“Gold performs a valuable characteristic within the capital markets. With a market cap of over $11 trillion, it offers merchants a reliable hedge against inflation and a retailer of price irrespective of business turbulence,” says SEBA Bank CEO Guido Buehler.
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On Wednesday, SEBA Bank, a licensed Swiss digital sources banking platform, launched a regulated digital token backed by physical gold and exchangeable for offer. SEBA claimed that because of its regulatory-compliant nature and the low volatility of gold prices, the gold token could well perchance perchance not without extend be aged as a stablecoin for on-chain transactions.
In other words, the produce of the gold token bears similarity to gold requirements, where fiat currencies are backed by their exchangeability to physical gold as well to faith entrusted in governments that divulge them. In 1971, United States President Richard Nixon took the buck off the gold normal, where it used to be established that every $35 in bucks would be exchanged for one ounce of gold as per the 1944 Bretton Woods machine.
Gold-backed currencies are identified for their skill to assign away with hyperinflation — a widespread apprehension among crypto enthusiasts. On the other hand, they also endure the scheme back of prolonging economic depressions as governments’ skill to print stimulus is proscribed by gold’s present. No nation on this planet currently operates on gold or silver requirements.
Buehler defined the come in within the next affirm:
“Redeemable actual now from refineries on-demand at any time; our gold token removes the frictions of proudly owning gold for merchants and offers a cheap solution for proudly owning the asset fit for reason within the recent economic system.”
Beforehand, SEBA launched a program for users to invent yields on crypto. It is the first bank within the nation to have got a digital custody license.
