By 2026, the global RWA tokenization market is expected to surpass $20 billion, becoming the fastest-growing sector in the cryptocurrency industry. However, the performance of many Layer 1 blockchain projects in this wave varies—key to success is who can truly solve the balance between "privacy protection" and "regulatory compliance."

It's easier said than done. RWA tokenization involves various asset types such as real estate, bonds, and carbon credits, each with its own requirements for ownership verification, cash flow management, and inter-institutional collaboration. More complex is that regulatory frameworks like the EU MiCA, US SEC, and OECD's CARF differ from one another, with no unified standard. This is the real pain point.

Some public chains choose to sacrifice privacy for compliance, while others take the opposite approach. But some projects in the industry are exploring an alternative path—by integrating privacy smart contracts that enable tiered encryption of asset data. For example, in real estate tokenization scenarios, ordinary investors see valuation and yield data, while sensitive information such as ownership proof and counterparty details are disclosed to regulators via zero-knowledge proof technology.

Coupled with an auditable module, from off-chain ownership verification to on-chain circulation, each step leaves an immutable audit trail. This approach not only protects investor privacy but also meets regulatory requirements across different jurisdictions. This "technological compliance + ecosystem collaboration" strategy may be the true way out for the RWA track.