SEBA Bank To Offer Digital Token To Purchase Actual Gold On ETH Blockchain.

SEBA Bank To Offer Digital Token To Purchase Actual Gold On ETH Blockchain.

2021-12-17 | Daniel Smith

SEBA Bank To Offer Digital Token To Purchase Actual Gold On ETH Blockchain.

SEBA Bank is introducing a digital token that will enable traders to purchase actual gold housed in Swiss vaults over the Ethereum network. The innovative product from the Swiss bank is an ERC-20 token, which means it is stored and exchanged on the globe's second-biggest blockchain. This is in contrast to typical digital gold products, which would not be kept on a blockchain and hence function just as IOUs from issuers. Blockchains, like Ethereum, provide a better level of investment safety since they do not involve a verified third party to confirm digital asset ownership. Rather, they employ a decentralized ledger that is maintained by everybody in the network and maintains a single, indisputable account of all transactions. This is then enhanced by Ethereum's multi-party smart contracts — an extra layer of capability capable of, for instance, verifying the serial numbers of actual gold bars assigned to certain digital holdings. SEBA Bank's CEO, Guido Buehler, called the novel gold token a "landmark development" for the rare metals business, not just since it's the primary of its kind on the market, but also because of SEBA Bank's track history of institutional-grade legal conformity. Token holders may retrieve their real gold from SEBA Bank's partner refineries at whatever point, without suffering the transit and storage costs charged by conventional digital gold platforms like BullionVault. Every token is worth 1g ($57) of metal and is extendable to four decimal places. The token can also be utilized in digital asset exchanges as a "completely compliant stablecoin," similar to the function of fiat stablecoins Tether (USDT) and USDC. When trading digital assets like bitcoin, many cryptocurrency customers prefer to keep the earnings in stablecoin balances tied to a national currency rather than the real fiat money itself, since these blockchain-based substitutes are better to deal with, self-custody, and loan out for interest. Customers may substitute part of their sensitivity to inflation and exchange-rate volatility with access to commodities prices by introducing a gold stablecoin to their holdings. SEBA Bank is not the first firm to see the need for such a hedge Paxos, a stablecoin company located in New York, created the PAX Gold (PAXG) token in 2019, tying its value to one troy ounce of gold deposited at Brink's vaults in London. PAXG is traded on the market's top exchanges, including Binance, Kraken, and FTX. It may also be utilised to earn income on Nexo, Celsius, and Blockfi, which are centralised financial platforms. Similarly, the exchanges Uphold and have introduced their respective gold-backed currencies, UPXAU and DGLD. SEBA Bank has not yet stated whether it would provide consumers the opportunity to earn a return on their investment in its new gold token. Nevertheless, the firm has lately provided staking and earning solutions for a variety of additional digital assets, notably Polkadot (DOT) and Cardano (ADA).

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