Today, SEBA Bank, the fully integrated, FINMA licensed digital assets financial institution, announced the launch of its Gold Token, a regulated digital token to enable investors to invest in gold on-demand and have gold delivered to them.
It was announced in March this year that SEBA Bank will issue a stablecoin in conjunction with responsible sourcing of gold, providing a cost-effective way to access the precious metal and embarking on a path to become a recognized leader in the stablecoin industry.
According to SEBA Bank CEO Guido Buehler, “Gold is a key component of capital markets. Gold offers investors a reliable hedge against inflation and a store of value despite economic instability.”
According to SEBA, the gold token can be used as a stablecoin on-chain due to its regulatory compliance and low volatility. This means that the gold token is designed in a similar manner to gold standards. This is because fiat currencies are backed by their exchangeability to gold and by the faith placed in governments that issue them.
President Richard Nixon, during his presidency in 1971, took the dollar off the gold standard. This was where $35 in dollars were equal to one ounce of gold as described in the 1944 Bretton Woods Agreement.
Unlike other gold derivative investment products, the Zug, Switzerland-based firm said the token can be redeemed at any time, unlike exchange-traded funds (ETFs) or over-the-counter contracts.
Furthermore, the gold token can also function as a stablecoin in addition to being a physically redeemable store of value. Amidst rapid growth of the stablecoin sector to more than USD 130 billion, institutional investors are seeking trustworthy and regulated counterparties.
In response to demand, the SEBA Bank Gold Token can be used as a fully compliant stablecoin in digital asset markets, allowing for trading, and acting as a store of value to protect investors from volatility on both traditional and crypto markets.