According to Cision PR Newswire, CoinShares, Blockchain and MKS (Switzerland) launched a unique product on the market — a DGLD token secured with gold in a Swiss bank, built on the Bitcoin network.
The uniqueness of the token lies in the fact that it has the characteristics of gold and ETF, as well as the security of the Bitcoin network. To work on the project, three companies joined the consortium:
CoinShares — EU cryptocurrency manager;
Blockchain — crypto wallet developer and provider of digital products.
MKS — Switzerland a gold-trading company.
As reported, the work on the project took more than 2 years. At the moment, the capitalization of the DGDL token is $20 million in gold equivalent. It’s promised that each DGDL token corresponds to 1/10 troy ounce of gold, which is stored in a Swiss vault. The management of markets and storage of the token will be undertaken by the British company Globacap.
Initially, it will be possible to purchase a DGLD token only on the PIT exchange, which was recently launched by Blockchain. USA and Canada citizens and other sanctioned countries will not be able to purchase a token at the moment.
Benefits of Gold-Backed Cryptocurrencies
Gold collateral stablecoins may become a widespread practice in the future. The flimsy US financials and the risks of trade wars weaken the dollar and at the same time increase the value of the precious metal.
De Nederlandsche Bank (DNB) provided a report on its gold reserves and called the precious metal “an anchor of confidence for the financial system.” They note that if the system collapses, it’s the gold reserve that will become the foundation for its restoration.
Other cryptocurrencies secured by gold
Recently, the practice of issuing gold tokens has become quite popular. So, just recently, Paxos released its own stablecoin, secured by precious metal — Pax Gold (PAXG). And just a week ago, B2C2 launched a new derivative gold product, which is priced and settled in Bitcoin.
Will gold-backed stablecoins be as popular as dollar? Share your opinion in the comments section!