Berlin-based Swarm Markets launched a new way for investors to hold and trade gold digitally, using non-fungible tokens to represent physical gold bars.
This platform allows for secure and verified ownership of gold in a digital format.
Bars and Brink’s
Swarm Markets told that each NFT will represent ownership of a specific gold bar which is stored in secure vaults, by Brink’s in London.
The bars have unique identifiers that link them to the corresponding NFTs, ensuring clear ownership.
This system allows investors to hold their gold digitally and even redeem the NFTs for the physical gold if desired.
Philipp Pieper, co-founder of Swarm Markets described their service like creating an Amazon Web Services, but for gold, and on the blockchain.
Investors will have detailed identifiers for their NFTs, linking them directly to a specific physical gold bar or ounce, so they can digitally manage their holdings, redeem the physical gold, and choose where to store it.
MiCA compatibility
This launch happens just before new European regulations under the Markets in Crypto-Assets Regulation, the famous, or infamous MiCA law, which come into effect on July 1. MiCA introduces pretty strict rules for asset-referenced tokens, including those based on gold, but NFTs remain outside these regulations because they are unique and non-fungible.
Swarm Markets announced that their product complies with MiCA rules to provide investors with confidence.
NFT, KYC, AML
A key feature of Swarm’s digital gold NFTs is their ability to be traded and used in peer-to-peer transactions.
Investors can trade these tokens on the Swarm Markets platform or other compatible marketplaces, allowing for liquidity and market participation similar to traditional gold investments. Blockchain technology facilitates these transfers and trades.
Token holders can redeem their NFTs for the underlying physical gold, but this process includes Know Your Customer (KYC) and Anti-Money Laundering (AML) checks to meet the legal standards.
Once verified, investors can select the jurisdiction for storing their gold, providing more control and customization over their investments.
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