Seba, the FINMA-listed Swiss bank, announced on December 15th that they were introducing a gold token that can be delivered on-demand, in physical form at any time from the partner refineries of the company. According to Seba, it would be possible to leverage the token as a compliant stablecoin that would be backed by gold sourced responsibly. A number of crypto products have been introduced this year by the Switzerland-based bank, such as the addition of tokens of decentralized finance (DeFi) to the firm’s product lineup. The Swiss bank had disclosed in October that its clients will be able to get a yield on their crypto holdings in an ‘institutional grade’ manner.
The Swiss bank then revealed its gold token offering on Wednesday that people can trade for physical gold when they want. The announcement of Seba said that the launch of the ‘Seba Bank Gold Token’ was a landmark introduction in the world of investment products, as it would enable investors to own a digital form of gold for the first time through a cost-effective, fully regulated and future-proof solution. The bank revealed that it had worked with Argor-Heraeus, a service provider part of the precious metals (PM) industry for this purpose.
The announcement of the Swiss bank disclosed that Axedras had developed the blockchain-based PM platform. The company said on Wednesday that the adoption of precious metals could get a boost with Seba Bank’s Gold Token because it offers a secure, cost-effective and straightforward solution for gold investments. The chief executive of SEBA Bank, Guido Buehler, said that gold had an important role to play in capital markets. He said that gold’s market capitalization is in excess of more than USD 11 trillion, which allows it to provide investors with a store of value despite any economic turbulence and acts as a reliable hedge against inflation.
The CEO said that the gold standard had once been the economic unit of account all over the world and had been the basis of the international monetary system. He went on to say that they were just adding onto the history with the introduction of the Gold Token and it would provide investors to get a regulated digital form of physical gold. The executive said that the token would eliminate any friction for investors when it comes to owning gold and would give them a cost-effective solution for owning the asset, which would be a suitable fit in the new economy.
It is important to note that the gold token by the Swiss bank is not the only one that’s built on blockchain technology. Tether Limited (XAUT) and Paxos (PAXG) have also issued gold tokens and these are backed by an ounce of .999 fine gold. Kitco, the PM industry giant, had also introduced a gold-backed token in the first week of August, which is built on top of Ethereum. In the past, these gold-backed tokens have managed to fetch a premium as opposed to the spot market prices of gold on a few occasions.