The DGLD, a digital asset token protected by the Bitcoin “Blockchain,” was recently launched by CoinShares, a European digital asset investment firm in collaboration with Blockchain, a major crypto wallet, and provider of some major crypto products along with MKS (Switzerland) SA part of MKS Pamp Group. The DGLD is a secured network for digital gold, which is backed by Blockchain, and represents “allocated physical gold stored in a Swiss vault and tokenized with a side-chain built on the Bitcoin network.” The network was introduced with digitized gold worth more than 20 million. The consortium of the three groups has stated that the purpose of the project is to “provide the convenience of purchasing gold with the independence of physical gold ownership and the 24/7 nature of digital assets.”
The digital value of the DGLD token has been set at a 1/10th of a troy ounce of gold which is vaulted in Switzerland and the obvious benefit of this project is that it enables physical gold to be used digitally and also can be redeemed physically. The DGLD token is firstly created by allocating LBMA gold which is kept in a Swiss vault and then creating the DGLD token of the same value, which is thereafter sent to the digital wallet. Therefore, gold that has always acted as the fulcrum of geo-political economy especially in the context of monetary policy can now be used in a secure and convenient way without the involvement of any middle agency.
The chairman of CoinShares Danny Masters remarked,
DGLD combines the stability of the world’s most enduring asset, gold, with the security of the world’s most resilient network, Bitcoin. You can now have the peace of mind of Swiss vaulted physical gold, with the same convenience, but not the same layers of middleman, as owning a gold ETF.
The traditional users of gold usually purchase a synthetic product like an ETF which includes many layers involving intermediaries as it appears to be convenient and some users also purchase gold and keep it vaulted. DGLD would also be placed under the same regulations as other synthetic gold investments like ETF. Thus, with a DGLD token, one has ownership of gold without requiring licensing under Swiss legislation. As the chairman of MKS Switzerland, Marwan Shakarchi points out that this will alter the way in which we tend to use gold now and in the future.
Peter Smith, co-founder, and CEO of Blockchain said,
For centuries gold has played a vital role in how governments and institutions manage global economic risks. But for retail investors, physical ownership of gold at any meaningful size has remained unattainable… With DGLD, global purchasers of all sizes will be able to own and secure gold just like financial giants without the barrier to entry of legacy options.
The project was created and designed in a way that would prove beneficial to both retail and institutional investors who often need a safe guardian for the custody of their investments. In this case, Globacap, a capital markets firm regulated by UK has entered into a partnership in order to provide digital asset custody, being Europe’s first authorized custodian. Now it is for the consumers to decide and judge whether DGLD would indeed revolutionize the use of gold by bringing out a different mode of its use.