The Fusion of TradFi and Web3: Exploring the Future of RWA Asset Tokenization

Recently, a dialogue themed "When Financial Institutions Harmonize with Web3" has attracted widespread attention in the industry. The CEO of HashKey Eco Labs and the innovator and CEO of China Taiping Investment Management (Hong Kong) engaged in an in-depth discussion on blockchain technology, digital assets, and the future trends of RWA.

The Motivation for Traditional Financial Institutions to Enter Web3

As blockchain technology gradually moves from proof of concept to practical application, more and more traditional financial institutions are beginning to focus on asset tokenization, transparency, and efficient circulation. China Pacific Insurance Investment Management (Hong Kong) launched a tokenized US dollar money market fund, using a certain public chain as the on-chain infrastructure, and the subscription amount reached 100 million USD on its first day of launch.

The CEO of China Pacific Insurance Investment Management (Hong Kong) stated that their entry into the RWA field is a natural process. As managers of traditional financial assets, they hope to provide asset products supported by real underlying yields for the Web3 ecosystem by tokenizing these assets, filling market gaps while changing some of the biases and misunderstandings that the traditional financial world has towards the Web3 world.

Challenges Facing Traditional Institutions in Transformation

Traditional financial institutions face many practical challenges in exploring Web3. The CEO of China Pacific Insurance Investment Management (Hong Kong) pointed out that the current Web3 infrastructure is still far from mature, especially in areas such as custody, banking interfaces, and fund administration services. They can currently meet about 70%-80% of the standards of traditional funds, which is already a relatively high level in the industry.

The Practical Path of Asset Tokenization

Regarding which assets are most suitable for early tokenization, the CEO of China Pacific Insurance Investment Management (Hong Kong) stated that they are currently focusing solely on the tokenization of financial assets and not involving physical assets. The reason is that ensuring a strong connection between the token and the underlying asset is the most fundamental and challenging aspect, while financial assets are more easily able to establish this binding relationship within the legal framework.

He emphasized that the core purpose of asset tokenization should be to lower the investment threshold, expand the investor base, and improve trading efficiency. If tokenization cannot bring significant improvements in liquidity, efficiency, or security, then it loses its meaning.

Suggestions for Traditional Financial Institutions

For traditional financial institutions considering entering the Web3 space, the CEO of China Pacific Investment Management (Hong Kong) offers the following advice:

1. Recognize that RWA is a trending and highly certain track.
2. Establish a dedicated innovation team or Web3 business unit in the organizational structure.
3. Reserve composite talents who understand both finance and on-chain mechanisms.
4. In terms of technology, choose trustworthy, secure, and compliant collaboration platforms.

Conclusion

The entry of institutions into Web3 is a gradual process that requires finding feasible paths within the existing regulatory framework, seeking a balance between innovation and stability. As more and more TradFi institutions get involved, we can expect to see more financial assets efficiently circulating through the blockchain, driving the Web3 industry from exploration to maturity.