China's RWA Regulation: Market Mobility and New Opportunities

China's RWA Move and Stock Market Reaction

Investors felt the repercussions of China's first comprehensive legal framework for the tokenization of real-world assets (RWA) on Monday. Particularly on the Chinese and Hong Kong stock exchanges, there was a noticeable increase in demand for shares linked to RWA. This situation indicates that promising opportunities will emerge in the markets.

Statements from the Beijing Administration

The Beijing administration announced last Friday that traditional assets such as securities and real estate will not be allowed to be converted into digital tokens in mainland China. However, it was emphasized that regulatory authorities would have the authority to review and approve applications for tokens supported by assets in China to be issued abroad. This situation stands out as an important regulatory shift in China, where RWA activities have remained in a 'gray area' for a long time.

Turning Point in the RWA Market

Guosen Securities evaluated these new regulations, stating that the RWA market is still in its infancy. According to them, this regulation is expected to end the irregular growth in the sector and create a competitive environment based on compliance and regulation. The report predicts that a well-regulated RWA market will become much more attractive to investors.

Future Opportunities and Technology Companies

Guosen Securities also pointed out that new business areas could emerge for investment banks with experience in blockchain technology and asset securitization. The new rules are expected to create significant opportunities for technology companies that offer compliant and efficient data management solutions based on blockchain by eliminating non-compliant projects. In this context, the adaptability of the players in the sector is anticipated to become increasingly critical.