Project TimberChain: Tokenized timber as an answer to decade-long growth cycles
- Wood production in the DACH region has a structural financing problem. It lies in the peculiarity of the production of this raw material.
- Trees grow for years before value is created and income flows. Traditional banks are reluctant to finance such long cycles.
Wood production is a long-term business. Tree growth takes years. The trees then have to be felled, processed in sawmills and dried for at least a few months before they can be processed into final products and sold.
That’s why many producers have a chronic need for liquidity. At the same time, customer demand for sustainably produced wood is increasing, particularly in the construction, energy and packaging sectors.
The MiCA regulation is now decisive for the DACH region. But there is another factor: the regulations on deforestation-free supply chains in the form of EU Regulation 2023/1115. It regulates the requirements for proof of origin. Companies must fully document that their wood does not come from recently deforested areas. This is exactly where the TimberChain project comes in.
Tokenization of wood as a raw material
TimberChain digitizes timber inventories, production stages and supply chain events through RWA tokenization. Tokens represent clearly defined rights, quantities and quality levels.
The structure is based on the now mandatory MiCA rules. Institutional investors thus benefit from the new legal certainty, the corresponding liability rules and the transparent custody models.
A central element is the linking of liquidity to the particularly long production cycles of the wood industry. Investors provide capital through staking, which is deployed according to the stage of growth and processing phases.
Producers thus receive predictable financing, while investors gain access to an asset backed by the real economy.
Benefits of TimberChain
For three reasons, the TimberChain RWA tokenization creates a win-win situation for institutional investors and the capital-hungry companies in the timber industry.
First, producers receive capital without becoming dependent on bank loans. Second: Tokenized supply chains automatically produce their complete documentation – a decisive advantage for companies that need EU-compliant proof of origin.
Third: A new RWA segment is emerging, clearly regulated and with continuous demand. TimberChain thus positions itself as a bridge between sustainable forestry, digital infrastructure and institutional capital allocation.
No Comments