Digital Asset, Euroclear, and The World Gold Council have completed a successful pilot of tokenizing gold, Eurobonds and gilt, according to a release. The test was completed with the assistance of big law firm Clifford Chance. Others supporting the project include investors, banks, custodians, and a central securities depository. The goal was to show how tokenized assets using blockchain technology could improve efficiencies like mobility and liquidity.
Digital Asset provided the infrastructure and applications for market participants to test the scenarios. A series of independent Canton blockchains used the Global Synchronizer to execute atomic transactions. Participants were said to have remained in complete control of their permissions, exposures, and interactions.
The three different digitized securities and commodities are extremely liquid. The daily average trading volume of gold was $162 billion in 2023. The total market for Gilts in the UK is around £2.4 trillion. Europbond issuance is more than €12.97 trillion.
The project occurred this past June and July. It incorporated 500 transactions that are said to have demonstrated the ability to create digital twins of these assets while providing tokenized assets as collateral in atomic, real-time transactions.
Olivier Grimonpont, Head of Product Management, Market Liquidity, Euroclear said, he believes that distributed ledger technology will be the key enabler to provider better and faster collateral mobailization.
“This signals another step forward in the development and adoption of tokenized assets in collateral management, creating a more mobile operating model across different parties,” said Kelly Mathieson, Chief Business Development Officer at Digital Asset. “Our work with the pilot participants has demonstrated that tokenized assets can be used with immediate effect to meet intraday margin calls outside of normal settlement cycles, processing times, and time zones. It also demonstrated how the ledger can serve as the legal record and has validated the secured party’s control over the digital twin and real-world assets received as margin or collateral in the event of a counterparty default.”
Mike Oswin, Global Head of Market Structure and Innovation at the World Gold Council, believes digital assets can help gold overcome its perceived restrictions of moving and storing the physical asset.
