UAE DMCC goes all in on tokenized Gold

 

In the past week, UAE’s Dubai Multi Commodities Centre (DMCC) has signed two partnership agreements with Gold tokenization entities. DMCC signed an MOU with Asian digital gold platform, SafeGold, to develop an ecosystem in the MENA for gold backed digital certificates starting from the UAE and then spreading across MENA.

The MENA region is home to a $20 billion gold market. Gold is a high-growth industry in the UAE; according to the World Gold Council, UAE gold consumption surged by 57 percent in 2021.

As per the announcement Gold bars will be physically stored in secure vaults, and verified by warrants issued on DMCC’s Tradeflow platform, a transparent central registry of ownership for gold and commodities stored in UAE facilities. The digital certificates that are backed by gold can then be traded on SafeGold’s platform, providing investors with greater levels of transparency and confidence.

Gaurav Mathur, Founder and MD, SafeGold, noted that the UAE is an ideal hub for a global digital gold platform.

Ahmed Bin Sulayem, Executive Chairman and CEO, DMCC, added "Given the increased ease of trading digital assets, especially in gold and precious metals, our collaboration with SafeGold is a vital step towards consolidating an ecosystem for digital gold at the global level. Partnerships built on trust and transparency is vital in serving the entire gold industry, and DMCC is perfectly positioned to drive these efforts given our extensive knowledge in gold, world-class infrastructure across the entire gold value chain and ongoing work in blockchain and web3 sectors."

The DMCC had also announced its partnership with Comtech Gold to digitize the trade of gold through tokenization which will also be registered on DMCC’s TradeFlow platform. Comtech Gold Tokens (“CGO”) will be created on the XinFin Protocol (XDC) blockchain network based on the deposit of physical gold bars located in DMCC-approved vaults.

Each gold bar will be backed by a Tradeflow warrant, meaning that the increased ease of trading a tokenized asset is combined with the additional security, transparency, and real-asset allocation provided by the Tradeflow warrant.

With each token representing one gram of gold, investors and traders will be able to buy as little as one gram, democratizing the asset class by making it more accessible. The tokens are Shariah compliant and fully backed by physical gold in the form of 1kg gold bars of 999.9 purity from globally-renowned brands. In line with international best practices for transparency in the precious metals sector, each bar will feature unique ID numbers and certificates direct from the refiners.

 

Ahmed Bin Sulayem,  believes that the  partnership with Comtech Gold  for tokenized gold bullion  using  blockchain solutions will drive long-term growth in global trade across industries and asset classes.

Navin D'Souza, Chief Executive Officer at ComTech Gold, said: "A partnership with DMCC is an exciting moment for us as we continue to grow with 122 kgs of gold already tokenized. Tradeflow warrants add the security, control, and transparency to the gold tokens necessary to build investor trust and confidence. This, along with the Shariah certification, makes Comtech Gold Tokens (CGO) an ideal and robust product developed on blockchain technology for regional and international investors."

In My previous article ‘ UAE the new home for Gold backed tokens’ on LaraontheBlock it was noted that the UAE has become home to Gold tokenization entities from around the globe and this could be the market that many crypto enthusiasts are looking for amidst the bearish crypto and financial markets.