If we compare narrative, RWA will not lose to any other encryption field.
In a narrow sense, RWA is to realize real-world assets through on-chain tokenization. But in a broad sense, the blockchain of currencies/goods/services is just an appearance. If all major assets in the real world can be linked to the blockchain in the future, then encryption technology will have an increasing impact on monetary policy, and the competition and changes that will follow. is the key to researching and engaging in RWA.
For example, if the currency is on the chain, can a freely convertible exchange rate be achieved? Are the various tokens interchangeable so that any one token can purchase any asset? These conjectures may not be far-fetched.
Looking at the time scale of a hundred years, the value of each mainstream currency will plummet. It is only a matter of time, not whether it will jump or not. Adam Smith famously said in "The Wealth of Nations": "The monarchs of all countries in the world are greedy and unfair, and they constantly reduce the true weight of the metal originally contained in the currency." So, is there a solution to this problem?
Hayek, the 1974 Nobel Prize winner in economics, proposed a plan called "denationalization of currency." Hayek's demand was simple: all types of exchange controls between countries should be abolished, and individuals would be free to choose any currency for signing contracts or keeping accounts. He encouraged private individuals to freely issue currency and hoped to solve problems through free competition.
Why did Hayek make this seemingly strange claim? He believes that in an environment of free competition, if someone issues currency at will, this currency is likely to be eliminated by the market. On the contrary, issuers must consider adopting smart issuance strategies if they want the currencies they issue to remain competitive in the market.
However, due to various reasons (mainly restrictions on the issuance of currency), it has been difficult to implement this concept in the past. Until the emergence of blockchain, practical technical means were provided to solve this problem. In the field of cryptocurrency, after experiencing the baptism of the bear market, people are more inclined to hold mainstream currencies whose inflation models are better controlled.
Before the invention of blockchain technology, dollars were dollars. Whether the U.S. dollars are printed as banknotes or in a bank account, the value of these U.S. dollars is the same to the holder, without any difference. Although in the crypto circle, USDT (issued by Tether) and USDC (issued by Circle) are currently the more widely recognized US dollar stablecoins (still pegged to the US dollar), their issuers have experienced fierce competition to stand out, even in Considered more reliable than traditional big banks in some ways.
Therefore, once deposit tokens are allowed to flow in the market, it may bring about earth-shaking changes to the banking ecosystem. Current stablecoins do not allow interest (DAI will pay dividends from time to time through airdrops), but deposits do have interest. At that time, the interest levels of different bank tokens may represent the level of profitability, and banks with problems (such as Silicon Valley Bank) may experience de-anchoring of deposit tokens (similar to Terra).
At present, the currency issuance rights of most countries in the world are still firmly in the hands of national governments. However, every time there is a financial or fiscal crisis in the United States, it can be overcome by printing money and releasing money. The ongoing cycle of U.S. dollar interest rate hikes has actually caused the currencies of many countries (Argentina/Turkey, etc.) to collapse.
With the development of encryption technology, some countries may begin to explore the concept of free currency. Among countries where central banks have failed to manage their currency, Argentina is undoubtedly the most outstanding. Argentina's inflation rate (CPI) has never been below 20% in the past ten years, and has even exceeded 100% for several years. The country's stubborn economic crisis and high inflation may make it a pioneer of the free money movement.
Not long ago, the results of the second round of the Argentine presidential election came out. Javier Milei, the far-right candidate who had threatened to blow up the Central Bank of Argentina and was extremely friendly to Bitcoin, defeated the current Minister of Economy Sergio Massa and won the election. , after being elected, Javier Milei once again showed his determination to close the Central Bank of Argentina (BCRA) on the X platform, saying that this was a "non-negotiable" matter.
Not only that, Javier Milei has also stated that after closing the central bank, Bitcoin will become the main force as a remedy for inflation in Argentina. Perhaps influenced by his thoughts, the local Argentine exchange Ripio increased its new users by 180% in October. . At the same time, the trading activity of the US dollar-pegged UXD stablecoin launched by Ripio has also increased significantly. UXD even broke away from its anchor price on November 17, once reaching as high as $5.03.
According to Hayek’s theory, currency denationalization is the only option to end inflation. What will be Argentina's fiscal direction in the future? The performance of this crazy president after taking office is highly anticipated.
Summarize
However, there is a long way to go before RWA can truly be realized. This is a complex issue involving politics, economics, technology and many other aspects. The development of RWA is still in its early stages, and its future development direction and results remain uncertain. It is important for anyone to understand and evaluate these changes in order to make appropriate decisions and predictions.