Bifu Research | 2026

Abstract

The traditional supply chain finance market is massive, but for a long time, micro, small, and medium-sized enterprises (MSMEs) have consistently faced structural financing dilemmas, with the global trade finance gap remaining stubbornly high. Meanwhile, as the crypto market matures, investors' demand for wealth management characterized by low volatility and deterministic cash flows is growing rapidly, alongside their pursuit of high leverage and elastic returns. In this context, transforming real-world trade cash flows into RWAs (Real World Assets) has not only become an effective bridge connecting Traditional Finance (TradFi) with the crypto capital market but has also provided exceptionally high-quality underlying asset support for the Web3 wealth management sector.

This research report aims to deeply deconstruct the operational logic and industry evolution of supply chain finance RWA, with the following core viewpoints:

• Core Pain Points: There is a natural "execution barrier" between physical world commercial credit and on-chain smart contracts. When dealing with complex cross-border commercial defaults and legal disputes, a single decentralized technical framework is often insufficient to independently achieve effective recovery and forced liquidation of underlying physical assets.
• Risk Management is King: The life-and-death test of cross-boundary integration lies in the authenticity verification of off-chain assets, isolation of extreme default risks, and the construction of a closed-loop fund flow.
• Development Trends: Digital asset platforms equipped with professional due diligence and asset selection capabilities are forming complementary advantages with native on-chain protocols. By introducing mature risk management tools and compliance frameworks from traditional finance, leading institutions are striving to provide the market with more robust, institutional-grade cross-border asset management models.

1.Macro Background: The Two-Way Alignment of Crypto Market Capital and Real Supply Chains

The core commercial logic of supply chain finance relies on the credit of core large enterprises to provide liquidity support to upstream and downstream MSMEs. However, in the actual operation of the traditional financial system, this model faces significant structural friction, which precisely provides an entry opportunity for digital crypto capital with abundant liquidity.

1.1 Structural Friction in Traditional Supply Chain Finance

• Long Payment Terms and Cash Flow Rupture Risk: Core enterprises usually hold a dominant position in the supply chain, and upstream suppliers are often forced to endure payment pressure of 30 to 90 days or even longer. This capital occupation makes the cash flow of frontline manufacturing entities highly susceptible to rupture.
• Traditional Credit's "Collateral Worship": Traditional bank risk models rely heavily on the entity's balance sheet and heavy asset collateral. According to a report by the Asian Development Bank (ADB), the global trade finance gap has reached approximately $2.5 trillion, leaving many SMEs with real business orders unable to obtain low-cost credit due to a lack of physical collateral.

1.2 Profound Evolution of Crypto Market Capital Attributes

• Return from "High-Leverage Gaming" to "Real Yield": After several brutal bull-bear cycles, vast crypto capital has become increasingly cautious about yield models solely dependent on on-chain high leverage and empty speculation, and high-net-worth users' preference for diversified asset allocation is showing an irreversible upward trend.
• Hedging Single Systemic Risks: Compared to pure crypto-native assets, supply chain assets based on the cash flow of the real-world economy have unique advantages such as transparent underlying logic, low correlation with crypto cycles, and inflation resistance. Introducing such assets into the digital market is an ideal cornerstone for building a robust wealth management ecosystem.

2.Operational Mechanism: The Underlying Restructuring of Supply Chain Finance RWA

Transforming non-standard, low-liquidity supply chain cash flows in the real world into financial products available for subscription in the digital asset market requires a rigorous asset structuring and restructuring process. This process is not simply "putting invoices on the chain," but involves complex legal right confirmation and risk pricing. Specifically, the standard operational mechanism includes the following three core stages:

2.1 Step 1: Asset-Side Rights Confirmation and Bankruptcy Remoteness

Physical enterprises first aggregate and package unmatured commercial invoices and accounts receivable with a real trade background. To completely isolate risks, the asset originator must set up a specific SPV (Special Purpose Vehicle) or introduce a formal compliance fund structure. This step legally clarifies the ownership of the underlying assets and the right to claim future cash flows, ensuring that even if the underlying enterprise goes bankrupt, the safety of the invested funds will not be affected.

