After Mainland China's Document No. 42 Sets the Tone, What is the Best RWA Token Standard?

On February 6, 2026, the People's Bank of China, in conjunction with eight major departments, once again issued [Yin Fa (2026) No. 42] document. There have been many market interpretations already. This article aims to provide a more vertical analysis by combining RWA with the current on-chain market situation.

Looking at on-chain data, from early 2025 to early 2026, on-chain RWA-type assets surged 5 times, reaching a scale of $23.7 billion, which is already a market that cannot be ignored.

1. How to Understand Document No. 42

In the author's view, reading the original text together with the attached document "Regulatory Guidelines on the Overseas Issuance of Asset-Backed Security Tokens for Domestic Assets" is quite revealing. The core point is that Document No. 42 devotes significant space to specifically define and regulate "Real World Asset Tokenization" (RWA). This amounts to the regulatory authorities formally recognizing RWA as a business model and providing a path for compliant application and filing.

There are three key pieces of information, which I will present in the original text and then interpret.

First, the accurate定性 (qualification/nature) of RWA:

"Real World Asset Tokenization refers to the use of encryption technology and distributed ledger or similar technology to convert ownership, profit rights, etc., of assets into tokens or other equity/debt instruments with token characteristics, and to carry out issuance and trading activities."

With the definition established, how is it applied? The text continues:

"Exceptions are made for related business activities carried out relying on specific financial infrastructure, upon lawful and regulatory approval by the competent business authorities."

So, who can participate? There are also explicit process regulations for applying and utilizing RWA assets:

The domestic entity that actually controls the underlying assets needs to file a record with the China Securities Regulatory Commission (CSRC), submitting materials such as a filing report and the full set of overseas issuance documents, completely explaining the domestic filing entity information, underlying asset information, token issuance plan, and other relevant situations.

Therefore, in the author's view, combining these points, it can be said that RWA assets have been clearly separated from the virtual currencies that were strictly cracked down upon, and the two are not subject to the same management approach.

The significance also lies in completely addressing the former regulatory gray area. After all, the biggest obstacle for Chinese domestic assets to go overseas through RWA tokenization was not a technical problem, nor a market problem.

Moreover, RWA tokenization almost adopts the existing securities regulatory framework. This also benefits financial institutions, as they can legitimately and legally engage in compliant RWA business. Objectively speaking, RWA issued by standard financial institutions is a good way to prevent risks.

Under such constraints in mainland China, arbitrary asset issuance can be avoided. Treating RWA like a Meme would反而破坏 (instead破坏/damage) the market.

2. The Evolution of Global RWA Standards

Along with the mainland's institutional定性 (qualification/positioning), how is the global RWA market developing? When regulatory issues are alleviated, subsequent application becomes a reality that must be faced.

In fact, the current market has long been in an era of a Token standard war.

This complexity brings industry-level compatibility dilemmas for RWA. Let's delve into the current mainstream RWA token application standards.

This article will start from HK ABT (asset-backed token) in 2022, to ERC-3525 and ERC-3475围绕债券 (surrounding bonds), to AAVE's Atoken, stETH, and AMPL from the DeFi era, and how the latest leading on-chain stock platforms Ondo and xStock handle the特性迁移 (characteristic migration) for stock tokenization.

2.1 HK and ABT

The Hong Kong government's "Policy Statement on the Development of Virtual Assets in Hong Kong" released on October 31, 2022, highlighted asset-backed tokens (ABT).

Conventionally, tokens are divided into 4 major types, distinguished by the token's purpose and source of value.

In fact, the thinking behind the mainland document and the past practices in HK are continuous. They必然有 (must have) off-chain physical assets or rights as the value标的 (target/reference).

Thus, through compliant tokenization, the on-chain characteristics enhance the assets:

1. Fragmentation: Refers to dividing property rights into smaller pieces for sale purposes, making them easier to trade, price, and circulate.
2. Liquidity: Liquidity is defined by the speed at which an asset can be converted into cash; order books are broadcast and shared on-chain.
3. Cost-effectiveness: When trading based on blockchain smart contracts, the costs of these external third parties will be eliminated or significantly reduced.
4. Automation: Blockchain-based smart contracts do not require these manual interactions, providing a trusted technological foundation.
5. Transparency: One of the most significant features of on-chain transactions is the immutable record-keeping.

From the perspective of the audience:

• For institutions, the splitting and conversion of large orders bring benefits of fragmented liquidity, efficiency, and cost reduction.
• For users, it provides a transparent and automated trusted environment to ensure their rights and interests.

The most直观有应用价值的 (intuitively valuable and applicable) currently are stocks and bonds, as both can perfectly adapt to the aforementioned advantages of liquidity, automation, and fragmentation.

3. Bond Scenario Standards: ERC-3525 and ERC-3475

There were many explosions of this asset type around the time of HK ABT. The industry standards that emerged are ERC-3525 and ERC-3475:

• ERC-3525 focuses on the management of semi-fungible tokens, improving the combination and splitting of assets at the numerical level, focusing on the on-chain migration of traditional financial assets.
• ERC-3475 focuses on the definition of semi-fungible tokens, providing better规范 (specifications/standards) for contracts with low standardization, focusing on the on-chain migration of traditional commercial contracts.

