While Bitcoin is the principal cryptocurrency that many believe to be a safe haven asset, they fail to understand the value of asset-backed cryptocurrency.
An asset-backed cryptocurrency is a fantastic way to store and manage value without worrying about volatility or intermediary fees. As economies fail and citizens worry about their funds’ safety, they’ll want to consider asset-backed digital assets to hedge against any economic downturn. Here are a few to look forward to.
SilverCoin
From the makers of GoldCoin, SilverCoin offers a similar proposition. Built on Ethereum, SilverCoin is an ERC-20 token that allows users to purchase silver with cryptocurrency. Thanks to smart contracts, every purchase will go through automatically, without the need for background checks.
Silver is a safe-haven asset used by many to hedge against inflation. This means that most buyers hold it for long periods of time. Fortunately, all SilverCoin is backed by physical silver within the group’s vaults. That and all holders can view the holdings whenever they’d like online.
SilverCoin is private, as well. Nobody can see who holds any amount of silver. All that’s required is an Ethereum wallet, making it ideal for those who value their privacy. Purchasing silver coins online is also more economical due to the less intervention of an intermediary like a bank. Users can purchase a whole ounce of silver or simply 1/100th of one, based on their budget.
If interested, holders can redeem their SilverCoin for physical silver at any time, with a ratio of 100 SilverCoin per ounce. Versatility is king here.
Finally, SilverCoin holders can rest assured, as the private keys are supported by Ledger or Trezor hardware wallets for maximum security.
Pax GOLD
Pax GOLD is a gold-back cryptocurrency started by none other than the PAXOS financial institution. As the group focuses on the custody and movement of physical and digital assets, it should come as no surprise that they’ve released their own asset-backed cryptocurrency.
Every Pax GOLD token is backed fully by physical gold stored in a vault in London.
Like SilverCoin, Pax GOLD is an ERC-20 token built on the Ethereum network. Intending to make gold a transferable, easily spendable asset, Ethereum support means holders can easily transact their Pax GOLD anywhere in the world with low gas fees.
Pax GOLD has been regulated and approved by the United States Department of Financial Services in New York, giving the company access to the world’s most secure vaults. That and a world-class auditor reassures holders of the correlation between Pax GOLD and the physical gold in the vaults each month.
Holders might appreciate the ability to redeem Pax GOLD for actual gold bullion bars, too, as well as for USD based on the current market price.
As an ERC-20 token, Pax GOLD is tradable with other ERC-20 tokens on the Ethereum network, providing it more of a use case than simple gold ownership.
Certified Diamond Coin
Unlike gold and silver, Certified Diamond Coin is backed by, well, diamonds. Also built on the Ethereum blockchain, this project is backed by a minimum of 0.05-carat diamonds. It’s also meant to be a medium of exchange, similar to the other two projects as well.
However, there are three tokens to take advantage of when utilizing this platform. One is the utility token, the Diamond Platform Token (DPT). The DPT manages the fees from converting fiat into digital currency, similar to gas on the Ethereum network. It is an ERC-20 token.
The group then has a stablecoin called the Certified Diamond Coin (CDC). This asset is equal to 0.05-carat diamonds, which will help create a stable, transparent diamond market. Essentially, users can take this ERC-20 token and use it to convert with other cryptocurrencies.
Then there’s the Diamond Passport or DPASS. This is an ERC-721 token, which means they’re non-fungible assets, or that each one is unique. This is because each DPASS token represents an individual diamond on the platform, making it easy to see each one’s value. The DPASS part of the project is still in the development stages, however.
Overall, the goal is to provide a secure, non-volatile way to buy, trade, and manage ownership over diamonds while eliminating the middleman. There are no banks to deal with nor identity requirements on this platform.