CoinShares in collaboration with wallet provider, Blockchain.com, and Swiss gold trading firm, MKS has launched a gold-backed token named DGLD.
According to reports, the DGLD token takes the characteristics of physical gold and gold exchange-traded funds (ETFs). Also, the token has a 24/7 nature and the security of the bitcoin network.
All you need to know about the DGLD token
The process of creating the DGLD token has been on for about two years. However, the DGLD network has launched with more than $20M in gold digitized. Interestingly, CoinShares has pioneering new approaches to digital asset investing and has taken it further with the gold-backed token.
Importantly, the DGLD token represents allocated physical gold stored in a Swiss vault. Accordingly, each DGLD token has the same value as 1/10th of a troy ounce of gold.
Also, before an additional token can be created, LBMA1 gold has to be allocated and placed in a Swiss vault. Afterward, DGLD representing that specific gold is created and transferred to a DGLD wallet.
Therefore, the process creates physical gold and makes it both digitally useful and physically redeemable.
Chairman of CoinShares, Danny Masters commented on the project. “The token combines the stability of the world’s enduring asset, gold, with the security of the world’s most resilient network, Bitcoin. You can now have the peace of mind of Swiss vaulted physical gold, with the same convenience. But, not the same layers of middlemen, as owning a gold ETF,” he said.
Additionally, the gold-backed token was created for both retail and institutional investors. Besides, this group requires a regulated custodian to safeguard their investments. Hence, the network has partnered with Globacap to settle this.
Regulations and availability
In terms of regulation, Swiss law doesn’t cover the digital asset. But, the gold-backed digital asset is within category 5 of FINMA’s stablecoin taxonomy. Thus, it is linked to commodities with ownership rights.
Hence, holding a DGLD token means holding a title to the gold with no web of intermediaries. Therefore, holding a digital asset doesn’t require any prudential licensing requirements under Swiss law.
Later this year, the token will be available exclusively on The PIT, Blockchain’s institutional-grade cryptocurrency exchange.
Marwan Shakarchi, Chairman of MKS Switzerland also said: “DGLD is the natural progression of our work with gold. As well as, our gold formats at MKS. With the token, we’ve created a new format for gold ownership which makes vaulted physical gold, digitally useful, 24/7.”