Through the tokenization of the precious metal, which is backed by actual gold bars recorded on Dubai Multi Commodities Centre (DMCC) Tradeflow, Dubai’s DMCC has teamed up with ComTech Gold to digitise the trading of gold. DMCC Tradeflow is an online portal for registering the ownership of goods kept in UAE facilities that were introduced in 2012. It offers a variety of online services made specially to make it easier to finance jewellery and collateral and to give Islamic finance solutions.
Given that the tokens are backed by tangible assets, this cooperation extends Tradeflow’s lineup of Sharia-compliant goods. In the first half of 2022, Tradeflow recorded approximately 67,000 transactions involving Islamic finance, totalling Dhs746 billion. The volume over the past six months has been the biggest ever for the platform.
According to a report from the Dubai Media Office, Comtech Gold Tokens (CGO) would be issued on the XinFin Protocol (XDC) blockchain network based on the deposit of real gold bars that are kept in vaults that have DMCC approval.
Each gold bar will be backed by a Tradeflow warrant, combining the convenience of trading a tokenized asset with the added security, transparency, and real-asset allocation that the Tradeflow warrant offers. Investors and traders will be able to purchase as little as one gramme of gold per token, democratising the asset class by increasing its availability.
The tokens are fully backed by physical gold in the form of one-kilogram gold bars of 999.9 purity from internationally famous companies and are Shariah compliant. Each bar will have a distinct ID number and a certificate directly from the refiners, in accordance with international best practices for transparency in the precious metals industry.
Ahmed Bin Sulayem, executive chairman and CEO, DMCC, said: “Recent market events have highlighted the need for greater transparency and crypto tokens backed by underlying, real-world assets. Our partnership with ComTech Gold to enable the trade of tokenised gold bullion backed by DMCC Tradeflow warrants addresses this need head-on. DMCC firmly believes that blockchain solutions will drive long-term growth in global trade across industries and asset classes, and this latest announcement is another testament to this core belief.”
Navin D’Souza, CEO 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 tokenised. 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.”
