The fast rise of tokenisation risks repeating China’s earlier boom-and-bust cycle in peer-to-peer lending until clear business requirements are established to make sure self-discipline and innovation, in keeping with a senior Chinese language asset manager.
Some multilevel advertising and marketing firms in mainland China have already began holding conferences discussing real-world asset (RWA) tokenisation initiatives over the previous yr, elevating “real considerations” that the nascent business is likely to be heading in the direction of a peer-to-peer-style disaster, mentioned CG Zhou, founder and CEO of CPIC Funding Administration (Hong Kong), throughout a panel dialogue on Thursday.
In multilevel advertising and marketing, unbiased distributors promote on to customers and earn commissions on their very own gross sales and people of their recruits. Many such companies have confronted criticism over questionable product claims, overpriced merchandise and the truth that contributors and clients are uncovered to monetary losses from charges and unsold inventory.
Zhou mentioned such firms’ curiosity in RWA tokenisation raised considerations as a result of such merchandise had been a brand new type of asset that even the monetary business was solely starting to grasp in phrases of liquidity, safety and high quality.
“If the business doesn’t assist [RWA tokenisation] develop in a wholesome method, there’s a actual danger it might as soon as extra turn into a P2P scenario,” he mentioned on the Chinese language Monetary Affiliation of Hong Kong’s annual discussion board. “P2P in itself is an effective innovation, however in our promote it grew to become one other identify for a Ponzi scheme.”