Objectively speaking, these two standards are not widely used. This is because they were standards first, business second, rather than summarizing standards based on existing business. Hence, their actual influence has been decreasing (far less than Atoken and stEth discussed later).

In the author's view, it's because the初衷 (original intention) of such design standards aimed to be all-encompassing. For example, ERC-3475 (as shown below) is practically a representative of包容万物 (encompassing everything). This directly led to a high threshold for user understanding and high barriers for app adaptation.

Ultimately, aiming too high meant achieving little; it's no wonder there aren't many applications in the market.

For a detailed interpretation, see:盘点五大 Token 标准,足以支持香港 Web3 发展试点吗? (Reviewing the Five Major Token Standards: Are They Enough to Support Hong Kong's Web3 Development Pilot?)

4. Bond Scenario Applications: AToken & stEth

Compared to the "standard first, application later" type, let's look at the典范 (paradigm) of "application first, standard later".

4.1 Real-time Compound Interest Model: Aave's Atoken

Aave is the top DeFi infrastructure in the web3 industry, dealing in the business of on-chain asset staking and lending for interest. Atoken is the staking certificate, with core functions as follows:

1. Proof of Deposit: Holding aToken is equivalent to the user owning a corresponding amount of assets in the Aave protocol, and these assets automatically earn interest over time.
2. Lending Mechanism: aToken can be used to evaluate a user's deposit amount and determine the loan amount the user can obtain.
3. Automatic Interest Distribution: The quantity of aToken automatically increases according to the current deposit interest rate.
4. Transferability and Liquidity: Users can transfer or抵押 (collateralize) aToken to other protocols to obtain more收益 (yield/returns) or use it in other DeFi products.

Looking at it this way, one could say that each point is also the path RWA must take in the future.

Looking at its current market status, it has also been thriving. The total assets of Atoken have reached around $30 billion.

Why is Atoken so successful?

Clearly, with almost 100% growth year after year, it can be called a successful典范 (paradigm).

Ultimately, it's because atoken is already very well adapted to the existing market. After all, originating from Aave, they understand very well that adaptability is a key path for development in the blockchain market. The two standards mentioned above ultimately got stuck on adaptability, as existing asset dashboards and wallets found it difficult to integrate this type of asset.

Adaptability is not a simple word because it has a key problem to solve: if on-chain assets cannot generate interest, their practical significance is greatly reduced.

But if they are to generate interest, how should this interest be given to users?

After all, everyone's staking time is different, and the staking interest rates vary across different periods. Different assets have different market demands, corresponding to different lending spreads.

If interest is simply distributed to users periodically, the project's cost and management complexity would increase significantly, ultimately passing the cost onto the users.

Some say this is an on-chain performance issue, so they built new high-performance public chains to rival web2 server performance, but they then face the cost of user migration.

Aave's answer is to hide the interest in the user's daily transactions.

AToken essentially uses a Scaled Balance mechanism to calculate the user's actual balance:

Liquidity Index = Initial Index × (1 + Interest Rate × Time)

This logic ensures that interest is automatically calculated and accumulated during transfers (whether sending or receiving), triggering new minting events to increase supply during transfers.

For the project side, this eliminates an interest distribution transaction. Users see their interest accumulate不知不觉中 (unconsciously). Even if not seen, it will be calculated in the next operation, so there is no loss.

This clever design, requiring just a few lines of code, is very native-thinking.

Moreover, this line of thinking initiated the subsequent inheritance and evolution of on-chain asset standards like stEth, ondo, and xStock.

4.2 Rebase Model: Lido's stETH

stETH, based on the previous interest concept, simplified the staking and withdrawal logic further into shares, rather than calculating based on interest + time accumulation.

stETH = Amount of ETH staked by user * (Total protocol assets / Total internal shares)

You might find it strange: How can it have no interest? It's all staking for interest. Someone else staked for 1 year, I staked for 1 day. Shouldn't the share change?

This is because of Lido's daily automatic rebase mechanism. For example:

1. Suppose I bought 1 ETH a year ago and joined a total staking pool of 100 ETH. My share was 1%.
2. Lido obtains staking rewards daily from the Ethereum beacon chain and then performs a rebase on the protocol.
3. Thus, when I withdraw after one year, I naturally get (my share of the now larger pool, roughly 4% gain).
4. If I buy this 1% share on the last day, I am buying based on a share that has accumulated costs over 364 days, nearly approximating 104% of the original cost, and can only enjoy one rebase.

Why design it this way?

Because making stETH's收益 (yield/returns) automatically arrive daily, without waiting or manual claiming, is its greatest convenience.

The previous Atoken required a transaction to realize the interest, while stETH can update the balance automatically daily, making it easy for various wallets to兼容 (compatible).

