When talking about digital gold, most crypto enthusiasts think of Bitcoin as a store of value. In Brazil, Member of the Bundestag Joenia Wapixana has now proposed a bill that provides for the tokenization of gold and other precious metals.
Digital gold in Brazil: what exactly is meant by tokenization?
Tokenization digitizes an asset using the blockchain – for tokenized real estate, for example, it is possible to easily purchase a share in a property.
Last year, tokenized stocks in particular caused a sensation on crypto exchanges. Numerous tax authorities, including the Federal Financial Supervisory Authority (BaFin), intervened by initiating investigations.
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So the “digital gold” in Brazil does not describe a new asset that represents gold. It is more about digitally mapping the mined gold safely and transparently.
Brazil, like Colombia, has a big problem with illegal gold mining activities. About half of the gold is mined illegally, according to Wapixana. At the same time, the illegal extraction of gold burdens the environment significantly more than is the case with legal mining activities.
Wapixana explained:
As the national and international press, as well as civil society organizations working to protect the forest and ensure the rights of indigenous peoples, repeatedly report, these activities are accompanied by mercury pollution, violence and deforestation.
Even if Wapixana does not name a preferred blockchain, a digital system with secure records is particularly valuable for documenting all mining activities.
All transactions with and transports of precious metals should be visible to everyone in the future. Tokenization is therefore primarily intended to create transparency.
In general, blockchain is playing an increasingly important role, especially in South America. The Argentine capital Buenos Aires, for example, wants to operate Ethereum nodes from 2023 and is working on a blockchain-based identity platform called TangoID.
Especially due to high inflation rates in many South American countries, cryptocurrencies such as Bitcoin could become particularly interesting for citizens in South America.
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