NFTs
Swarm Markets’ New Gold-Backed NFTs Expand the RWA Sector
Tokenization is changing the world of investing by connecting traditional and digital asset markets. As part of this transformation, Swarm Markets, a Berlin-based platform, is set to launch gold-backed non-fungible tokens (NFTs).
This product offers a practical and innovative application of blockchain technology.
Ensuring Compliance: Swarm Markets’ Approach to Gold-Backed NFTs
Swarm Markets is leading the charge in tokenization of real-world assets (RWAs) with its gold-backed NFTs. This initiative allows individuals to purchase NFTs that represent ownership of physical gold stored securely in the London-based Brink’s vault.
By enabling peer-to-peer trading of these NFTs on its decentralized over-the-counter (dOTC) platform, Swarm Markets combines the fluidity of decentralized finance (DeFi) with the value and liquidity of traditional finance (TradFi). This approach improves accessibility to gold investments. Additionally, it ensures compliance with know-your-customer (KYC) and anti-money laundering (AML) processes.
See more information: What are real-world tokenized assets (RWA)?
Additionally, Swarm Markets plans to position its gold-backed NFTs to fulfill the next Cryptoasset Markets Regulation (MiCA) in the European Union (EU). The current MiCA regulation specifies that it does not cover unique and non-fungible cryptoassets, which include digital art and collectibles. The regulation also excludes cryptoassets linked to services or exclusive, non-fungible physical assets, such as product or real estate guarantees.
In fact, regulatory compliance is fundamental in the tokenization ecosystem, as highlighted by Alex Malkov, co-founder of HAQQ Network. Malkov also emphasizes the importance of transparency, regular audits and clear communication of security measures to build investor confidence.
“To address cross-border regulatory challenges in asset tokenization, it is crucial to establish common standards and promote international cooperation. Implementing blockchain-based identity verification systems can increase transparency and security by providing immutable records of transactions and identities, facilitating regulatory compliance,” Malkov explained to BeInCrypto.
Swarm Markets’ gold-backed NFTs are a tangible manifestation of the broader trend toward tokenization of real-world assets. A recent EY report highlights that tokenization is gaining traction among institutional investors. Fifty percent of respondents to the report are interested in investing in tokenized assets.
See more information: What is the impact of real-world asset (RWA) tokenization?
Institutional interests in the tokenization of real-world assets. Source: EYE
“Of all types of investors, 53% want to invest in tokenized alternative funds, 46% in tokenized public funds, and 38% are interested in investing in tokenized real estate investments. When asked about the main motivation for interest in tokenized assets, portfolio diversification was most important, followed by access to new asset types and higher/increased liquidity,” EY analysts wrote in the report.
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