Dubai To Issue Gold-Backed Crypto Tokens
Dubai Multi Commodities Centre (DMCC) is partnering with ComTech Gold to issue gold-backed crypto tokens representing physical gold bars. The commodities exchange tradable tokens will be deployed on enterprise blockchain XinFin Protocol.
DMCC Is Partnering With ComTech Gold To Digitize Gold Trading
On November 21st, the Dubai Multi Commodities Centre (DMCC), a UAE Economic Free Zone established in 2002 considered to be the Middle East’s primary commodities trade and enterprise authority, announced plans to offer investors the opportunity to buy and trade gold-backed digital tokens.
DMCC is partnering with ComTech Gold to digitize gold trading on the commodities exchange by converting them into crypto tokens backed by physical gold bars registered on the DMCC Tradeflow. The ComTech Gold Tokens (CGO), which are pegged to gold deposits in DMCC-approved vaults, will be deployed on the XinFin Protocol (XDC) – an enterprise-grade blockchain with interoperable smart contracts.
DMCC Tradeflow is an online platform for registering the ownership of commodities stored in facilities within the UAE.
Also Check: Magic Eden Is Taking Steps Into Blockchain Gaming With Polygon
Each CGO representing one gram of .999 purity-standard gold bullion will have an embedded Tradeflow warrant with unique identification numbers and authentication certificates to verify refiners of the precious metal. The tokens will add to DMCC’s growing list of Shariah law compliant investment products. In the first half of this year, Tradeflow processed more than 67,000 financial transactions valued at over $200 billion.
“Recent market events have highlighted the need for greater transparency and crypto tokens backed by underlying, real world assets. Our partnership with Comtech Gold to enable the trade of tokenized gold bullion backed by DMCC Tradeflow warrants addresses this need head-on.
DMCC firmly believes that blockchain solutions will drive long-term growth in global trade across industries and asset classes, and this latest announcement is another testament to this core belief,” said Ahmed Bin Sulayem, Executive Chairman and Chief Executive Officer of DMCC.
With global demand for gold reaching pre-pandemic levels and central banks hoarding the precious metal in their reserves as a hedge against inflation, Dubai is making gold trading more accessible to retail investors via cryptocurrencies. The latest Gold Demand Trends report by the World Gold Council stated that demand for gold in Q3 2022 hit 1.18 tonnes, a year-on-year increase of 28%.
ComTech Gold Token (CGO) is one among the many gold-backed cryptocurrency that are currently circulating in the market, like Paxos’ PAXG and Tether’s XAUT tokens. Both assets have a combined market valuation of over $900 million. According to ComTech Gold, the company has already tokenized 122 kilograms of gold listed by DMCC.
At the time of writing, CGO is trading at $56.34, down by 0.7% in the last 24 hours.
Also Read: British Lawmakers To Grant Authorities Power To Seize Crypto Assets
