Digital Asset conducted a successful pilot to demonstrate the potential of tokenizing gold, gilts, and Eurobonds for further use as collateral.
The Bank of England building
Author: Acediscovery Wikimedia Commons
Blockchain company Digital Asset, in collaboration with Euroclear, the World Gold Council, and U.K. law firm Clifford Chance, conducted a series of trials that showcased new ways to use tokenized assets as collateral.
Specifically, the project tokenized gold, Eurobonds, and gilt-edged securities issued by the U.K. government. They were then used as collateral in real-time transactions. These tests took place on the Canton Network blockchain, involving 27 companies and 11 observers. In total, over 500 atomic transactions were executed across six categories.
According to Mike Oswin, Global Head of Market Structure and Innovation at the World Gold Council, tokenization enhances the mobility of high-quality assets like gold, whose transportation and storage often make it difficult to use as collateral in financial markets. He added that recording secondary attributes, such as the Standard Gold Unit (SGU), will allow physical gold to be used effectively as financial collateral regardless of its actual location.
Digital Asset reports that the securities market is valued at approximately $230 trillion, while the collateralized assets market is only $25.5 trillion, with Eurobonds and British gilt-edged bonds being easily transportable, unlike gold, making them a natural choice for tokenization and use as collateral.
Digital Asset previously helped The Depository Trust & Clearing Corporation (DTCC) test the use of tokenized U.S. Treasuries as collateral. Meanwhile, the Canton Network was launched by Digital Asset in 2023 to connect the systems of large financial firms.
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