvals must be established in Hong Kong, involving SFC's KYC/AML and disclosure requirements. High costs and complex processes make it difficult for non-large institutions like Ant Group to obtain exemptions. Asset Isolation: Domestic assets cannot directly issue tokens and must be isolated (e.g., through SPVs) to ensure compliance with the issuance red line. Policy Risk: Domestic regulation is strict, and assets like receivables are relatively easy to pass through, while real estate and other immovable properties are limited due to ownership issues. Offshore issuance has low costs, but poor compliance, lack of regulatory recognition, and high risks. The compliance path in Hong Kong is safer and suitable for strong teams. I recommend entrepreneurs choose Hong Kong, utilizing professional law firms like Mankun to design an SPV+fund structure to avoid pitfalls. Q8: Can non-standard assets like artworks and training courses be used for RWA? Wang Lei: A friend in the live broadcast room asked if artworks and training courses can be considered RWA? What is the difference from NFTs? Is there a risk of illegal fundraising? Mao Jiehao: Non-standard assets such as artworks and training courses can explore RWA, but the difficulty and compliance requirements vary. Artworks: Direct tokenization is difficult due to the complexity of ownership, requiring assessment of default risks and investor protections. It can be structured through rights of income (such as leasing agreements) and then tokenized. Unlike NFTs, RWA focuses more on on-chain liquidity and compliance, while NFTs lean towards collectible value. Training courses: Similar to digital collectibles, they need to be 1:1 bound to specific rights, such as a one-hour course video, akin to a voucher. Promotion cannot involve investment returns, otherwise there is a risk of illegal fundraising. Future courses can be seen as contracts, binding digital assets, but splitting income rights must be done cautiously to avoid crossing the red line. The key to compliance is specification (1:1 binding) and marketing boundaries, which require a clear structural design. Q9: What are the global regulatory trends for RWA? Which regions are more open? Mao Jiehao: The global regulatory trends for RWA are diverging, with different attitudes in various regions: Hong Kong: Open and clear, the Stablecoins Ordinance (effective 2025) and the Ensemble sandbox support RWA, with the SFC discussing matters on a case-by-case basis, favoring green energy and technology-related assets. USA: Strict SEC regulations, requiring registration of securities or Reg D/S exemptions, BlackRock's US Treasuries RWA ($3 billion) sets a benchmark with a mature compliance path. EU: MiCA (effective December 2024) classifies RWA as ARTs/EMTs, with clear regulations suitable for structured assets. Singapore: The FSW Act will be effective from June 30, with tightened regulations, and working from home may even be illegal; project parties need to be cautious. Dubai: The sandbox is flexible, but VARA has high requirements, suitable for large institutions, while small to medium teams face high thresholds. Open regions: Hong Kong, EU, USA (large institutions); gray areas: Dubai, Singapore (tightening regulations). It is recommended that entrepreneurs refer to successful cases (such as BlackRock, Ant Group), communicate with local regulators, and design compliant pathways. Q10: What are the suggestions and life insights for RWA entrepreneurs? Wang Lei: Friends in the live broadcast room are very concerned about how to persist until the RWA explosion. How do you recharge your faith? What advice do you have for entrepreneurs? Summarize your sharing in one sentence! Mao Jiehao: RWA is still in its early stages, with June 2025 as the starting point, and it may see a boom from 2027 to 2030. Stablecoins are key, and after the Hong Kong bill is implemented in the second half of the year, the volume of fiat to stablecoin conversion will determine the progress of RWA. My belief comes from accompanying the industry; from DePIN to RWA, I have seen the compliance frameworks of Hong Kong, Singapore, and the EU gradually becoming clear over the past three years. Maintaining curiosity and patience allows me to continue to delve deep. Advice for entrepreneurs: Focus on familiar areas: leverage personal resources (China, Hong Kong, the United States) to concentrate on compliant and mature sectors such as green energy and DeFi. Learn from successful cases: such as BlackRock's U.S. bonds and Ant Group's RWA fund, design SPV+fund structures. Embrace exploration: RWA is an interdisciplinary field that requires understanding of law, technology, and finance, and finding partners like Mankiw to experiment together. In summary: Break free from the limitations of asset tokenization and view RWA from a higher dimension; it is the bridge between Web3 and reality. With patience and deep cultivation, you will surely discover your blue ocean! Wang Lei: Thank you, Lawyer Mao, for over an hour of valuable insights! From the three major pitfalls to the compliance path in Hong Kong, from global trends to the exploration of non-standard assets, Lawyer Mao has guided RWA entrepreneurs with practical experience. Next Wednesday, we will continue our RWA topic and discuss the implementation path on the technical side. Everyone is welcome to follow! Thank you, Lawyer Mao, and that's all for tonight. Good night! Mao Jiehao: Thank you, Lawyer Wang, and thank you to the friends in the live broadcast room for supporting Mankun. The future of RWA is promising. Good night!

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/END. Author of this article: Mankun Brand Department