Liu Jun: Fundamental Constraints and Value Considerations of Digital Financial Innovation
In the context of the in - depth advancement of a new round of scientific and technological revolution and industrial transformation, the digital technology is accelerating its integration with the financial system. Encryption technology, distributed technology, and new forms of assets are emerging continuously, profoundly influencing the way of financial development. However, no matter how the technology and business forms evolve, the essence of finance remains unchanged, that is, to serve the real economy as the fundamental purpose and prevent financial activities from deviating from the real economy and falling into self - circulation and self - expansion.
This article is based on the essence of finance and the essential attributes of currency, and explores the practical connotation of "decentralization" and the concept and economic significance of the tokenization of real - world assets (RWA), in order to further clarify the functional boundaries and practical orientation of Web3.0 financial innovation.
The fundamental constraint of financial innovation: real credit and the real economy
First of all, starting from the essential attributes and real operation mode of currency, we can clearly grasp the fundamental constraints faced by current relevant financial innovations.
Here, the concept of currency can be divided into two levels: one is fiat money led by the government and the central bank; the other is the "money in circulation" widely used in economic operation. The former belongs to the institutional currency arrangement and has no direct relationship with other market entities. The concept of "fiat" is generalized rather than specific in reality; the latter is the financial medium that residents and enterprises actually come into contact with in the process of payment, settlement, and value storage.
In micro - behaviors, the market rarely uses the concept of "currency" directly. More discussions focus on funds, assets, capital, and loans. Financial institutions are the departments that operate currency and are fully involved in aspects such as the operation mechanism of macro - monetary policy, the circulation of the meso - monetary market, and micro - monetary supply. This shows that the so - called "money" in daily life is not an abstract currency symbol, but a specific trading carrier and financial instrument embedded in specific credit relationships, trading circulations, and institutional arrangements.
The Bank for International Settlements proposed in its 2025 annual economic report that currency should have singleness, elasticity, and integrity. Before these three properties were regulated, relevant scholars also explained the properties of currency from similar perspectives, such as no questions asked (Holmstrom, 2015), singleness, and resistance to bank runs.
In reality, these properties do not exist naturally but need to be supported and solidified by institutional design. Otherwise, it is difficult to achieve them effectively in complex economic activities. For example, one dollar in a high - rated bank account and one dollar in a lower - rated bank account, although they have the same face value, the credit rating, credit quality, and risk - resistance ability they carry are not exactly the same, and the value of the corresponding one - dollar is actually different.
It is precisely because of institutional arrangements such as deposit insurance that one dollar in different bank accounts can achieve equivalence and equal effectiveness in terms of payment, circulation, and redemption. However, considering extreme scenarios such as bank failures, only the money within the coverage of the deposit insurance system is equivalent, while the money outside the coverage shows a binomial result of full redemption or full loss, unless the deposit insurance fully covers the bank's liabilities. This shows that the essence of currency does not lie in its unit of account or technical form, but in the credit structure behind it.
Furthermore, the essence of currency lies in credit, and credit is not generated out of thin air. It must be supported by a verifiable and sustainable real foundation, such as comprehensive national strength, economic volume, economic and trade scale, payment ability, financial market stability, or other visible strengths. Therefore, no matter how the technical form evolves, currency cannot be separated from the fundamentals of credit and the real economy.
Extending to the field of virtual currency, the key for virtual "currency" to become real currency does not lie in the algorithm design itself, but in how credit is supported, how it is cashed out, how responsibilities are implemented, and how rights, responsibilities, interests, and effects are consistent. If the algorithm or the linked assets lack transparent supervision, or the trust is only built on an impenetrable technical "black box", the credit system of virtual currency is difficult to establish, and its value foundation must be fragile. This is also the reason why multiple departments such as the People's Bank of China have further prevented and dealt with the risks of virtual currency trading and speculation recently.
Avoiding "decentralization" arbitrage: full - scale restoration of public costs
Secondly, on the basis of the above, further clarifying "decentralization" can avoid ambiguity in understanding.
From historical experience, there has never been a truly "centerless" state in the development of human society. The so - called "decentralization" mainly refers to the removal of some central structures formed in the physical world or the industrial era, rather than the elimination of all centers. Whether it is the atomic nucleus and black holes in nature or the various operating mechanisms of the economic and social system, centers always exist in different forms.
In the field of finance, the "decentralization" currently under discussion actually attempts to weaken or replace the specific institutional intermediaries formed in the industrial economy era, such as the sovereign currency issuance mechanism centered on the central bank and the financing structure centered on traditional financial institutions. From this perspective, using "disintermediation" to replace "decentralization" may be more accurate, because its core goal is not to deny the center itself, but to reset the center through technological means and achieve functional concentration and efficiency improvement at a higher level or on a new carrier. Decentralized finance (DeFi) does not really move towards a centerless state, but is "re - centralized" on algorithms, platforms, or technical architectures.