2.2 Step 2: Tranched Pricing and Risk Sharing

To meet the capital needs of different risk appetites, structured products usually adopt a tranched pricing model. The senior tranche provides fixed and robust yields, enjoying absolute priority in repayment, which highly aligns with funds requiring strict principal protection; the junior (subordinated) tranche acts as a "safety cushion" for the asset pool, responsible for absorbing first-loss default risks, and is usually subscribed by the asset originator or industrial capital, thereby building a risk-sharing mechanism with deeply aligned interests.

2.3 Step 3: Fund Settlement and Circulation Distribution

After the funds are raised and precisely deployed to physical enterprises, with the completion of the underlying trade and buyer settlement, the returning fiat funds will be smoothly paid out as digital asset principal and interest to investors according to the established distribution rules of the fund or smart contract.

3.Industry Landscape: The Evolution from Native Protocols to Cross-Border Asset Management

Looking back at the development history of the integration of supply chain finance assets and Web3 funds, the entire industry has undergone a profound cognitive iteration from "technology-only" to "emphasizing compliance and risk management," leading to representative and diversified development paths.

3.1 Early Exploration of On-Chain Native Protocols: The Case of Centrifuge

As an early pioneer in the RWA track, Centrifuge provided the industry with a highly forward-looking technical template of "real assets - on-chain rights confirmation - decentralized matchmaking." Its core operational logic (the Tinlake model) is highly representative in practice:

• Asset NFTization: SME borrowers in the real world use their commercial invoices as collateral to mint Non-Fungible Tokens (NFTs) through the Centrifuge protocol, generating immutable records on the chain containing key information such as invoice amounts and due dates.
• Liquidity Pools and Dual-Token Model: Investors can deposit stablecoins into the exclusive liquidity pool of the asset. The pool issues two tokens: DROP (senior, fixed yield, and low risk) and TIN (junior, floating yield, and bears first-loss risk).
• Cross-Protocol Composability: Centrifuge's greatest commercial achievement lies in its strong composability, such as successfully introducing these real assets as collateral into MakerDAO's vaults to generate the decentralized stablecoin DAI, bridging the capital channels between TradFi and DeFi.

3.2 Deep Reflection and the Rise of Cross-Border Asset Management

Despite achieving hundreds of millions of dollars in financing, practitioners in the crypto industry gradually realized the complexity of the real business environment. When a physical enterprise far overseas substantially defaults or refuses to repay, on-chain smart contracts cannot automatically execute transnational court forced liquidation orders. This also prompted the industry to start thinking about how to build a more comprehensive off-chain legal and compliance safeguard system.

This profound industry reflection has given rise to the cross-border asset management and compliance wealth management sector. Digital asset platforms no longer merely play the role of technology providers but are focusing on the wealth management sector, introducing high-quality underlying assets by deeply aligning with traditional licensed financial institutions (such as trust structures, fund architectures, etc.). This hybrid model of strict centralized management, supplemented by an offline legal umbrella and institutional-grade auditing, is becoming the mainstream trend for absorbing stable large capital.

4.Core Challenges and Breakthroughs: Building an Indestructible Offline Risk Management Logic

The life-and-death test of the cross-border integration of supply chain finance has never been about how to tokenize assets, but how to combat human nature and the troughs of the business cycle in the real world. As the "gatekeeper" on the wealth management fund side, digital asset platforms must face three major traditional risk exposures directly:

①Trade Authenticity Fraud: Asset providers use shell invoices with no real trade background to obtain funds.

②Buyer Default Risk: Core buyers may enter bankruptcy liquidation due to macroeconomic fluctuations or maliciously default on payments.

③Fund Flow Risk: In a lengthy trade chain, if intermediary enterprises misappropriate or intercept repayments, the safety of the principal and interest on the wealth management side will face catastrophic consequences.

