The Dubai Multi Commodities Center (DMCC) has announced a new partnership with Comtech Gold to digitize gold trading. The DMCC said the tokenized precious metals are backed by DMCC Tradeflow-registered gold bullion, and each tokenized gold bullion “will be backed by a Tradeflow warrant.”
DMCC to Digitize Gold Bars Recorded by Tradeflow via Xinfin Blockchain
The Dubai Multi Commodities Center (DMCC) is a free zone in the United Arab Emirates established in 2002, and is considered the region’s authority on commodity trading and enterprise. DMCC is one of many free zones in the United Arab Emirates (UAE), like International Free Zones Authority (IFZA) and Jebel Ali Free Zones Authority (JAFZA). On November 21, 2022, the DMCC announced a partnership with Comtech Gold as the UAE Free Zone plans to tokenize gold settlement.
The announcement says a crypto coin called the commtech gold token (CGO) will be minted using the Xinfin Protocol (XDC) blockchain network. According to the website, Xinfin is called an “enterprise-ready hybrid blockchain” that combines “the power of the public [and] private blockchains with interoperable smart contracts.
Each CGO token will represent gold bullion registered by Tradeflow and they come with an attached Tradeflow mandate. Tradeflow is an online commodity platform from the United Arab Emirates that was launched in 2012. CGO Tradeflow’s listing and mandate adds “additional security, transparency and real asset allocation, according to the DMCC announcement details.
Each CGO token represents one gram of .999 fine gold that is “Sharia-compliant and fully backed by physical gold in form.” Physical bars that have been tokenized “will have unique identification numbers and certificates coming directly from the refiners.” Ahmed Bin Sulayem, Executive Chairman and CEO of DMCC, believes that there is a need for real assets tokenized like CGO.
“Recent market events have highlighted the need for greater transparency and crypto tokens backed by real underlying assets,” the DMCC CEO said in a statement. “Our partnership with Comtech Gold to enable trading of tokenized gold bullion backed by DMCC Tradeflow mandates addresses this need head-on.”
The commtech gold token (CGO) joins a handful of gold-backed tokens that already exist. For example, Paxos issued tokenized ounces of gold and the company PAXG Tokens have a market valuation of approximately $476 million. Tether issues gold-backed tokens called XAUT and the XAUT project has a market capitalization of approximately $420 million as of November 23, 2022.
Perth Mint also issues gold tokens and the PMGT market has an aggregate market capitalization of approximately $2.16 million. Precious metals and media company Kitco owns an ERC20 gold-backed token called kitco gold (KGLD)but the project has not seen much noise since its announcement.
What do you think of DMCC and Comtech Gold launching one-gram gold-backed tokens called CGOs? Let us know what you think about this topic in the comments section below.
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