One Brazilian lawmaker has proposed tokenizing blockchain all of Brazil’s gold reserves. The lawmaker put forward this proposal in response to the prevalence of illegal mining throughout the country. It will increase transparency, says Representative Joenia Wapichana of the United States Congress.
A Blockchain-Based Gold Tokenization Act
Joenia Wapichana defends the new legislation by bringing up the topic of illegal mining in the Amazon. She claimed that the Amazon provided fifty percent of the country’s gold. But they are all the results of illegal mining.
Boletim Bitcoin, a local news outlet, recently reported that the mining of gold has a devastating effect on the surrounding ecosystem. By dumping toxic waste into the ground and water supply, we have contaminated both. Furthermore, the impact of mercury on groundwater makes it difficult to get potable water for household use.
The lawmaker also mentioned violence and deforestation as negative outcomes of illegal mining. The press, including national and international outlets, as well as civil rights activists, all reported similarly to the lawmaker.
Therefore, the bill intends to set new guidelines for the mining, trading, and purchasing of gold in the country. For auditability and openness, this would be recorded on a distributed ledger.
The lawmaker further stated that the National Mining Agency would implement a unified digital platform.
The policy is implemented, but the blockchain network’s specifics are kept secret.
Increased Tokenization of Assets on the Blockchain
Numerous sectors, both public and private, can benefit from implementing blockchain technology. Tokenizing assets is just one of many useful features.
Tokens representing commodities, stocks, and securities can be issued by businesses and institutions.
That’s why the gold market has embraced tokenization: to simplify operations and boost productivity. The tokenization of assets is a direct result of the rise of blockchain-based cryptocurrencies.
Investors and traders in the stock market are showing increasing interest in tokens backed by gold. Tokenized gold’s rising popularity stems from the fact that it can be traded on multiple exchanges, expanding investors’ options for putting their money to work.
Financial experts generally agree that gold was the first asset to be tokenized, and that the use of blockchain technology has only improved the process. The tokenization of over $544 trillion in assets is expected to occur in the next few years, according to estimates from market experts.
Regulatory agencies in the financial sector are starting to put in place the necessary policies and infrastructure to deal with the new situation. And now is the time for formalized adoption of tokenized assets.
However, sufficient guidelines would be necessary, as is the case with any brand-new asset. The entire tax procedure, security infrastructure, and regulatory structures must be in place before its widespread use can occur. For the sake of avoiding any problems with the loss of assets, investors need a quick way to navigate the sector.
As a precious metal, gold has been relied on by financiers for decades. In times of economic uncertainty and volatility, it is preferred.
By tokenizing gold on the blockchain, investors will have unrestricted access to their holdings.