With just over a week left before the EU’s Markets in Crypto Assets Regulations (MiCA) stablecoin rules take effect, one real-world assets (RWA) platform is exploring ways to offer asset-backed tokens. This is the issuance of gold-collateralized NFTs. .
Berlin-based Swarm Markets plans to allow individuals to purchase NFTs that represent ownership of physical gold, according to a release shared with Block. The gold bullion backing the tokenized assets is stored in Brink’s vaults in London.
Users can exchange NFTs on a peer-to-peer basis through Swarm’s decentralized over-the-counter (dOTC) platform after passing know-your-customer (KYC) and anti-money laundering (AML) processes.
“I think NFT innovation has been overlooked thanks to the hype cycle we saw during the last cryptocurrency bull market,” Swarm co-founder Timo Lehes told The Block. “Many people equate NFTs with monkey-based JPEGs that sold for millions of dollars. In reality, NFTs have the potential to put billions of dollars worth of real and tangible assets on the blockchain.”
“NFTs provide an unparalleled level of transparency for token holders, and this structure allows people to benefit from the liquidity of DeFi while leveraging the value and liquidity of TradFi. Swarm seeks to expand the universe of assets on chain and Tokenized gold is just the first step, and market participants can expect more from Swarm on currently unregulated market aspects such as base metals and carbon credits,” added Lehes.
Swarm has more than $14.6 million in total value locked into the protocol, according to the company’s website. In addition to gold, the platform offers tokenized public company stocks and U.S. Treasury bonds.
MiCA Rules
Swarm claims that tokenized gold will not face upcoming Markets in Crypto Assets Regulations (MiCA) regulations. “This regulation should not apply to cryptoassets that are unique and non-fungible with other cryptoassets, including digital art and collectibles,” according to the official MiCA text.
The European Union first passed MiCA in mid-2023 to regulate digital asset markets and combat related money laundering. The Block previously reported that MiCA would be fully effective by the end of 2024.
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