This ultimately allows users to see the interest increase on their balance sheet, aligning with our conventional concept of saving money: interest arrives automatically daily, providing peace of mind.

Comparing the two归根究底 (in the final analysis), it still depends on the scenario.

Aave is for lending, with interest rates fluctuating greatly in real-time; there might be high-interest periods where one day equals a month. Lido, with its fixed income, is smooth and steady, less concerned about one day's interest, thus allowing for further optimization of the user experience.

Are these two suitable as Token standard methods for the RWA era?

The author believes they are not directly suitable, but they can be used for reference. Let's look at the final主角 (protagonist) of today: the on-chain stock model.

5. On-Chain Stock RWA Scenario

Although not large in the overall RWA total value market ($900M vs $27B), due to the characteristics of stocks, it is one of the most promising for trading liquidity and on-chain application imagination.

The main players here are: Ondo, xStock.

We can see that in the past six months, the top DEXs and wallets in the market have been investing here. Objectively speaking, these leading platforms seem to have惊人的一致 (a surprising consensus) in their judgment of future trends.

1. 2025.7.1: Jupiter supports xStock trading and begins large-scale promotion.
2. 2025.9.25: Solana official released a new RWA Twitter official account.
3. 2026.1.22: Jupiter partners with Ondo Finance to list over 200 types of tokenized stocks.
4. 2026.1.24: Binance Wallet supports Ondo asset trading in professional mode.
5. 2026.2.3: MetaMask lists tokenized US stocks and ETFs, stating the market is shifting on-chain.

They are actually based on a share-based Rebase model, specifically a "On-Chain Shares + Multiplier Scaling" Rebase mechanism.

On the Solana chain, this mechanism is an extension in its mainstream token2022 standard. Each token can have a parameter called Multiplier set by the project. The balance the user holds is called the raw amount, meaning the number of shares.

Then, in scenarios like stock splits, reverse splits, dividend distributions, etc., the project dynamically adjusts the Multiplier parameter in the token, modifying the display amount multiplier.

This creates a divide: if users use a wallet that doesn't support this parameter, they might feel something is wrong with their assets. If supported, they will see the UI amount, i.e., the amount displayed on the client.

6. Summary and Reflection

The previous text has rambled on for nearly four thousand words, reviewing the mainstream on-chain asset tokenization and real-world asset tokenization leading players and evolution paths.

Various partial thoughts have been mentioned in each module, so now it's time to return to the "cold thinking" in the title.

Because looking over a longer time frame, RWA has been around for almost 10 years.

1. Early Exploration, 2016-2019: The experimental stage of asset on-chain was mainly stablecoins.
2. Initial Institutional Phase, 2020-2022: RWA entered the DeFi lending领域 (field), i.e., the Tokenised Stocks that BN/FTX once tried (and关闭 [closed] not long after).
3. Compliance Stage, 2023-Present: Compliance began to clarify; some RWA assets expanded rapidly (stablecoins, US Treasury bonds), etc., and new asset types and platforms gained traction.

Therefore, in the author's view, the mainland's定性 (qualification/positioning) of RWA is objectively a positive, but not entirely positive. It might even be said to be a belated notice. Moreover, HK previously introduced a similar system, ABT, but did it develop?

Clearly, compared to the state in the other hemisphere, it hasn't made much progress. This is closely related to HK's very cautious management of licenses. Whether it's about acting boldly from the start or试探和约束 (testing and constraining) bit by bit – the latter can scare away many platform operators hoping to build.

The new system has openness, but what is opened up is not necessarily what users真正要用 (truly need to use) or what the market demands.

We can see that Aave's Atoken is very successful because it addresses the use of idle on-chain assets, allowing users to lend them out.

stETH is also great because it solves the pathway for POS (Proof of Stake) staking. Although there is a risk of Lido concentrating too much value (power), it provides stable returns for staking. Similarly, one can read the author's article on Jito, which is another staking model.

And they all care about user experience, meticulously handling the nuances of compatibility and project costs.

Therefore, issuance itself is not the goal; applying the liquidity, fragmentation, transparency, and automation of the chain to the token is the value.

It's not about defining a perfect standard first, but respecting rules and consensus, leveraging strengths step by step.

Like common stocks: various exchanges are not 7*24 hours, but on-chain ones are.

Gold in various markets has its own opening hours, but on-chain it doesn't.

This time Gap is the real value of being on-chain, as it can solve the problem of value discovery in markets without trading. Compared to pre-market trading, it's more敏锐 (sensitive/acute). Compared to cross-exchange price differences, it has lower磨损 (friction/costs). Moreover, liquidity spanning the globe enables value discovery from a completely different交叉视角 (cross-perspective). In the future, company pricing might not rely on the NYSE链上依托 (relying on-chain), but rather the NYSE might list after checking the on-chain price first.

Disclaimer

This article is information-dense, as many architectural overviews are highly condensed, and the technology is not fully open source, based on analysis of published information.

Additionally, purely discussing from a technical solution perspective, without any positive/negative evaluation of various products.