The State of RWAs: Learnings from Hong Kong Web3 Festival 2025

Background:

At DigiFT, I wrote this article to feature our attendance at high-profile industry events and share learning highlights as part of this thought leadership series, "The State of RWAs".

Format: 

Blog article | Published 17 April 2025 here

Real-world assets (RWAs) aren’t just a narrative—they’re becoming the proving ground for how blockchain can integrate with institutional finance. If 2024 was about onboarding traditional assets on-chain, then 2025 is about turning tokenization into usable, regulated infrastructure. And nowhere was this shift more evident than at the Hong Kong Web3 Festival 2025, where DigiFT joined leaders across DeFi, TradFi, payments, and policy to shape the global conversation on tokenized finance.

From stablecoin globalization to DeFi-powered marketplaces, DigiFT’s Founder and CEO, Henry Zhang, and Head of Research & Innovation, Ryan Chen, joined multiple panels to weigh in on where the RWA market is now—and where it’s going next.

Here are six key takeaways from the week.

Stablecoins Are the Gateway to Tokenized Capital Markets

Stablecoins aren’t the endgame—they’re the entry point for real-world capital to flow into on-chain markets.

At the “Breaking the Deadlock: Globalization of Stablecoins” panel, Henry framed stablecoins as more than payment tools—they are programmable financial infrastructure. When combined with wallets (on-chain accounts) and blockchains (on-chain rails), stablecoins form the foundation of a real-time, always-on capital market.

But the opportunity isn’t just in payment. As stablecoins globalize and mature, they unlock access to tokenized yield products like RWAs—creating a bridge from digital cash to on-chain investing. That’s why compliant, interoperable stablecoins are essential for sustainable growth of tokenized finance.

Regulation Is What Enables RWA Distribution—Not What Blocks It

Regulatory clarity isn’t a bottleneck—it’s what unlocks institutional participation and cross-border capital formation.

Across every panel—from stablecoins to full-stack marketplaces—regulation was center stage. Henry emphasized that in an RWA context, regulation is not a constraint but a prerequisite for scaling trust and participation.

DigiFT’s dual licensing in Singapore and Hong Kong reflects this belief. Whether you’re tokenizing credit or enabling redemptions, compliance isn’t a checkbox—it’s what unlocks institutional distribution, cross-border capital formation, and interoperability with TradFi.

Tokenization Is Just Step One—Distribution and Use Are What Matter

Tokenization adds value when it unlocks new forms of usage—not just when it puts old assets on-chain.

At the “Arbitrum and the Future of RWA” panel at ArbiLink Hong Kong and MetaEra’s CryptoFi Forum, Henry stressed that tokenization isn’t the final goal. What matters is what comes next: distribution and application. He broke it down:

1. Tokenization of traditional assets

2. Distribution to relevant users via licensed infrastructure

3. Real-world application, such as using tokenized MMFs as DeFi collateral or programmable instruments.

Ryan reinforced this at Pharo’s “Unleashing TradFi in Web3” from the technical side: Tokenizing an money market fund may not change its yield, but it enables novel use cases—like pledging it as collateral for off-exchange settlement or trading access in crypto-native platforms. But that also requires a rethink of infrastructure, legal interpretation, and education..

Institutional-Grade Isn’t Just Branding—It’s a Design Philosophy

Real institutional adoption will come to tokens that mirror institutional standards—not just on-chain code.

Henry defined institutional-grade RWAs not by brand or hype, but by their structure: fully backed assets, credible issuers, regulated issuance, and safeguards like custody and investor protections. DigiFT’s partnership with Invesco (iSNR) and UBS (uMINT) aren’t just product launches—they’re designed to meet the standards of both institutional allocators and wallet-native investors.

As he explained, institutional-grade RWAs also provide what blockchain-native assets often lack: sustainable yield, lower volatility, and security via real-world legal structures and custody. They don’t just offer exposure—they offer insulation, trust, and utility.

Interoperability and Convergence Will Define the Winners

Infrastructure and regulation are table stakes—but long-term RWA success hinges on composability, liquidity, and real-world fit.

RWAs today are fragmented. As Henry noted in the “RWA’s Trillion-Dollar Opportunity: Risks and Rewards” panel, liquidity remains siloed, technical standards vary, and most products struggle to scale beyond early adopters.

Fixing that will require shared infrastructure, cross-chain composability, and distribution that meets both retail UX expectations and institutional onboarding requirements. For RWAs to scale, wallets, stablecoins, exchanges, and asset managers must align—not compete—in creating interoperable pathways.

The RWA Market Is Moving—But Volume Will Follow Utility

Tokenization won’t change the risk-return profile of an asset—but it can transform how it’s used. That’s where volume will come.

Henry closed one of his sessions by reflecting on where the RWA market stands in Asia: strong narratives, early technical momentum, and a clear rise in issuers—but not yet meaningful scale.

That, he said, will only change when tokenized products offer clear advantages over their traditional versions. Whether it’s settlement speed, collateral efficiency, or new programmability, tokenized RWAs must answer the user question: “Why now, and why this format?”

Final Thoughts: From Hype to Architecture

The Hong Kong Web3 Festival confirmed what DigiFT has believed from the start: the tokenization of real-world assets is not about building in isolation—it’s about creating usable infrastructure.

That means combining technical execution with legal design, user experience with regulatory compliance, and asset quality with on-chain distribution. The next generation of capital markets won’t emerge from hype cycles—they’ll be built, step by step, through regulated, composable, trusted architecture.

At DigiFT, that’s the blueprint we’re executing on—one regulated RWA at a time.

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