MoU signed by DMCC in Dubai on first water-backed digital asset token

The Dubai Multi Commodities Centre (DMCC) has signed a Memorandum of Understanding with AQUA-INDEX to support the initiative of launching the first digital asset token backed by freshwater resources.

The token - the first of its kind globally - is backed by verified, drinking-quality water stored in global reservoirs and will enable investors, hedgers, traders and te general public to trade, hold and take delivery of fresh water as a commodity.

Under the partnership, AQUA-INDEX will utilise DMCC’s global network, services, advanced infrastructure, and commodity marketplace, facilitating trading and investment in water assets. AQUA-INDEX will contribute to building availability and exchange of knowledge around global water usage and pricing and provide access to trading and hedging products for DMCC and its member companies. DMCC will not directly own or manage the token itself.

Ahmed Bin Sulayem, Executive Chairman and Chief Executive Officer, DMCC, said: "Nearly half the global population experiences water scarcity for at least part of the year, yet water remains the only critical resource without a mature, regulated market. We are proud to partner with AQUA-INDEX to drive a transparent, neutral, and legally coherent structure and marketplace for water to secure the future of a resource that has long been undervalued. This is the next clear milestone in the formation of DMCC Water Centre, where we will not only bring the conversation of water to the forefront, but also attract the sector's leading companies to create a global centre in Dubai for water innovation, security, sustainable best practice, knowledge and education, while ensuring that the world’s most transported commodity has the ability to reach water distressed areas."

Yaacov Shirazi, Chairman and Founder of AQUA INDEX, said: "Pricing water by the value of its usage, standardisation of water by its mineral content and quality, and turning water to a new asset class for a financial trading, is a gamechanger in the world economy. It will establish new levels of water management which prevents scarcity, contamination, and lack of access. Water as a collateral will have a significant monetary impact enabling countries and municipalities to increase infrastructure capabilities. AQUA-INDEX, with a new initiative of tokenized water resources, presents the validation of the concept. The collaboration of AQUA-INDEX’s patented innovations with the DMCC Water Centre will ensure a leading breakthrough in water ecosystems."

The announcement forms part of DMCC’s ongoing efforts to establish the DMCC Water Centre, which it is positioning as a "ecosystem for the global water industry", including positioning Dubai as a central, neutral hub for water trading and innovation. The Water Centre brings together WaterTech innovators, logistics providers and commodity traders under one platform.

"The introduction of a water-backed token forms a key pillar of DMCC’s Water Centre strategy, offering new tools for hedging risk, improving allocation and financing critical infrastructure across water-stressed regions," DMCC stated.

Further details on the token’s trading mechanism, delivery points and relevant regulatory frameworks will be announced in due course.