Hancom WITH will set up a joint venture in Dubai, United Arab Emirates (UAE), and expand its real-world asset (RWA) token business based on gold.
Hancom WITH said on the 3rd that it signed an agreement to establish a local joint venture in Dubai with Al Dhafra Al Gharbia Gold Trading (ADGT), a UAE gold transaction corporations, and Castholdings, a global business development corporations.
The agreement follows a three-party memorandum of understanding (MOU) signed in July. The joint venture will have capital of $800,000, with Hancom WITH and ADGT each holding 40% equity and Castholdings holding 20%.
The joint venture will integrate and manage the entire process from sourcing, refining, and storage of physical gold to reserve verification and Blockchain-based token issuance and redemption. By operating the gold supply chain and the token issuance system within a single entity, the plan is to enhance the linkage between physical assets and digital assets.
ADGT will handle sourcing, refining, and storage of physical gold based on its Tanzania gold mine project and local UAE distribution network. Hancom WITH will build and operate the issuance and redemption system to convert the secured gold into a Blockchain-based asset. Castholdings will work with institutions and corporations in Korea, China, and the UAE and establish local operating systems.
The three companies will also proceed with procedures to meet the authorization requirements of the Virtual Assets Regulatory Authority (VARA) in Dubai. Along with anti-money laundering (AML) and know-your-customer (KYC), they plan to incorporate compliance with Sharia, Islamic law, into the business structure. They also plan to regularly disclose, after third-party verification, whether the amount of physical gold held matches the amount of tokens issued.
With this joint venture, Hancom WITH has secured the physical gold supply chain needed for its existing gold token business. Ontorium, an RWA platform launched in April with affiliate AB Labs, issues the gold token OXAU based on 99.99% pure physical gold and links gold bar serial numbers to the Blockchain to track the underlying asset. The three companies will issue OXAU based on gold supplied by ADGT and plan to expand the business by putting mining finance contracts, linked to future gold production, on the Blockchain.
Song Sang-yeob, CEO of Hancom WITH, said, "If the agreement in July set the direction, the establishment of this joint venture has completed the organization and system to actually execute the business," adding, "Based on a stable technology and business structure that connects real-world assets and the Blockchain, we will cement our foothold in the Middle East market and expand into the global market."