Dubai Multi Commodities Centre (DMCC) has announced a partnership with Comtech Gold to digitise the trading of gold by tokenising the precious metal backed by physical gold bars registered on DMCC Tradeflow.
DMCC Tradeflow is an online platform for registering the ownership of commodities stored in UAE facilities.
Comtech Gold Tokens (CGO) will be created on the XinFin Protocol (XDC) 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, 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.”
122 kgs of gold already tokenised
Navin D'Souza, Chief Executive Officer 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."
This partnership adds to Tradeflow’s list of Shariah compliant products, given that the tokens are backed by physical assets. Tradeflow registered over 67,000 Islamic finance transactions in H1 2022, reaching a total value AED746 billion ($203 billion). This represents the highest six-month volume ever recorded for the platform.
DMCC Tradeflow was launched in 2012 to address a gap in the regional trade finance market and has witnessed a substantial year-on-year increase in transactions, driving the platform’s expansion. DMCC Tradeflow now provides a range of online services specifically designed to facilitate collateral financing, jewellery financing, and provide Islamic finance solutions.
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