32 C
Monday, May 27, 2024
HomeAltcoin NewsStable Currencies Company Coin Shares Releasing New Gold-Supported Token

Stable Currencies Company Coin Shares Releasing New Gold-Supported Token


Related stories

Stable currencies are all the rage as of late. However, most are allegedly backed by fiat money such as the U.S. dollar, the euro, the yen and the yuan. Less often do we encounter coins backed by precious metals or similar commodities, and Coin Shares Group is looking to change that.

Stable Currencies Are Growing in Popularity

Based in London, Coin Shares is a company that specializes in stable coins. The company has recently released a new product its dubbing DGLD, which is a form of gold that’s tied to bitcoin. Gold is widely considered one of the most stable assets in the world, and likely to retain its value even during times of economic strife. Many see it as a prime tool for retaining wealth.

Thus, even though it doesn’t qualify as a form of fiat, gold works similarly with money like USD, and tying it to bitcoin creates a stable blockchain of sorts.

The company plans to release as much as $20 million-worth of the new gold-backed coin. That $20 million will come in the forms of new tokens, each one representing approximately a tenth of an ounce of gold. At the time of writing, one ounce of gold is worth approximately $1,480 – roughly one-sixth the price of bitcoin.

Meltem Demirors, chief investment officer at Coin Shares, comments:

As the stable coin starts to become more popular, we’ve seen numerous attempts to create gold-backed coins.

Over the past few years, the world has experienced a surge in stable coin popularity. Several new entities have been added to the mix, including Tether, the Gemini Dollar, and Coinbase’s USD Coin (USDC). In fact, even Facebook’s new cryptocurrency – Libra – is slated to be a stable currency, backed by a basket of different fiat including the euro and USD.

Stable coins are designed to protect investors against volatility, which is a continuing problem in the crypto space. Currencies such as bitcoin, Ethereum, bitcoin cash and Litecoin, for example, are all more mainstream than your standard stable coin. The opportunity exists to make more money with these currencies as they can incur heavy price swings that bring their value up significantly.

Volatility is a Problem

Unfortunately, this trait also works in reverse. These coins, which can move high up the financial ladder at a moment’s notice, can also lose all their value without warning, meaning that those who’ve invested everything also stand to lose everything.

As it stands, more than a dozen gold-backed cryptocurrencies exist within the space, and Coin Shares’ new product is looking to compete with all of them. The currency will be available soon via Blockchain Luxembourg’s SAs and MKS SAs platforms in the coming weeks granted the company can garner regulatory approval with the country’s legislators.

Nick Marinoff
Nick Marinoffhttps://www.livebitcoinnews.com/
Nick Marinoff is currently a lead news writer and editor for Money & Tech, a San Francisco-based broadcasting station that reports on all things digital currency-related. He has also written for a number of other online and print publications including Black Impact Magazine, EKT Interactive, Seal Beach USA and Benzinga.com, to name a few. He has recently published his first e-book "Take a 'Loan' Off Your Shoulders: 14 Simple Tricks for Graduating Debt Free" now available on Amazon. He is excited about the potential digital currency offers, particularly its ability to finance unbanked populations and bring nations together financially.


Latest stories