Narrow Understanding Of RWA
In scrutinizing a multitude of publications on the tokenization of Real World Assets (RWAs) along with descriptions of existing and emerging products, one observes a predominant inclination towards a restrictive interpretation of RWAs. This constrained perspective generally encompasses only:
Real estate (i.e., immovable property)
Movable property
While this viewpoint is not intrinsically incorrect, its underlying business rationale invites skepticism.
The potential of tokenization technology can cover both tangible and intangible transferable assets. Hence, once a framework for tokenizing real estate or movable properties is established, it appears illogical to omit intangible assets such as legal entities, financial receivables (including securities, equity shares, loans, etc.), and even digital or intellectual properties from the ambit of tokenization.
Moreover, the process of tokenizing most tangible assets frequently entails the transfer of their ownership to a designated legal entity or trust, which subsequently issues tokenized shares. This procedure essentially encapsulates the tangible assets within tokenized intangible assets (i.e., legal entities), underscoring a significant overlap between the tangible and intangible asset domains.
Additionally, various RWA products adopt an inconsistent definition of RWAs, simply enumerating disparate random tangible and intangible assets as part of defining RWA. This method lacks a coherent logical underpinning, positioning these products as tokenization platforms for a seemingly arbitrary selection of popular assets, rather than providing a comprehensive, universally applicable solution founded on a rational framework that delineates specific asset types and their respective ownership structures.
Given these considerations, it becomes clear that a narrow interpretation of RWAs, confined to solely tangible, physical assets, is not just commercially questionable but also logically inconsistent.
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