CoinShares, Blockchain and MKS partner to create gold token secured by bitcoin network
Digital asset manager, CoinShares is to partner with Blockchain, a provider of cryptocurrency products and gold specialist MKS (Switzerland) have launched the DGLD network with more than USD20 million in gold digitised.
DGLD is a digital asset (token) representing allocated physical gold stored in a Swiss vault and tokenised with a side-chain built on the Bitcoin network. DGLD leverages the power and immutability of the Bitcoin blockchain to provide convenient purchasing of gold with the independence of physical gold ownership and the around-the-clock nature of digital assets.
Each DGLD token is the equivalent of 1/10 of a troy ounce of gold and are vaulted in Switzerland. Before a new token is created, LBMA gold is allocated and placed in a Swiss vault. Then, DGLD representing that specific gold is created and sent to a DGLD wallet. This approach allows the gold to be digitally usable and physically redeemable.
Danny Masters, Chairman of CoinShares, says: "DGLD combines the stability of the world's most 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."
Under Swiss law, DGLD is not subject to the same regulatory constraints as synthetics gold investments, such as exchange traded products like ETFs. DGLD falls under category five of FINMA’s stablecoin taxonomy: ‘linked to commodities with ownership rights’.
"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 every-day life," says Marwan Shakarchi, Chairman of MKS (Switzerland).
DGLD will be available exclusively on The PIT, Blockchain’s institutional-grade cryptocurrency exchange, later this quarter. The PIT has a global group of market markers and a deep lending pool to ensure constant liquidity on the platform. It is available to users in more than 200 countries, which a global banking network to facilitate deposits, withdrawals and fiat-to-crypto trading in USD, EUR and GBP.
Co-Found and CEO of Blockchain, Peter Smith, says: "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.”
The DGLD network leverages a technology stack built on CommerceBlock’s Ocean sidechain platform. CommerceBlock is a London-based blockchain infrastructure development firm building enterprise solution on top of Bitcoin.
DGLD is designed for both retail and institutional investors and aims to be a regulated safeguard for their investments. To ensure this, the consortium has partnered with Globacap, a UK regulated capital markets firm, to offer digital asset custody.