Valtech Ready to Support Increasing Demand for Virtual Assets and Stablecoin Valuations

Valuation of Virtual Assets and Web3

Hong Kong recently announced the “LEAP” framework to speed up development of digital assets’ application. Meanwhile, Singapore continues to pioneer tokenisation initiatives, with StraitsX notably promoting XSGD for the large-scale tokenisation of both crypto-native and real-world assets (RWAs).

Stablecoin and its Growing Impact

Stablecoin development is accelerating rapidly, fueling broader token adoption and promoting further growth in RWAs. Enhanced investor confidence is likely to emerge as individuals increasingly convert fiat currency into stablecoin (for the first time in life), amplifying the momentum of digital asset adoption.

Max Tsang, Director of Valtech, highlights, “Valtech is actively researching the market potential and business valuation opportunities arising from stablecoin issuance and its related applications, including payments, settlements, and broader financial services. We need to think beyond the traditional cost, income, and market approaches—we must consider the underlying economics affecting the value.”

Valtech’s Experience and Key Insights

Since completing its first virtual asset valuation in 2018, Valtech has continually supported clients by valuing crypto-based contracts such as accumulators and decumulators. Valtech underscores the complexity inherent in valuing RWAs or related tokens, emphasizing transparency in underlying assumptions and their rationality.

Max Tsang further explains, “Valuation adjustments for RWAs or related tokens must consider distinct liquidity aspects—liquidity in physical assets versus liquidity in tokens. Both factors significantly influence valuation outcomes. In other words, we need to evaluate the economic perspective including demand and supply, which lead to potential valuation discount and premium.”

A common but simplified assumption in token valuation is shown below. But is that always true?

RWA Token Value = Underlying Asset Value / Total Number of Tokens

It really depends. As of 30 June 2025, numerous REITs in Hong Kong and Singapore trade below their book value (i.e. PB ratio less than 1), while some successfully achieve premiums above book value. This illustrates that financial instruments often deviate from their net asset value in market trading.

Investment Alternatives and Investor Preferences

RWA has well spread benefit of fractional ownership. In fact, fractional ownership is also possible via existing REIT structures (while in a more traditionally regulated form), allowing investors with limited capital to participate in ownership. Nonetheless, investors desiring greater control or flexibility in asset disposal often prefer direct ownership. Rational investors assess multiple RWA opportunities carefully, comparing alternatives based on their specific goals and preferences.

Evaluating Costs and Security of RWA Structures

AI frequently highlights that automated smart contracts reduce paperwork and operational costs. However, evaluating cost-saving benefits requires clarity on the cost perspective. While smart contracts minimize certain administrative expenses, physical asset management costs—such as taxes, operating, and maintenance expenses—remain unavoidable. Additionally, maintaining RWA structures and supporting market liquidity incurs significant ongoing costs. Hence, for cost comparison, people may not only compare the entry cost but also the holding costs and exit cost. While RWAs can promote security through blockchain’s characteristics, some investors may still pursue the security in holding the legal titles directly on the underlying assets.

Key Takeaways – The Role and Importance of Valuation

Economic factors influencing RWA valuations are varied and complex. Market demand and supply dynamics often lead to deviations between the theoretical and market-driven values of RWAs, which must be carefully considered. Relevant valuation assumptions and risk factors should be discussed and transparently disclosed.

Valuation remains critical throughout the tokenisation process, serving as a key reference for the value of RWAs and financial instruments at the tokenisation or conversion date. It also plays a vital role in supporting effective financial planning during the pre-deal phase.

RWAs span a wide range of asset types. Income-generating assets, such as investment properties, are typically valued based on factors like yields, rental income, and recent comparable transaction data. RWAs also include intangible and financial assets, such as equity interests.

Valuation becomes even more important when tokenisation structures involve special terms, such as guarantees or features resembling financial derivatives. In such cases, advanced techniques—such as the binomial option pricing model and Monte Carlo simulations—are essential for achieving accurate and fair valuations.

Valtech remains committed and well-equipped to meet the growing demand for comprehensive, transparent, and rigorous valuation services in the rapidly evolving virtual asset and stablecoin landscape.

Valtech Valuation is a professional valuation firm accredited with ISO-9001 in valuation advisory services. The firm is renowned for its expertise in advanced valuation techniques, customized valuation models, data-driven insights, and adherence to compliance and reporting standards. The firm has a solid track record in valuation advisory for listed companies, private equity, fund managers, and financial institutions. Valtech’s qualified team comprises members with PhDs, CPA (HKICPA), CFA, Chartered Valuation Surveyors of the Royal Institution of Chartered Surveyors, and valuers accredited with Business Valuation (ABV) by AICPA and CVA qualifications in Singapore. Valtech continues to expand into more markets by leveraging its valuation platform and recruiting local experts.