Dubai Multi Commodities Centre to Issue Gold-Backed Tokens Using the Xinfin Blockchain Protocol
The Dubai Multi Commodities Centre (DMCC) has announced a new partnership with the firm Comtech Gold in order to digitize gold trading. The DMCC said the tokenized precious metals are backed by DMCC Tradeflow-registered gold bars, and each tokenized gold bar “will be backed by a Tradeflow warrant.”
DMCC to Digitize Tradeflow-Registered Gold Bars via the Xinfin Blockchain
Dubai Multi Commodities Centre (DMCC) is a UAE Free Zone established in 2002, and it’s considered the region’s authority when it comes to commodities trade and enterprise. DMCC is one of many Free Zones in the United Arab Emirates (UAE) like the International Free Zone Authority (IFZA) and Jebel Ali Free Zone Authority (JAFZA). On Nov. 21, 2022, the DMCC announced a partnership with Comtech Gold as the UAE Free Zone plans to tokenize gold settlement.
The announcement says that 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 public [and] private blockchains with interoperable smart contracts.”
Each CGO token will represent Tradeflow-registered gold bars and they come with an attached Tradeflow warrant. Tradeflow is an online UAE commodities platform that was launched in 2012. The CGO Tradeflow listing and warrant adds “additional security, transparency, and real-asset allocation, the DMCC announcement details.
Each CGO token represents one gram of .999 fine gold that’s “Shariah compliant and fully backed by physical gold in the form.” Physical bars that have been tokenized will “feature unique ID numbers and certificates direct from the refiners.” Ahmed Bin Sulayem, the executive chairman and CEO at DMCC, believes there’s a need for tokenized real-world assets like CGO.
“Recent market events have highlighted the need for greater transparency and crypto tokens backed by underlying, real-world assets,” the DMCC CEO said in a statement. “Our partnership with Comtech Gold to enable the trade of tokenised gold bullion backed by DMCC Tradeflow warrants addresses this need head-on.”
The commtech gold token (CGO) joins a handful of gold-backed tokens that already exist. For instance, Paxos has issued tokenized gold ounces and the company’s PAXG tokens have a market valuation of around $476 million. Tether issues gold-backed tokens called XAUT and the XAUT project has a market cap of around $420 million on Nov. 23, 2022.
Perth Mint also issues gold tokens and the PMGT market has an overall market cap of around $2.16 million. The precious metals firm and media company, Kitco has an ERC20 gold-backed token called kitco gold (KGLD), but the project hasn’t seen much fanfare since it was announced.