Pilot Project Proves Tokenization Makes Collateral Transfers More Efficient

Real-world asset tokenization company Digital Asset has announced that it has completed its pilot initiative to tokenize UK government bonds, euro bonds and gold using the Canton Network protocol.

Securities settlement provider Euroclear, World Gold Council and global law firm Clifford Chance also participated in the process, along with other banks, investors, custodians and the central registrar, the press release said.

Tokenization refers to the process of converting real-world assets (RWAs), such as bonds, real estate, or commodities such as gold, into digital tokens on blockchains. These tokens represent ownership or control of the asset, allowing it to be bought and sold more easily and quickly in a digital format while preserving the value of the underlying property. Reports by Boston Consulting Group and 21Shares expect the tokenized asset industry to reach a value of $10 trillion within a decade.

“Our work with pilot participants has demonstrated that tokenized assets can be used instantly and effectively to cover intraday margin calls outside of normal settlement cycles, transaction times and time zones,” said Kelly Mathieson, chief business development officer at Digital Asset. “Additionally, our work confirmed the counterparty’s control over the digital twin and real-world assets secured in the event of default.”

Mike Oswin, head of global market structure and innovation at the World Gold Council, said tokenized gold also offers significant benefits. By converting physical gold into “Standard Gold Units” (SGU), the pilot demonstrated how the precious metal can be used more seamlessly as a collateral asset in financial transactions.