A consortium of companies launched a gold-backed token with the DGLD ticker on a Bitcoin (BTC) side chain.
Swiss financial news agency AllNews reported on October 15 that administrators of digital assets CoinShares and MKS, as well as Blockchain purse service provider, announced the launch of the token. Its development lasted two years and the supply of the token already has a value of more than USD 20 million.
Meanwhile, physical gold is held in vaults managed by the bullion brand PAMP in Ticino, Switzerland. It is tokenized using the Ocean Bitcoin side chain developed by the blockchain company CommerceBlock.
The sustainability of gold joins the security of Bitcoin
Reportedly, the project takes advantage of the immutability of the Bitcoin blockchain, with each token equivalent to one tenth of a troy ounce of gold. The legal entity behind the token is also based in Switzerland and is a member of the Swiss self-regulation organization Financial Services Standards Association.
Danny Masters, president of CoinShares, commented on this, highlighting the advantages of combining physical gold with the security of Bitcoin. He explained:
“DGLD combines the stability of the world's most sustainable asset, gold, with the security of the world's toughest network, Bitcoin. [...] Now you can have the peace of mind of having physical gold in a Swiss vault, with the same comfort as having a gold ETF, but not the same levels of intermediaries. ”
Advantageous regulatory framework
DGLD is not subject to the same regulatory restrictions as gold-based investment products, such as exchange-traded funds.
Reportedly, the token belongs to category five of the taxonomy of the Swiss Financial Markets Supervisory Authority on stablecoins, which is reserved for crypto assets linked to commodities with property rights. The chairman of the Interenterprise Strike Committee, Marwan Shakarchi, commented:
“With DGLD, we have created a new gold ownership format that allows you to digitally use physical gold stored in a vault 24 hours a day, 7 days a week. DGLD has the potential to profoundly change the way gold is used daily. ”
As Cointelegraph reported last week, Australia's largest precious metal refinery, the Perth Mint, and InfiniGold, a new fintech company focused on the digitization of precious metals, have also jointly launched a digital token with backup of gold.