Tokenized single-malt scotch collection launches on Singapore exchange

Rare Cask Holdings has listed a tokenized rare whiskey collection on the Singapore-based Hg Exchange. The premium whiskey collection — “Casks of Distinction” — was tokenized on the Zilliqa blockchain based on its ZRC-2 token standard.

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Commenting on the whiskies in the tokenized collection, Saayan Choudhury, senior director of commercial technology at Zilliqa told Cointelegraph:

“The Casks of Distinction represent a collection of rare, high-quality single-malt scotch whisky casks being held and matured at Scottish distilleries, including a Port Ellen 1979, Mortlach 1993, Caol Ila 1990, Benrinnes 1992 and a Talisker 1989 — each of which are estimated to mature between 2022 and 2025.”

Port Ellen, ranked 10th by Rarewhiskey101 in its top-10 list of distilleries, is highly sought after by investors.

Only accredited investors will be able to own tokenized shares of the rare whiskey collection. Owners of the Casks of Distinction tokens can trade the asset on the HGX platform or elect to receive physical deliveries of the actual bottle of whiskies based on the number of digital “coins” they hold.

HGX — a private digital asset exchange based in Singapore — is one of Zilliqa’s partners. As part of its 2020 ecosystem report, the blockchain project highlighted the tokenization of high-value collectibles like rare whiskey as one of its goals for 2021. Commenting on the listing, HGX chief operating officer Willie Chang said:

“Our listing of the world’s best whiskies as a security is a great example of this. Powered by Zilliqa’s technology, this project also signals the importance of blockchain in democratising investments.”

For Zilliqa, tokenizing the premium whiskey collection highlights the importance of blockchain technology in driving investment into illiquid assets. Back in 2018, the Scottish whiskey market was valued at almost $5 billion with an estimated market size of over $7.8 billion predicted by 2027.

As the first asset-backed security offering on HGX, Zilliqa says it will be closely monitoring several critical metrics to gauge its tokenization enterprise. According to Choudhury, these focus points will include the growth in the value of the asset as well as returns on investments for traders and the percentage of tokens sold to participants within specific time frames to measure long-term demand.

Zilliqa also claimed that blockchain-based provenance for rare whiskey would also improve traceability and accountability in the industry. According to Zilliqa, the network ledger will host detailed records of data like the year of production, the distillery and ownership transfer among others.

Zilliqa is not the first to tokenize whiskey. As previously reported by Cointelegraph, a Kentucky distiller tokenized about $20 million worth of Bourbon whiskey back in March 2020.

From real estate to art, and even company stock, asset tokenization is becoming an emerging use case for blockchain adoption. Back in Sept. 2020, fintech startup Reinno launched a $237 million real estate tokenization project.