Chinese prized trees, tea converted into digital assets

ON THE Chinese tropical island of Hainan, Huanghuali trees — a rare kind of rosewood — are being photographed so that they can be turned into digital assets.

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Huanghuali or “yellow flowering pear” produces wood with a beautiful luster and golden sheen. Favored by Chinese emperors, the wood continues to be highly prized. But a tree takes decades to mature, testing the patience of farmers.

Converting the Huanghuali into real world asset (RWA) tradeable tokens would bring capital to an industry facing cash flow problems, says Zhao Xiaobao, general manager of Dongfang Yilin, a subsidiary of Geely Technology Group.

“We are converting the dormant resource of precious wood into tradeable assets,” Mr. Zhao said, adding that the tokenization business model could revolutionize the forestry industry and “turn green mountains and clear waters into gold and silver.”

His company aims to raise $13 million in an initial tranche of tokens to be launched in Hong Kong in the next few months. Each tree will be assigned a different value, depending on its size and quality, which would then be broken up into a number of tokens.

Dongfang Yilin’s plan, Mr. Zhao believes, could mark the world’s first tokenization of tradeable RWAs that are biological in nature.

It’s also not just prized trees. All sorts of Chinese goods, from fine tea to expensive baijiu liquor, are now being turned into digital assets.

“Artifacts, collectables, data assets, commodities and real estate — we have received many enquiries about how to tokenize these assets,” Liao Renliang, a lawyer at Yingke Law Firm, told a seminar on the topic last month.