Digital gold: Dubai puts precious metal on blockchain network

Now, investors in Dubai will be able to buy gold as a digital asset as the Dubai Multi Commodities Centre (DMCC) free zone launches a new blockchain network.

The freezone has announced a partnership with Comtech Gold to digitise the buying and selling of gold by tokenising the precious metal backed by physical gold bars registered on DMCC Tradeflow.

Buy and sell digital gold in Dubai

DMCC Tradeflow is an online platform for registering the ownership of commodities stored in UAE facilities. So, although investors may never see their asset as it is locked in a vault, they will take ownership of as little as a single gram of the precious metal.

Comtech Gold Tokens will be created on the XinFin Protocol blockchain network based on the deposit of physical gold bars located in DMCC-approved vaults.

Each gold bar will be backed by a Tradeflow warrant, meaning that the increased ease of trading a tokenised asset is combined with the additional security, transparency, and real-asset allocation provided by the Tradeflow warrant.

With each token representing one gram of gold, investors and traders will be able to buy as little as one gram, democratising the asset class by making it more accessible. The tokens are Shariah compliant and fully backed by physical gold in the form of 1kg gold bars of 999.9 purity from globally-renowned brands.

In line with international best practices for transparency in the precious metals sector, each bar will feature unique ID numbers and certificates direct from the refiners.

Ahmed Bin Sulayem, Executive Chairman and Chief Executive Officer, Dubai Multi Commodities Centre, 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, Chief Executive Officer at ComTech Gold, said: “A partnership with Dubai Multi Commodities Centreis an exciting moment for us as we continue to grow with 122 kgs of gold already tokenised”

The global demand for gold has reached pre-pandemic levels as central banks snap up reserves, the World Gold Council said this month.

Demand in Q3 hit 1,181 tonnes, an increase of 28% year-on-year, the World Gold Council’s latest Gold Demand Trends report said.