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Leading Brazilian Football Team Implements Tokenization in Young Player Transfer

Nov 9, 2020 | News
Leading Brazilian Football Team Implements Tokenization in Young Player Transfer

It became known that a large Brazilian football club CR Vasco da Gama, together with the Mercado Bitcoin cryptocurrency exchange, is going to modify the process of transferring young players using tokenization.

What's the point. There is such a thing as the FIFA Solidarity Mechanism. Its task is to stimulate football clubs to develop young talent, and then to receive a percentage of each transfer of such a player. At the current moment, almost 5 percent of the total amount of each transfer can be divided between all the clubs which the footballer visited before the age of 23. This is especially true for small local sections and organizations since for them even 1 percent of the transfer is a lot of money.

And Vasco da Gama decided to modernize this process somewhat. For this, an agreement was concluded with Mercado Bitcoin, one of the largest exchanges in Latin America, and the process of tokenization of ownership of the club's players was launched.

It is known that 500,000 tokens will be issued for a total amount of about $ 9 million. Each token provides the opportunity to use part of the FIFA Solidarity Mechanism for one of the 12 young athletes trained by Vasco da Gama, who was then transferred to other football clubs in Europe and Asia, where they have achieved significant success. We are talking about such players as Philippe Coutinho, Douglas Luiz, Alex Teixeira, and Allan Marques Loureiro. Of course, the token holders will not be able to control the fate of the players or prohibit the transfer - but they can easily claim some profit from the process.

To ensure the legality and fairness of this initiative, the football club actively consulted both with representatives of Mercado Bitcoin who provided the base for the new token and with MBDA, which is engaged in tokenizing alternative assets. And with numerous experienced lawyers specializing in securities, both football and digital assets. Moreover, they even contacted the Brazilian Securities and Exchange Commission to agree on the legality of the new token. And yes, under current Brazilian law, it is not considered a security.

It is known that about 20 percent of the planned 500 thousand tokens have already been booked for Vasco da Gama, and the rest can soon be freely purchased on the Mercado Bitcoin exchange. Part of this currency could also be transferred to other clubs that had a hand in the education and training of players, after Vasco da Gama - as part of the already mentioned solidarity mechanism.

According to Reynaldo Rabelo, Director of Mercado Bitcoin, "This initiative will create a new source of income for football clubs, so we want other organizations to join us in this endeavor."

The president of the club, Alexandre Campello, has been looking for opportunities to use cryptocurrency to increase income for a long time - almost since 2018. But only now his ideas were finally formed and passed into the phase of implementation.

The idea of partial ownership, which makes it impossible to dispose of the asset, but allows you to count on the profit from its sale, is one of the reasons for the increasing popularity of the idea of tokenization itself. And the Vasco da Gama initiative is likely to significantly increase the interest in cryptocurrencies among Brazilians. Given the popularity of this sport in the country, very many, on a purely psychological level, would like to have a token associated with their favorite player. However, in what direction this situation will develop is difficult to predict. So - we will observe the development of events.

Published on the EXBASE based on materials from cointelegraph.com