Stable Coins, as their name suggests, stand for stability and durability. The new DGLD token, however, takes this principle to the next level. After all, it is not bound to capricious paper money, but to a precious metal.
Gold and bitcoin. As different as the (un) comprehensible external nature of the two assets may appear at first glance, they share the common claim of being an alternative to fiat money as a store of value. The DGLD token, which has been publicly available since December 12, now connects these two goods. Because the transactions of the stable coin are booked on the Bitcoin blockchain, the value of the token is linked to gold.
Specifically, each DGLD token corresponds to one tenth of a troy ounce of gold, which is equivalent to around 3.1 grams. The gold comes from MKS, a Swiss financial services provider specializing in precious metals, which consequently stores the gold in Swiss safes. The asset manager CoinShares created the token itself. It is tradable on the Bitcoin exchange The PIT from Blockchain.com. In addition, it can also be exchanged for physical gold. According to the press release, the cooperation partners have so far digitized gold worth $ 20 million.
Gold is becoming more liquid thanks to Bitcoin Blockchain
Such a tokenization of gold promises numerous advantages. Finally, this step simplifies and speeds up trading in the precious metal. Because the gold itself does not have to change its physical location, instead the DGLD token acts as a “proof of ownership”. The stable coin continues to automate gold trading. Since there are no middlemen, business can now be carried out around the clock. Daniel Masters, chairman of CoinShares, even suspects the emergence of a new gold standard here:
“If there was a Gold Standard 2.0, DGLD is what it would look like: supranational, secure ownership of physical gold that can be issued digitally. That’s exactly what DGLD is – the world’s most durable physical asset, gold, combined with the world’s most resilient network, Bitcoin, to make gold usable digitally.”
However, Charles McGaraugh, head of the market department at Blockchain.com, goes one step further in his statement. Bitcoin and gold together prove to be the most promising assets for him:
“Too often you’ve played gold against rival Bitcoin. With DGLD, we threw this question out the window to show that the world’s two toughest assets are the ideal complement for investors around the world. Market conditions are likely to favor increasingly hard investments in the coming years, which is why I believe that this mutually beneficial interplay will become increasingly important over time.”