A unit of Ant Group Co. is advancing its efforts to link over 60 billion yuan (approximately $8.4 billion) worth of energy infrastructure and other real-world power assets to its blockchain platform, AntChain. According to sources familiar with the developments, Ant Digital Technologies, which focuses on enterprise solutions, is tracking the power output and potential outages of around 15 million new energy devices, such as wind turbines and solar panels, across China. The relevant data from these devices is being uploaded to the blockchain, marking a proactive step towards enhancing efficiency in the energy sector.
The initiative is particularly noteworthy as it paves the way for the issuance of tokens tied to these energy assets. Preliminary tokenization efforts have already begun, with Ant Digital successfully securing financing for three clean energy projects, raising approximately 300 million yuan for the respective companies involved.
Despite its promise, the tokenization of real-world assets is in its infancy. Campbell R. Harvey, a finance professor at Duke University, emphasizes the necessity of trust in this process, pointing out the need for token holders to ensure that associated companies possess the actual collateral. The potential advantages include faster, more efficient transactions at lower costs once assets are tokenized.
Looking ahead, one of the primary strategies for Ant Digital involves listing tokens on decentralized exchanges overseas to enhance liquidity for the assets. However, these plans are still under discussion and will largely hinge on regulatory approval.
In previous financing activities, last August, Ant Digital secured 100 million yuan from offshore banks to support Shenzhen-listed Longshine Technology Group, which had over 9,000 electric charging units integrated with Ant Digital’s blockchain. Following this, in December, the unit raised more than 200 million yuan for GCL Energy Technology Co. by connecting the company’s photovoltaic assets to AntChain.
Tokenization allows companies to bypass traditional financial intermediaries by issuing digital tokens directly to investors. This approach, which facilitates fractional ownership or revenue streams from assets like solar panels and battery systems, reduces reliance on brokers or centralized exchanges. Consequently, it can lower costs and accelerate funding access, potentially broadening participation to retail investors who may otherwise face barriers in infrastructure financing.
While Ant Group has not provided comments on these developments, it has made other strategic moves in the blockchain space. The firm invested in Pharos Network Technology, a public blockchain with connections to its own staff, and entered into a strategic cooperation agreement with Yunfeng Financial Group Ltd. This partnership aims to explore real-world asset tokenization using Pharos’s platform.
The future of Ant Digital’s ventures will largely depend on the regulatory landscape in Hong Kong regarding digital assets. New regulations for stablecoin issuers were introduced in August, and the Hong Kong Monetary Authority intends to supervise the issuance of stablecoins pegged to the Hong Kong dollar, with initial approvals anticipated early next year. Ant Digital is also engaged in a sandbox initiative led by the HKMA to promote blockchain use for tokenizing real-world assets.
However, Ant Digital must navigate cautiously, as mainland China maintains a strict ban on cryptocurrency transactions. Recent directives from the Chinese government aimed to curtail stablecoin-related activities and prevent potential misuse, reflecting concerns about the sector’s stability.
Currently, blockchain and asset tokenization represent a modest portion of Ant Digital’s overall revenue, with the bulk stemming from enterprise technology solutions, particularly in privacy and security. The exact revenue figures for this unit remain undisclosed. Meanwhile, Ant International, another branch of the group, is leveraging similar technology for cross-border corporate payments and is applying for licenses related to stablecoin operations.
Overall, Ant Group is strategically positioning itself within the evolving landscape of blockchain technology as it seeks to innovate and expand its financial services beyond traditional methods.
