The Switzerland-based cryptocurrency banking platform, SEBA Bank, has announced the launch of its new digital token backed by physical gold.
In an official announcement on Wednesday, the bank noted that holders of the gold tokens can claim digital ownership of the physical gold stored in Swiss vaults.
SEBA disclosed that the tokens are fully regulated and exist based on the ERC-20 standard, custodied and traded via the Ethereum blockchain.
The bank further added that the low volatility levels of gold prices and the regulated nature of the gold tokens could allow them to be used as stable assets in trading or even as a store of value.
Speaking on the token launch, SEBA Bank CEO Guido Buehler said:
“Gold plays a major role in the capital markets. With a market cap of over USD 11 trillion, it offers investors a reliable hedge against inflation and a store of value irrespective of economic turbulence… With the launch of our innovative Gold Token, we are building on this history to allow investors to own a fully regulated digital form of physical gold for the first time.”
The Swiss digital asset bank noted that its new product differs significantly from traditional gold derivatives investment vehicles since holders can decide to redeem their physical gold at any time without bearing the cost of storage and transportation.
“Physically redeemable direct from refineries on-demand at any time, our gold token removes the frictions of owning gold for investors and provides a cost-effective solution for owning the asset fit for purpose in the new economy,” Buehler added.
Per the announcement, the issuance and custody of the gold token will be managed by SEBA Bank, which already has a banking and securities dealer license.
The bank said the launch of its gold token, which was built in collaboration with the leading precious metal service provider, Argor-Heraeus, and the blockchain-based precious metal platform, aXedras, will boost the adoption of precious metals by providing a cost-effective, secure and straightforward solution for investing in gold.
Meanwhile, in October, SEBA Bank launched a yield farming service to enable its users to earn yield on their crypto holdings.