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 novel application of blockchain technology.
Ensuring Compliance: Swarm Markets’ Approach to Gold-Backed NFTs
Swarm Markets leads the charge tokenization of real-world assets (RWA) with their gold-backed NFTs. This initiative allows individuals to purchase NFTs representing ownership of physical gold stored securely in a London-based Brink’s vault.
By enabling peer-to-peer trading of these NFTs on their decentralized over-the-counter (dOTC) platform, Swarm Markets combines the fluidity of decentralized finance (Challenge) 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.
Learn more: What are tokenized real-world assets (RWA)?
Additionally, Swarm Markets plans to position its gold-backed NFTs to comply with the next regulation of crypto-asset markets (MiCA) in the European Union (EU). The current MiCA regulation clarifies 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 unique, non-fungible physical assets, such as product guarantees or real estate.
Indeed, regulatory conformity is essential in the tokenization ecosystem, as Alex Malkov, co-founder of HAQQ Network, points out. Malkov also highlights the importance of transparency, regular audits and clear communication of security measures to build confidence with investors.
“To address cross-border regulatory challenges in asset tokenization, it is crucial to establish common standards and foster international cooperation. Implementing blockchain-based identity verification systems can improve transparency and security by providing immutable records of transactions and identities, thereby facilitating regulatory compliance,” Malkov explained to BeInCrypto.
Swarm Markets’ gold-backed NFTs are a tangible manifestation of the broader trend of tokenization of real-world assets. A recent EY report highlights that tokenization is gaining traction among institutional investors. Fifty percent of respondents in the report favor invest in tokenized assets.
Learn more: What is the impact of real-world asset (RWA) tokenization?
Institutional interests in the tokenization of real-world assets. Source: EY
“Across all investor types, 53% are interested in investing in tokenized alternative funds, 46% in tokenized public funds, and 38% are interested in investing in tokenized real estate investments. When asked about the primary motivation for interest in tokenized assets, portfolio diversification was most important, followed by access to new asset types and greater/increased liquidity,” wrote analysts at EY in the report.
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