MEXC's Jin Warns of Risks in Tokenizing Real-World Assets

Tracy Jin, the chief operating officer at the MEXC crypto exchange, has highlighted the significant risks associated with tokenizing real-world assets (RWAs). These risks include censorship, liquidity issues, legal uncertainty, cybersecurity problems, and the potential for asset confiscation through state or third-party intermediaries.

In an interview, Jin emphasized that as long as tokenized assets remain under the control of state regulators and centralized intermediaries, tokenization will not represent a financial revolution but rather a new version of the existing financial infrastructure. Jin noted that most tokenized assets are issued on permissioned or semi-centralized blockchains, which gives authorities the power to impose restrictions or confiscate assets. The tokenization of assets such as real estate or bonds is still tied to the national legal system, making it vulnerable to local legal and political environments.

Jin further explained that if the property or company behind the token is located in a country with an unstable legal environment or high political volatility, the risk of confiscation increases. This underscores the need for a more decentralized approach to asset tokenization to mitigate these risks.

Despite these challenges, the tokenization of real-world assets is projected to become a multi-trillion sector in the next decade. This growth is expected to increase the velocity of money and extend the reach of capital markets worldwide. Tokenized real-world assets include a wide range of assets such as stocks, bonds, real estate, intellectual property rights, energy, art, private credit, debt instruments, fiat currency, commodities, and collectibles.

According to RWA.XYZ, there are currently over $19.6 billion in tokenized real-world assets onchain, excluding the stablecoin sector, which surpassed a $200 billion market cap in December 2024. A research report from Tren Finance, which polled large financial institutions including Citi, Standard Chartered, and McKinsey & Company, found that the participants predicted the RWA market to reach anywhere between $4 trillion to $30 trillion by 2030. McKinsey & Company predicted the RWA sector will encompass between $2 trillion to $4 trillion by 2030, a relatively modest assessment compared to other forecasts. Meanwhile, institutions like Standard Chartered and executives at the blockchain network Polygon say that the RWA market will reach $30 trillion in the next decade.