The European Markets in Crypto-Assets Regulation (MiCA) stablecoin rules are expected to come into effect in just over a week. However, Berlin-based RWA tokenization platform Swarm Markets has identified a potential solution by issuing a gold-backed NFT as an asset-backed token.
Swarm Markets plans to allow individuals to acquire NFTs, which represent tangible gold assets. There will be a London-based Brink’s vault where the gold bars backing the tokenized assets will be stored.
Swarm’s decentralized over-the-counter (dOTC) platform will allow users to exchange NFTs on a peer-to-peer basis. This is done after a know-your-customer (KYC) formality, together with an anti-money laundering (AML) procedure.
Timo Lehes, the co-founder of Swarm, has stated that the overexposure to the encouraging market scenario has resulted in a lack of real focus on inventiveness in the context of NFTs. He believes that the majority of people tend to identify NFTs by examining JPEGs that were sold for significant amounts of money despite the fact that they were able to generate a significant volume of physical assets for the blockchain industry.
NFTs provide unparalleled clarity for token owners, allowing users to connect and benefit from the supportive nature of DeFi. This is all in line with the value and liquidity inherent in TradeFi. Swarm has plans to expand the asset space on the chain, with tokenized gold being the first step towards commodities. There are additional benefits to be gained from Swarm regarding base metals and carbon credits while the space remains uncertified.
Swarm gets credit for having more than $14.6 million in terms of total value locked (TVL). In addition to gold, the platform also offers tokenized listed stocks and US government bonds.
Swarm emphasizes that its tokenized gold will not be subject to MiCA regulation as it does not include exclusive and non-fungible crypto assets such as online art and collections.
The EU initially adopted MiCA in the middle of last year to regulate the online asset space and abolish the associated money laundering aspect.
