SEBA Bank Launches Its Own Crypto Gold Token

The Swiss are taking the gold – to the Ethereum blockchain.

After announcing the move back in March this year, Swiss bank SEBA issued its gold-backed stablecoin. The token will allow users to own physical gold digitally. The bank will record the ownership on the Ethereum blockchain – an immutable ledger used to record crypto transactions.

Specifically, SEBA says that the token will give investors a more accessible way to hold gold. In particular, investors can use the token to redeem their physical gold on demand.

Furthermore, the banking platform states it sources its gold responsibly. Therefore, the company aims to set a new standard in the stablecoin sector.

To provide the stablecoin, the bank partnered with the aXerdas, a blockchain-based platform for precious metals. Furthermore, it partnered with Argor-Heraeus, a leading provider in the precious metals industry.

The partnerships allow SEBA to give its investors access to holding gold without paying transport and storage fees.

CEO of SEBA Bank, Guido Buehler, said that the token would provide a frictionless way to own gold. However, he also emphasized that the token falls under regulation by the financial authorities.

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. 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.

Ethereum Stablecoin

The token will exist on Ethereum, the largest blockchain network after Bitcoin. These networks record all transactions on a single, public and immutable ledger. Ethereum is also the largest blockchain with smart contract functionality. In particular, smart contracts are fundamental for the SEBA product. For example, these contracts can verify the serial numbers of the stored gold bars.

Christoph Wild, CEO of Argor-Heraeus, stated that the cooperation is an excellent example of using blockchain in the fintech sector.

The cooperation with SEBA and ARGOR-HERAEUS via our DLT-based business network is a great example to use latest blockchain technology to achieve novel and efficient financing solutions.

On the other hand, the bank pointed out the use of the token as a stablecoin. That means that users can use the token on crypto markets. Specifically, they can exchange the token for other cryptos and use it as a store of value. Each token will be the equivalent of a gram of gold.

Stability attracts investors in stablecoins. As a result, the stablecoin sector multiplies, reaching over $150 billion in market cap. Moreover, many investors prefer holding stablecoins over fiat currency. This is primarily due to ease of use, self-custody, and privacy.

Furthermore, gold stablecoins could be particularly attractive to crypto investors. These investors may want to lock in the profits from the highly volatile cryptos. In addition, gold stablecoins allow them to benefit from the precious metal’s properties as a hedge against inflation. At the same time, they don’t need to move their assets in and out of the blockchain.

Why Gold?

Gold remains a significant player in capital markets, passing $11 trillion in its market cap. Gold offers a reliable hedge against inflation and stores value in times of economic crisis. Likewise, gold-backed currencies have an excellent reputation for fighting hyperinflation, one of the common fears of crypto investors.

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Stablecoin giant Paxos was the first to launch a gold-based token in 2019. The “PAX Gold” (PAXG) pegs its value to one troy ounce of gold stored in London vaults. Stablecoin giant Tether also issues its gold stablecoin.

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