The blockchain solutions company Digital Asset has effectively tokenised gilts, Eurobonds, and gold through a cooperative effort.
Among the many members in the pilot programme were investors, banks, CCPs, custodians, Euroclear, The World Gold Council, and international legal firm Clifford Chance. The purpose of the demonstration was to show how tokenised assets on a blockchain might boost transactional efficiency, liquidity, and collateral mobility.
Go deeper with GlobalData
In 2023, the average daily trading volume of gold reached $162bn worldwide, indicating that the asset’s expansion and use as a trade show no signs of slowing.
High-grade, liquid assets are abundant in Sovereign Gilts and Eurobonds pools, and a total of around £2.4trn ($3.1trn) was traded in the UK’s Gilt market as of mid-2023, while there were over €12.97trn worth of outstanding Eurobond issuance.
Over the course of June and July, the initiative used 14 Canton nodes and involved 27 market players. Eleven distributed applications, comprising five margin apps and six registry apps, were used to connect five different types of cross-application transactions, totalling 500 completed transactions.
The partnership proved that it was possible to tokenise these real-world assets (RWAs), turn them into digital twins, and use them as collateral in atomic, real-time transactions.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataOlivier Grimonpont, head of product management, market liquidity, Euroclear said: “We recognise the immense value in industry experimentation to showcase the advantages of DLT for the market. As we strive to deliver even better and faster collateral mobilisation for our clients, digital technologies like DLT will be key enablers for us to achieve this.”
Kelly Mathieson, chief business development officer at Digital Asset shared: “This signals another step forward in the development and adoption of tokenised assets in collateral management, creating a more mobile operating model across different parties. Our work with the pilot participants has demonstrated that tokenised 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 added: “By digitising gold, we can overcome the perceived restrictions on moving and storing the physical metal, enabling this high-quality asset to be mobilised and used seamlessly within financial markets. To achieve this, the tokenisation process must be able to specify a Standard Gold Unit (SGU) that represents and transfers the monetary value of an agreed amount of pure gold. An attributes record can be created as a secondary token that will maintain details of the gold bars collateralised in the ecosystem. This would enable all physical gold of trusted integrity to be utilised as financial collateral, irrespective of its physical attributes and location.”
The initiative expands on the Canton Network Pilot by investigating composable applications globally. Projects such as the Tokenised US Treasuries Pilot are looking into specific use cases.
Digital Asset supplied the infrastructure, apps, and connections that market participants required to test complicated business scenarios. The Global Synchronizer was used to interoperate and perform atomic transactions across a network of separate Canton blockchains. Participants maintained complete control over their permissions, exposures, and interactions.