Further observation shows that the re - centralization of Bitcoin reflects a platform - centered pattern similar to oligopoly represented by Foundry USA and AntPool. In 2025, the combined global computing power of these two mining pools accounted for more than 50%. Stablecoins present a dual - center pattern mainly composed of Tether (USDT) and Circle (USDC). As of the end of January 2026, they accounted for more than 80% of the global stablecoin market share. From the perspective of anchor currencies, as of the end of January 2026, the market value of US - dollar - denominated stablecoins accounted for about 96% of the global market share, which is a dual "re - centralization" of technological hegemony and the global seigniorage of the US dollar. If the virtual asset infrastructure on a global scale is not an open ecosystem with wide participation, the risks of 51% attacks and concentration risks initiated by leading enterprises cannot be effectively prevented.
The reason why "disintermediation" is reasonable lies in its potential cost - reduction effect and real - time efficiency. As long as the operating costs of technologies such as blockchain and smart contracts in credit review, performance constraints, and information verification are lower than those of traditional institutional arrangements, their supplementation and replacement have a certain practical basis, which is the embodiment of Coase's transaction cost theory in financial innovation.
However, the financial system is not a simple private trading platform. It naturally has the attribute of public goods. Absorbing deposits is not only a commercial behavior but also involves public functions such as deposit insurance, basic financial service supply, and financial stability, and cannot be measured only by the business logic of maximizing individual interests. If, in the context of "disintermediation", only technical efficiency is concerned while ignoring the security and public responsibilities of the financial system, the explicit costs may be compressed in the short term, but in the long run, the stability of the system may be weakened, and even systemic risks may be magnified.
Therefore, it is necessary to conduct full - scale restoration of the costs of DeFi, including deposit insurance, infrastructure use, and public function undertakings. If the full - scale costs consistent with those of mainstream financial institutions are ignored, the immediate benefits of DeFi are actually another form of arbitrage. Once a systemic risk occurs, the losses and rescue will definitely be "unbearable".
"Decentralization" should not be understood as a negation of the existing financial system, but rather as an orderly correction of unreasonable institutional frictions and cost structures on the premise of serving the real economy and meeting the needs of financial consumers. Its sustainability depends on further balancing the improvement of market efficiency and the realization of public functions.
Realization of the economic value of RWA: the integration of the real and virtual frameworks
Finally, regarding the tokenization of real - world assets (RWA), it is necessary to further clarify it within the framework of the integration of the real and the virtual.
One of the major misunderstandings in the current discussion is to simply bring virtual currency and related asset forms back to the traditional real - world analysis framework, ignoring their unique operating methods in the virtual space.
Virtual currency and RWA are not limited to a direct mapping of the real world but exist in two different and parallel dimensional systems, the physical world and the digital space. RWA tokenization is essentially a form of securitization of assets in the virtual dimension, in which technologies such as blockchain and smart contracts are superimposed to achieve more efficient verification, more precise segmentation, more efficient trading, and lower - friction circulation. Many financial trading methods that are difficult to establish in the physical world, especially structured arrangements such as segmentation and combination, have inherent rationality and feasibility in the virtual space.
For example, tokenizing non - fungible rights and interests in art works, cultural performances, or sports events, such as a certain part or a certain moment, its value does not lie in replicating the real assets themselves, but in realizing the digital confirmation of rights and trading circulation of specific experiences, emotions, and senses of participation under the premise of compliance with laws and regulations. Individuals can "own" a unique fragment or experience at the virtual level and form a value - realization mechanism under the conditions of legal regulation and sufficient trading. As long as these non - fungible assets can continue to circulate in the virtual space, the logic of their value - added has an endogenous foundation.
However, this does not mean that RWA can exist independently of the real economy. Its value realization must be based on legal and compliant institutional arrangements. Whether it is emotional value or participation value, its sustainability ultimately needs to be traced back to the real content supply, production capacity, and service system. If tokenization only stays in the repeated trading of virtual rights and interests and cannot have a positive feedback on the efficiency of real - world resource allocation or industrial operation, it is easy to evolve into a self - circulation of "creating the virtual from the virtual".
Therefore, only when RWA is a tool - based innovation strictly included in the financial regulatory framework and can effectively improve resource allocation and release real use values (physical use values and virtual use values) in the interaction between the real and the virtual can its technological potential be truly transformed into economic value with practical significance.
In summary, whether it is the understanding of the attributes of currency, the analysis of the connotation of "decentralization", or the evaluation of the RWA tokenization path, it must be based on the real economy, supported by a verifiable and sustainable credit mechanism, and maintain a balance between efficiency improvement and public attributes.
The specific forms of financial innovation can evolve continuously, but its basic function and value orientation of serving the real economy should not deviate. Web3.0 finance needs to restore regulatory costs and strengthen risk prevention to ensure that the costs and benefits of virtual finance are comparable on the premise of equal costs of physical finance, so as to play a real promoting role in the real economy rather than engaging in zero - sum competition. Only in this way can Web3.0 financial innovation clarify concepts, define boundaries, and correctly engage in real finance.
This article is from the WeChat official account "Caijing - MayFlower" (ID: Caijing - MayFlower). Author: Liu Jun. It is published by 36Kr with authorization.