Zilliqa has powered the digital representation of a rare whisky collection known as ‘Casks of Distinction,’ which was listed earlier today on Southeast Asia’s member-driven exchange Hg Exchange (HGX) by Rare Cask Holdings Pte Ltd, a wholly-owned subsidiary of PrimePartners Corporate Finance Holdings (PPCFH). This essentially means that by tokenising it as an “asset backed security,” Zilliqa has empowered accredited investors to own a portion of this previously illiquid asset. On reaching maturity and bottling, securities can be traded on HGX for cash value. Investors can alternatively choose to receive physical delivery of one bottle of whisky from the underlying cask for each security owned.
The investment potential of luxury items and collectibles is increasingly seeing interest from the masses. HGX and its alliance of financial intermediaries — namely PhillipCapital, PrimePartners and Fundnel — thus spearheaded this project to tap into this growing market. Ultimately, BaaS (blockchain as a solution) is what made this ‘fractionalised investment model’ possible. As a founding HGX member and the official technology provider, Zilliqa has leveraged smart contract technology to “tokenise” these casks — thereby giving them provenance, accountability and traceability.
These features, which are critical to the authentication process of rare spirits, are now digitised and can be accessed by all. Unique digital tags will serve to minimise the fraud that is unfortunately all-too-common in this billion-dollar market. It will also list every transaction that has occurred for each bottle — detail of ownership and transfer, distillery, and year of production.
Casks of Distinction represent the rarest and highest-quality whiskies from the best casks held and matured at its Scottish distilleries. In fact, only around 50 are chosen each year by master blenders, with some being priced upwards of £1 million. These include casks from leading distilleries such as Port Ellen, Mortlach, Caol Ila, and others.
As some units are consumed over time, the remaining bottles accrue even more value, providing an excellent hedge against long-term inflation. As the market for limited-edition items soars, tokenisation may well be the next frontier in ownership of luxury assets.
Willie Chang, COO of HGX, said:
“Thanks to the emergence of digital asset-backed securities, high-yielding investment options (such as luxury items or pre-IPO shares) are now more accessible to a much wider pool of investors. 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. Their secure, affordable and scalable protocol has made cask tokenisation a practical and efficient endeavour. This project is just the beginning for a market that has so much opportunity, and I have no doubt we will unlock more possibilities together!”
‘Casks of Distinction’ whisky tokens are minted and managed by Zilliqa’s fungible token smart contract — the ZRC-2 standard. Zilliqa also built a custom platform to integrate HGX’s business operations with our blockchain. Our strategic partner Treasure Cloud (previously known as Anqlave) has also contributed in the form of a highly secure vault solution — where the cask tokens are stored for the token custodian.