Multiple European companies joined hands to bring gold on Bitcoin’s blockchain by launching a digital token.
Announced on Tuesday, three companies – digital asset manager CoinShares, Blockchain.com, and MKS (Switzerland) SA – formed a consortium to bring the bullion on the blockchain after a development effort of two years.
Dubbed DGLD, the digital token is backed by physical gold, which is held by a Swiss vault, valued over $20 million. Each unit of the token will be backed by 1/10th troy ounce of gold.
Commenting on the development, Peter Smith, co-founder and CEO of Blockchain, said: “For centuries, gold has played a vital role in how governments and institutions manage global economic risks. But for retail investors, physical ownership of gold at any meaningful size has remained unattainable or their money is funneled into complex investment products.”
“With DGLD, global purchasers of all sizes will be able to own and secure gold just like financial giants, without the high barrier to entry of legacy options.”
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To digitize the bullion, the companies are using Ocean Bitcoin sidechain developed by blockchain firm CommerceBlock.
“DGLD is the natural progression of our work with gold, and gold formats at MKS. With DGLD, we’ve created a new format for gold ownership which makes vaulted physical gold, digitally useful, 24/7. This has the potential to profoundly change the way gold is used in everyday life,” Marwan Shakarchi, chairman of MKS (Switzerland) SA, said.
The consortium also partnered with Globacap, a UK-regulated capital markets firm, to offer digital asset custody services to both retail and institutional investors.
The trend to digitize bullion on blockchain
Many blockchain companies are recently focusing on digitizing precious metals to tap the investors of bullion. Last week, InfinityGold, an Australian fintech firm, announced its plans to launch a gold-backed digital token on the Ethereum network.
B2C2 also dived into the market by introducing a gold-backed derivative product that will be settled in Bitcoin.