Capital markets News

Mitsui plans to issue gold-backed digital assets

gold coins bars

Today the Nikkei reported that Japanese conglomerate Mitsui plans to issue digital assets backed by physical gold and sell them to consumers. The company has set up a cryptocurrency (or virtual currency) exchange joint venture with Seven Bank and others.

The physical commodity will be acquired via the London Metal Exchange and tokenized as ZipangCoins (ZPG), which can also be used for mobile payments. One of Mitsui’s subsidiaries is Mitsui & Co Commodities, based in London.

Mitsui is already active in the digital asset arena but with a more institutional-focused initiative. In November 2021, its subsidiary Mitsui & Co Digital Asset Management (MDM) issued a real estate security token backed by a warehouse. The token was issued on MUFG’s Progmat blockchain and marketed through SBI Securities. MDM is a joint venture with LayerX and others.

Around the same time, more than 70 Japanese companies, including MUFG, SMBC, NTT and Mitsui Fudosan, announced they were working on a proof of concept digital currency payment system DCJPY. Startup DeCurret initiated the Digital Currency Forum.

The concept of gold-backed blockchain tokens exists in several other jurisdictions and has been around for some time. In 2016, the CME and the UK’s Royal Mint announced plans for Royal Mint Gold, but the CME pulled out in 2017. Several others have successfully tokenized gold, including Tradewind MarketsPerth Mint and Turkey’s Takasbank.

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