On December 15, SEBA Bank, an authorized digital asset banking platform in Switzerland, launched a regulated, physical-backed digital token redeemable for delivery. SEBA stated that due to its regulatory nature and the low volatility of gold prices, the gold token could eventually be used as a stablecoin for on-chain transactions.
- Bloomberg analyst: could hit $ 100,000 and gold $ 2,000 in 2022 thanks to ‘deflationary forces’
In other words, the design of the gold token bears similarities to gold standards, in which fiat currencies are backed by their ability to exchange with physical gold, in addition to the faith that is placed in the governments that issue them. In 1971, US President Richard Nixon took the dollar off the gold standard, where it was established that every $ 35 could be exchanged for one ounce of gold according to the Bretton Woods system of 1944.
Gold-backed currencies are known for their ability to eliminate hyperinflation, a common fear among crypto enthusiasts. However, they also have the drawback of prolonging economic slumps, as governments’ ability to print stimulus is limited by the supply of gold. No country in the world currently operates to gold standards either.
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