Gold tokenization becomes an example of success for commodity tokens!

Por Cassio J. Krupinsk
Em 22/09/2023

The tokenization of assets has overcome all barriers that can be imposed on this revolutionary technology, be it object, socioeconomic reality or geographic barrier. The big test now comes from Zimbabwe with the tokenization of gold.

Zimbabwe’s central bank introduced the GBDT (gold-blacked digital token) in April 2023 and has already operated issues representing just over 300 kilograms of gold by July.

GBDT tokens are backed by physical gold held by the country’s central bank, which foresees a second phase when golden tokens will complement and replace the demand for dollars in domestic transactions.

Gold is a highly strategic commodity in all economies due to its power to preserve value in times of internal or global crises. So what will be the impacts of the Zimbabwean government’s decision on the local economy and businesses around the world?

Is this another sign of a tokenized economy?

BLOCKBR, a company that develops tokenization infrastructure, will talk about commodity tokenization as a new frontier to be reached by blockchain technology!

WHY GOLD TOKENS ARE EMERGING IN ZIMBABWE

Zimbabwe is facing severe inflation that reached an accumulated rate of almost 180% in June 2023 and the government is forced to set a basic interest rate, corresponding to the Selic in Brazil – at 180%.

As a result, the US dollar became part of the economy’s daily routine, further devaluing the Zimbabwean dollar. With the golden token, the government intends to offer an option for internal businesses.

Another important expectation is the fact that the digital asset is a safer, more efficient means of exchange, with the advantage of divisibility – the fractionation of the token – and the ability of the golden metal to preserve value.

In addition to the GBDT, the government also plans to establish the Zimbabwean CBDC, a digital fiat currency modeled on the Brazilian DREX, taking advantage of the expertise that will be acquired with the creation of gold-backed cryptoassets.

UNDERSTANDING HOW COMMODITIES TOKENIZATION WORKS

Tokenizing commodities is a possibility that still raises doubts for producers and exporters, after all, they are products that generate worldwide revenues of trillions of dollars annually and many are mainstays of economies, such as oil and soybeans in Brazil.

Commodity-backed token is the use of blockchain technology to trade commodities with the benefits of:

Decentralization: elimination of intermediaries and respective costs in negotiations, as they are now carried out directly between digital wallets of sellers and buyers;
Security: the digital ecosystem is highly secure, with a structure that prevents fraud and the duplicate use of a token unit;
Availability: it is possible to invest in tokenized gold at any day and time;
Globality: a person can invest in gold tokens in Brazil while being in any other region of the world.

WHAT ARE THE CHARACTERISTICS OF THE COMMODITY TOKEN?

Represents ownership of a quantity of physical commodity – gold, oil, grains and others;
It has no intrinsic value – it represents the appreciation of the underlying commodity;
There is no physical possession but the right to income at the time of renegotiation;
Does not require logistics to store for the acquirer;
The volume of tokens in circulation must correspond to the actual quantity held.

For the mining market, gold in tokens is an innovative strategy for capitalizing on projects that through financing methods can become extremely costly, and earning greater profits with the advantages of tokens in negotiations.

For the public, especially medium and small investors, it is an excellent opportunity to diversify investment portfolios.

WHY GOLD TOKENIZATION IS AN EXAMPLE TO FOLLOW

The tokenization of gold in the world is a beautiful example of how cryptographic technology can be the offering model of the future – and best of all, it is already present in several markets.

Gold production is supported by one of the most complex and expensive production chains in the world, where risk tolerance is very low – a simple loss can cost billions of dollars.

Within this vision, it is natural for the market to be resistant to using digital assets to trade, however tokenization is beneficial to deal with two critical mining success factors.

FINANCING OF MINING PROJECTS

Financing mining projects is expensive and time-consuming, in addition to requiring guarantees that are unfeasible for small and medium-sized mining companies. The offering of gold tokens allows you to raise more resources with greater liquidity, remunerating investors better than many fixed income investments.

INVESTMENT AND ACQUISITIONS EXCHANGE

A large part of mining investments are imported and of high value, exchange rate variation is a major challenge for profitability. In the same way as the Zimbabwean government projects, with gold tokens, it is possible to reduce the weight of the dollar when making transactions with tokens.

CAN ANY REAL ASSET BE TOKENIZED?

Technically, every asset can be tokenized, whether it is a real, financial or digital asset, a business project or rights.

However, it is worth highlighting that not all assets should be tokenized. It is essential to evaluate whether tokenization is a strategy that will provide the expected results and compatible with the investment.

In summary: analyze the relationship between investment and return through a technical, fiscal and legal feasibility study of the assets, considering:

The complexity of tokenization governance compared to the revenue perspective;
Compliance with requirements that guarantee legal clearance;
Fiscal regularity – payment of taxes, absence of tax irregularities.

For some assets to be tokenized, there are specific regulations, such as real estate, which does not prevent real estate tokenization from being a success with projected revenues of US$2.3 billion to US$5.6 billion between 2021 and 2026.

This study must be carried out by a qualified and experienced asset tokenization company such as BLOCKBR to reconcile the revenue potential, projections and investment in tokenization.

Do you know what tokenization infrastructure is and how it is fundamental for business with transactional tokens? Discover BLOCKCBR’s differences!

TOKENIZE YOUR ASSETS WITH BLOCKBR!

Tokenization is a reality that is becoming present in all segments and business models, it is not something so innovative that it should still be seen with suspicion. Companies and individuals are currently monetizing tokens.

Recent actions by BACEN and CVM signal that tokenization is legal and the digital real will be a great divisor to increase the credibility of technology for those who want to invest in digital assets.

Offering your business token is simpler than you might think. Do you want to see your target audience buy tokens from the competition?

Come and talk to BLOCKBR.

We have the best token offering strategy on the market!

BLOCKBR Digital Assets is a fintech specialized in tokenization of assets and investments that delivers infrastructure to the regulated and non-regulated market through an All-In-One platform that offers the transformation and interoperability between assets and investors.

For more information, visit: http://www.blockbr.com.br or @blockbr_ on social networks