1. Use Cases: The Demand for Dollar-denominated RWAs is Clear, While Most RWA Demands are Still Vague

USDT and USDC are digital extensions of the US dollar, serving the cryptocurrency market’s needs for transaction settlement, cross-border payments, and hedging. These use cases are frequent and essential. For example, in inflation-stricken countries (such as Argentina and Turkey), US dollar stablecoins have become powerful tools for wealth protection, with high user demand. In contrast, other RWAs, such as real estate tokenization, aim to leverage blockchain for global financing or to enhance asset liquidity. These needs are infrequent, and the user base is limited. Crypto market players are more inclined to invest in native assets like BTC, ETH, or Meme coins. Off-chain assets with high yields already have established financing channels, while assets with lower yields are the ones actively seeking to be tokenized, further limiting the market size. Summary: Dollar-denominated RWAs act as the “supply side” providing liquidity to the crypto market, while other RWAs are the “demand side” seeking liquidity. Although they share the same name, their essence is different. So, are there any non-monetary RWAs that could provide liquidity to the crypto market?

2. Compliance and Trust: Dollar-denominated RWAs Are Mature, While Most Other RWAs Are Still Lacking

Regulatory Compatibility

USDC is issued by the regulated Circle, with reserves audited regularly, complying with US monetary regulations. USDT, though once controversial, gained market trust through deep partnerships with exchanges. The regulation of other RWAs is much more complicated. For example, tokenizing real estate involves legal ownership verification and cross-border judicial issues, and there is currently no unified standard, making rapid expansion difficult.

Trust Foundation

The core of RWA is the tokenization of trust. Dollar-denominated RWAs are pegged to the US dollar and backed by the credit of the US government, making them highly trusted by users. In contrast, other RWAs rely on the credit of the off-chain asset issuers. For example, real estate tokenization requires authoritative institutions to verify ownership, or else users will not trust that the tokenized asset corresponds to the physical one.

Summary: Dollar-denominated RWAs have an unparalleled trust foundation, which other RWAs cannot easily achieve. RWAs with lower compliance barriers and easier trust-building will be worth focusing on in the short term.

3. Technical Implementation: Dollar-denominated RWAs Are Relatively Simple, While Other RWAs Are More Complex

The technical logic of dollar stablecoins is clear: issuance and redemption on-chain, with low barriers to entry. The US dollar and US Treasuries are standardized assets, with low auditing and tracking costs. In contrast, other RWAs involve complex processes such as asset valuation, dividend distribution, and settlement, and require oracles to validate off-chain data in real time. The on-chain processes for different assets (such as real estate) vary greatly, and the compliance standards and technical implementation are more challenging, leading to slower development.

Summary: Non-standard RWAs require customized standards for each type of asset, making breakthroughs difficult in the short term. However, RWAs that are easier to standardize, such as gold and bonds, are relatively easier to implement.

4. Promotion Methods: Dollar-denominated RWAs Are Bottom-Up, While Other RWAs Are Top-Down

The rise of USDT was driven by user demand: fiat-to-crypto transactions were limited by regulations, and exchanges introduced USDT trading pairs to solve the problem. As usage increased, it evolved into a digital dollar integrated into DeFi and cross-border payments. This was the result of bottom-up market demand.

In contrast, RWAs like real estate and stocks are largely driven by large institutions, motivated by financing or liquidity needs, following a top-down model. Ordinary users and entrepreneurs have low participation.

Summary: The bottom-up development model is more suitable for the characteristics of the crypto industry. RWA projects that focus more on community development are more likely to gain user adoption.

Summary and Outlook

The success of dollar-denominated RWAs like USDT and USDC is driven by clear demand, high liquidity, a solid trust foundation, low technical barriers, and bottom-up market drive. Other RWAs, on the other hand, face challenges such as ownership mapping issues, regulatory uncertainty, technical complexity, and resistance from traditional interests, making their development slow and difficult.

In the future, for other RWAs to break through, they must focus on at least the following areas:

1. Regulatory Collaboration: Promote multinational legal recognition of on-chain asset ownership.

2. Compliance Framework: Develop detailed standards by asset class to accelerate the compliance process.

3. Infrastructure: Improve RWA oracles, issuance platforms, and cross-chain liquidity protocols.

As investors, we should better understand the differences between dollar-denominated RWAs and other RWAs and clearly observe the current development of the RWA sector.

First, attention should be given to the development of the US RWA compliance framework, as well as RWAs that are easier to standardize and make transparent (such as gold and bonds). At the same time, we should focus on infrastructure-related projects in the RWA sector, such as RWA oracles, RWA issuance platforms, and RWA liquidity protocols.

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