On the Chinese tropical island of Hainan, Huanghuali timber – a uncommon form of rosewood – are being photographed in order that they are often turned into digital assets.
Huanghuali or “yellow flowering pear” produces wooden with a wonderful lustre and golden sheen. Favoured by Chinese emperors in instances previous, the wooden continues to be extremely prized. However a tree takes a long time to mature, testing the endurance of farmers.
Changing the Huanghuali into actual world asset (RWA) tradeable tokens would convey capital to an business going through cashflow issues, says Zhao Xiaobao, the Hainan consultant for Geely Expertise Group, a unit of Chinese automaker Geely.
“We’re changing the dormant useful resource of valuable wooden into tradeable assets,” Zhao mentioned, including that the tokenisation enterprise mannequin may revolutionise the forestry business and “flip inexperienced mountains and clear waters into gold and silver.”
His firm goals to lift HK$100 million ($13 million) in an preliminary tranche of tokens to be launched in Hong Kong within the subsequent few months. Every tree shall be assigned a unique worth, relying on its measurement and high quality, which might then be damaged up into quite a few tokens.
BAIJIU LIQUOR, ARTIFACTS, COLLECTABLES
Geely Tech’s plan, Zhao believes, may mark the world’s first tokenisation of tradeable actual world assets which are organic in nature.
It is also not simply prized timber. All kinds of Chinese items, from nice tea to costly baijiu liquor, at the moment are being turned into digital assets.
“Artifacts, collectables, information assets, commodities and actual property – we now have obtained many enquiries about easy methods to tokenise these assets,” Liao Renliang, a lawyer at Yingke Legislation Agency, informed a seminar on the subject final month.
Whereas many Chinese firms seem enthusiastic about this new avenue of funding that has opened up for them in Hong Kong since final yr, blockchain-based RWA tokenisation may be very a lot in its infancy. Specifically, it stays unclear whether or not a possible onslaught in provide shall be met with enough demand, given limits on funding from mainland China.
- “There are far more assets
- than buyers prepared to purchase them. We have to increase the investor base,” mentioned Eric Zuo, managing director at Tadwill & Co.
Zuo is engaged on a mission that’s in search of to lift 523 million yuan for a bankrupt hydro dam in Sichuan province by way of digital tokens in Hong Kong.
MAINLAND CONCERNS
The worldwide RWA market has surged 115% over the previous yr to $35.7 billion, in accordance with information supplier RWA.xyz. RWA tokens are primarily backed by conventional monetary assets like bonds, shares and actual property, with U.S. Treasuries accounting for the lion’s share.
Hong Kong, which operates beneath a separate, extra free-wheeling financial system from mainland China, has embraced digital assets, eager to burnish its popularity as an Asian monetary hub.
However there have additionally been indicators that authorities in Beijing, which take a dim view of many digital assets and have banned commerce in cryptocurrencies since 2021, are involved.
The China Securities Regulatory Fee informally suggested some mainland brokerages to pause their RWA tokenisation companies in Hong Kong, sources mentioned earlier this yr.
Mainland residents can, nonetheless, commerce in RWA tokens if they’ve an account with a Hong Kong dealer.
Requested for remark, the fee referred to a December 5 assertion printed by it and different monetary authorities, which warned criminals have been exploiting the rise of stablecoins, air cash and RWA tokens, and mentioned mainland firms have been prohibited from offering such companies.
In distinction, the Hong Kong Securities and Futures Fee mentioned tokenised merchandise that quantity to securities or futures contracts fall beneath its current guidelines.
“Regulators are focusing on fraudsters who use RWA to lift cash illegally,” mentioned Liu Honglin, founding father of Man Kun legislation agency in Shanghai. He added that if an RWA mission is compliant and is used to stimulate consumption, “I do not suppose there’s any downside.”
DIGITAL TEA FOR FRIENDS
In Shanghai, startup Shanghai Teaken Applied sciences has issued digital assets that characterize desserts of extremely sought-after fermented pu’er tea. Like nice wine, the tea features in worth the extra it ages and could be a good long-term funding.
Blockchain know-how brings digital authentication to an business stricken by counterfeiting – with tea saved, say, for under 5 years, usually masquerading as 10-year-old tea, founder and CEO Eric Ma informed Reuters in an interview.
“We actually need to construct a platform for tea collectors to soundly personal and share and possibly cross on this premium high quality good tea with transparency and belief,” he mentioned, including that his firm would offer state-of-the-art storage cellars for the tea desserts.
Juno Zhu, a 27-year-old lover of tea from Xiamen metropolis who works in promoting, mentioned she had purchased 100 digital desserts of tea at 700 yuan ($100) apiece and was not fearful about compliance considerations.
“It is backed by one thing of worth. It is not a token based mostly on nothingness,” mentioned Zhu, who has given some to pals as presents.
Different examples embody China Qidian Guofeng Holdings 
1280 which has mentioned that some 62 metric tons of its baijiu have been used because the underlying assets in an RWA mission. The mission, organized by a key shareholder, goals to lift HK$500 million.
($1 = 7.0554 Chinese yuan)
