Tokenising early-career transfers in the soccer world could make the system more efficient
One of the leading teams in the Brazilian football scene and one of the biggest crypto exchanges in Latin America have announced their collaboration over plans to tokenise the rights of the solidarity mechanism of FIFA.
Vasco da Gama and Mercado Bitcoin, the two entities in question, will be working on transferring this mechanism to the online sphere, where people who hold the tokens will be entitled to a percentage of the sale value of any player to the athlete’s forming club.
The FIFA Transfer Regulation functions as a selling right for a player and gives clubs an incentive to continue developing young players. Under the Transfer Regulation, the FIFA Solidarity Mechanism exists to ensure that up to five per cent of the total value of each international transfer of an athlete can be shared with all the clubs that an athlete joined throughout his career until he turned 23 years of age.
There will be 500,000 tokens in total, which the entities hope to sell for a total of R$50 million (approximately US$9 million). Each token will be assigned to a fraction of the solidarity mechanism rights of twelve athletes who have joined Vasco da Gama’s youth teams.
The president of Vasco da Gama, Alexandre Campello, reiterated the club’s history with successful players. Campello explained that the club has been looking for ways to use cryptocurrencies as a means to generate new revenue since 2018.
“We are a club that has traditionally developed great players. Many important Brazilian players emerged in São Januário”, he stated, referring to the club’s headquarters.
“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”, Campello added.
Vasco da Gama has also partnered with the MBDA, a company in the Mercado Bitcoin ecosystem that is responsible for the tokenisation of many alternative assets. In addition, the club has worked with several lawyers who have specialised in fields that are related to digital currencies, football and securities regulation.
The announcement also revealed that the team consulted with the Brazilian Securities and Exchange Commission (SEC) to confirm that the token is not classified as a security.
Mercado Bitcoin, aside from selling the token through its crypto platform, has also guaranteed the pre-purchase of 20% of the 500,000 tokens. The sale will be credited to Vasco da Gama prior to the opening of sales for the average investor.