Faced with these challenges, introducing top-tier risk management methods from traditional finance into the Web3 asset management field has become an inevitable breakthrough. Taking the fixed-income wealth management plan currently being actively prepared by the Bifu platform as an example, this commercial practice relies on two well-known licensed financial institutions with deep shareholder strength and top international investment backgrounds, building a four-layer offline defense system:

• Layer 1: Compliance Foundation and Bankruptcy Remoteness. Relying on the VCC (Variable Capital Company) umbrella fund strictly regulated by the Monetary Authority of Singapore (MAS) as structural support, it ensures complete physical isolation of assets and liabilities among sub-funds at the highest legal level, providing extremely high standards of legal and asset security guarantees.
• Layer 2: Ultimate Backstop "Credit Enhancement". Introducing world-class Trade Credit Insurance (TCI) to directly transfer the single-point credit risk of SMEs to large international insurance companies. It comprehensively covers buyer bankruptcy and long-term defaults, providing a high proportion of principal protection.
• Layer 3: Sole Repayment Account Closed Loop. To prevent fund misappropriation, introducing a third-party Escrow Account from a multinational commercial bank becomes standard. Terminal buyers' payments are forced to be automatically and preferentially deducted, completely cutting off the underlying enterprises' path to touch and misappropriate repayments.
• Layer 4: Physical Goods Control and Penetrating Supervision. Underlying assets are directionally channeled to counter-cyclical, rigid-demand industries (such as plastics, agricultural products, etc.), mandating sufficient initial margin and controlling the property rights of standardized industrial raw materials. Co-managers execute penetrating on-site verification, strictly matching scale to production capacity to eliminate idle funds.

This concept of combining heavy traditional risk management with digital asset wealth management is an excellent epitome of the current CEX wealth management sector moving towards maturity and institutionalization.

5.Future Outlook and Conclusion

The deep integration of digital assets and the real economy is an irresistible trend. McKinsey once boldly predicted in its in-depth research report that by 2030, the global market size of tokenization and on-chain real-world assets is expected to exceed $2 trillion. Under this grand narrative, the cross-border combination of supply chain finance assets and digital capital shows a virtuous cycle prospect of the crypto market empowering the real economy and real assets feeding back into the crypto ecosystem. Whether it is protocols dedicated to technological innovation or digital asset wealth management platforms deeply engaged in compliance and risk management, they are all utilizing their respective advantages to jointly expand the asset boundaries and commercial imagination of the entire Web3 industry.

Bifu Research has always believed that truly high-quality fixed-income products should not be fleeting concept hypes in the crypto market, but should be "wealth anchors" capable of crossing macroeconomic cycles without fear of market bull and bear fluctuations. In the future, as the global regulatory framework becomes increasingly clear, Bifu will continue to deepen its presence in the wealth management field and firmly play its role as a "gatekeeper" for professional asset screening. Through continuous and deep cooperation with top global financial institutions, it will steadily promote the implementation of high-standard, strictly risk-managed, high-quality wealth management products, building a truly safe, robust, and sustainable digital asset management ecosystem for global high-net-worth and institutional users.

References

1. Asian Development Bank (2023)：2023 Trade Finance Gaps, Growth, and Jobs Survey.
2. McKinsey & Company (2024)：From ripples to waves: The transformational power of tokenizing assets.
3. Monetary Authority of Singapore (2020)：MAS and ACRA Launch Variable Capital Companies Framework.
4. Centrifuge (2024)：Centrifuge App & Protocol Metrics.

Disclaimer

This report is compiled by Bifu Research Institute and is for informational reference only. It does not constitute any investment advice, legal opinion, or endorsement of specific assets. The digital asset market has high volatility and risk; past performance does not represent future returns. Users are advised to fully assess risks and consult professional advisors before investing. The policy interpretations covered in this report are based on the regulatory environment at the time of publication. Because local laws and regulations may update and adjust over time, specific compliance requirements should always be subject to the latest documents released by official regulatory agencies. Bifu assumes no legal responsibility for any decisions made based on this report.