Switzerland’s SEBA Bank announces gold-token akin to stablecoin

Switzerland’s SEBA Bank has announced that it is launching a digital token that allows investors to own physical gold. The release noted that the Gold Token will be “a regulated digital token for investment in and delivery of physical gold on-demand.”

It is worth noting that the licensed digital assets banking platform’s token will be available as an ERC-20 token on the Ethereum blockchain.

In this context, Guido Buehler, CEO at SEBA Bank, commented,

“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.”

SEBA Bank Gold Token also claims to act as a regulated stablecoin, linked to the value of gold in Swiss vault. That also makes it similar to dollar-linked stablecoins like USDT and USDC. Furthermore, the bank noted that the development comes on the back of increased demand in the stablecoin sector with an estimated market cap of around $130 billion.

“To address demand, the SEBA Bank Gold Token can be used as a fully compliant stablecoin in the digital asset markets, allowing trading, and acting as a store-of-value to shield investors from volatility across both traditional and crypto markets.”

This essentially means that apart from secure transaction settlement, it can avoid costly fees that come with holding the precious metal in other forms.

Moreover, the bank has partnered Argor-Heraeus, a leading service provider in the precious metal industry, and aXedras, a blockchain-based precious metal platform for the token launch.

Christoph Wild, CEO Argor-Heraeus, added,

“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.”

Each token reportedly represents 1g ($57) of the metal with divisibility of up to four decimal places. Meanwhile, the holders have an option to redeem their physical gold holdings from SEBA Bank’s partner refineries.