- Gold has a market cap of over $11T, which makes it a good investment for the store of value and dealing with inflations
- As a result, the SEBA bank is introducing a digital token to facilitate virtual gold ownership.
According to SEBA bank CEO Guido Buehler, Gold is a perfect solution for investors who have a store of value and inflation fears in mind. Therefore, his bank is resolving to introduce a digital token pegged to the value of gold at a 1:1 ratio to facilitate virtual gold ownership.
On December 15, 2020, SEBA bank announced the launch of its gold-backed token. The coin is like a stablecoin that only varies with the value of gold and is also tradable. The bank claimed that since gold does not have any issues regarding its regulation, its Stablecoins could take over onchain trading.
SEBA bank to issue a digital token tied to the value of gold
December 15, 2021, marks a new era for SEBA bank as their new digital coin pegged to gold starts trading. The new coin compares to the gold standard of the past, where fiat currency had gold backing. However, in the era of the gold standard, the issuing government carried the burden of being trusted with investors’ monies.
The gold standards date back to 1971 when US president Richard Nixon said that his country would allow trading of $35 for an ounce of gold. This regulated trading of the gold standards for the US followed the 1944 Bretton Woods system.
These gold-backed currencies have a rich history of doing away with hyperinflation that threatens countries at some points. However, they can also be affected by some countries’ decisions like stimulus printings since the supply of gold remains constant. Due to this reason, no government relies on such standards.
According to Buehler, their new gold token eliminates the troubles of holding real gold and provides an opportunity for investors to get an asset that has low risks. Previously, this bank also announced the launch of a program that allows its clients to earn a yield on digital currencies. It is also the first financial institution in Switzerland to get a crypto custody license.
Financial institutions figure out how to adopt digital assets
In 2021, crypto adoption has taken a new shape as multiple banks have come up with solutions to join the crypto space. Even though some banks like the PBoC have rendered cryptos worthless, others adopt them.
Banks like Goldman Sachs consider using BTC as collateral for loans in the US. Others like BBVA and Swissquote are offering crypto custody services for their customers. In Particular, Swissquote is planning to launch a crypto exchange platform by the start of Q3 of 2022. These developments are encouraging to crypto enthusiasts since the future of cryptos is a little brighter now.