CR Vasco da Gama, the Brazilian football team, and Mercado Bitcoin, one of the largest cryptocurrency exchanges in Latin America, have planned to tokenize the rights of the solidarity mechanism of FIFA.
It has been reported that the FIFA Solidarity Mechanism is a part of the FIFA Transfer Regulation, which acts as a selling right for a player and encourages clubs to develop young players.
However, through this mechanism, up to 5% of the total value of each international transfer of an athlete can be shared with all the clubs that an athlete went through during his career until he was 23 years old.
The report said that through this partnership, Vasco and Mercado Bitcoin will tokenize the solidarity mechanism, and holders of the tokens will be entitled to a percentage of the sale value of any player to the athlete’s forming club.
Brazil's CR Vasco da Gama looks to tokenize players' solidarity mechanisms https://t.co/VSZhN7cnjR — Cointelegraph (@Cointelegraph) November 5, 2020
In total, there will be 500,000 tokens, which they hope to sell for a total of R$50 million (around US$ 9 million), as each token will correspond to a fraction of the solidarity mechanism rights of 12 athletes who joined Vasco da Gama’s youth teams, among them football stars like Philippe Coutinho, Douglas Luiz, Alex Teixeira, and Allan Marques Loureiro, each of them successful in other prominent teams in Europe and Asia.
Alexandre Campello, the President of Vasco da Gama, said:
“We are a club that has traditionally developed great players. Many important Brazilian players emerged in São Januário.”
Likewise, according to Campello, the club has been looking for opportunities to use cryptocurrencies to generate new revenue since 2018.
He explained:
“This initiative is part of the strategic planning actions implemented by the current management, with a strong commitment from the financial, legal, and football departments, and with the financial assistance of KPMG.”
As per the report, Vasco is also a partner of MBDA, a company in the Mercado Bitcoin ecosystem responsible for the tokenization of several alternative assets. The club has also worked with renowned lawyers specialized in matters related to football, digital currencies and securities regulation.
Also, according to the announcement, the team formally consulted with the Brazilian Securities and Exchange Commission to confirm the understanding that the token is not classified as a security.
Mercado Bitcoin has already guaranteed the pre-purchase of 20% of the 500,000 tokens, whose sale will be credited to Vasco da Gama before the opening of the sales for the average investor.
Thus, Reinaldo Rabelo, the CEO of Mercado Bitcoin, said:
“This is a token that should change the way football deals with FIFA’s solidarity mechanism. Vasco is the first club in the world to have this token, but we want other clubs to have access to it. We are confident that we are creating a new source of revenue for football clubs.”
Source: Cointelegraph