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China Turns Rare Trees into Digital Assets
18 Dec
Summary
- Rare Huanghuali trees are being photographed to become digital assets.
- Tokenization aims to bring capital to China's forestry industry.
- Geely Tech plans to launch tokens backed by precious wood in Hong Kong.
In China's Hainan province, a novel approach is underway to digitize rare Huanghuali trees. These precious rosewood trees are being photographed to convert them into tradeable real-world asset (RWA) tokens. This initiative by Geely Technology Group seeks to address cashflow challenges within the forestry industry by transforming natural resources into liquid assets.
Geely Tech plans to raise HK$100 million in Hong Kong through these tokens, with each tree assigned a value based on its size and quality. This move could represent the first tokenization of biological real-world assets. Beyond trees, various Chinese commodities, including fine tea and baijiu liquor, are also being tokenized.
While companies are enthusiastic about this new funding avenue, the blockchain-based RWA tokenization market is still in its early stages. Concerns exist about matching supply with demand, especially given investment limitations from mainland China. The global RWA market has seen significant growth, but traditional assets like bonds and Treasuries dominate.
