Gold held in Swiss vaults has been tokenized on Bitcoin’s blockchain with ticker DGLD by a consortium of companies.
A consortium of companies launched a gold-backed token with the DGLD ticker on a Bitcoin (BTC) sidechain.
Swiss financial news outlet AllNews reported on Oct. 15 that digital asset managers CoinShares and MKS, as well as wallet service provider Blockchain, announced the launch of the token. Its development took two years and the supply of the token is already worth over $20 million.
Meanwhile, the physical gold is held in vaults managed by bullion brand PAMP in Ticino, Switzerland. It is tokenized using the Ocean Bitcoin sidechain developed by blockchain firm CommerceBlock.
Sustainability of gold meets Bitcoin’s security
The project reportedly leverages the immutability of Bitcoin’s blockchain, with each token being equivalent to a tenth of a troy ounce of gold. The legal entity behind the token is also based out of Switzerland and is a member of the Swiss self-regulatory organization Financial Services Standards Association.
CoinShares president Danny Masters commented, highlighting the advantages of combining physical gold with Bitcoin’s security. He explained:
“DGLD combines the stability of the world’s most sustainable asset, gold, with the security of the most resilient network in the world, Bitcoin. […] You can now have the peace of mind that comes with physical gold held in a Swiss vault, with the same convenience as holding an ETF on gold, but not the same levels of middlemen.”
Advantageous regulatory framework
DGLD is not subject to the same regulatory constraints as gold-based investment products such as exchange-traded funds.
The token reportedly falls under category five of the Swiss Financial Market Supervisory Authority taxonomy on stablecoins, which is reserved for crypto assets linked to commodities with property rights. MKS president Marwan Shakarchi commented:
“With DGLD, we have created a new gold property format that allows you to digitally use physical gold stored in a vault 24/7. DGLD has the potential to profoundly change the way gold is used on a daily basis.”
As Cointelegraph reported last week, Australia’s largest precious metal refinery, the Perth Mint, and InfiniGold, a fintech startup focused on precious metals digitization, have jointly launched a gold-backed digital token as well.