A consortium comprising of CoinShares, a European-based bitcoin and crypto asset manager, Blockchain.com, a provider of cryptocurrency products including one of the most popular crypto wallets, and MKS (Switzerland) SA, a precious metals and gold dealer, today announced that after two years in development, it has launched the DGLD network with more than $20M in gold digitized.
DGLD is a digital asset (token) representing allocated physical gold stored in a Swiss vault and tokenized with a side-chain built on the Bitcoin network. Best understood as a digital proof of ownership of allocated gold, DGLD leverages the immutability of the Bitcoin blockchain to provide convenient purchasing of gold with the independence of physical gold ownership, and the 24/7 nature of digital assets.
Each DGLD token is the digital equivalent of 1/10th of a troy ounce of gold, 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 simple approach unleashes physical gold and renders it both digitally usable and physically redeemable.
“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.”
– Danny Masters, Chairman of CoinShares
DGLD is not intertwined in this same legacy structure; nor, under Swiss law, is it subject to the same regulatory constraints as synthetic gold investments (e.g. exchange-traded products like ETFs). It falls under category 5 of FINMA’s stablecoin taxonomy – ‘linked to commodities with ownership rights.’ In other words, if you hold a DGLD token, you hold title to the gold – no web of intermediaries and not subject to any prudential licensing requirements under Swiss law.
“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 everyday life.”
– Marwan Shakarchi, Chairman of MKS (Switzerland) SA
DGLD will first be available exclusively on The PIT, Blockchain.com’s recently launched institutional-grade cryptocurrency exchange, later this quarter. The PIT has a diverse, global group of leading market markers and a deep lending pool to ensure constant liquidity on the platform. It is available to users in more than 200 countries, with an expansive global banking network to facilitate deposits, withdrawals, and fiat-to-crypto trading in USD, EUR, and GBP.
“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.”
– Peter Smith, Co-founder and CEO of Blockchain
Powered by MainStay Attestation Protocol
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 solutions on top of Bitcoin. Through CommerceBlock’s MainStay attestation protocol, every DGLD token redemption for physical gold, or any transfer of tokens to another wallet is cryptographically attested and “proven” (validated) via the Bitcoin blockchain; known as the most secure blockchain network.
DGLD was designed for both retail and institutional investors, many of whom require a regulated custodian to safeguard their investments. To that end, the consortium has partnered with Globacap, the UK regulated capital markets firm to offer digital asset custody. Globacap is the first authorized custodian in Europe to provide digital asset custody for institutions with the same level of rigorous oversight and robust processes expected of a tier 1 global custodian.