Switzerland-based digital banking service provider, SEBA Bank AG has launched tokenized gold services for its customers.
Per a Forbes report, holders of the Ethereum network-based digital token will be able to redeem it for physical gold with any of SEBA’s partner refineries.
The SEBA digital token is an entirely different product compared to other more gold-backed traditional investment instruments such as Exchange Traded Funds (ETFs) as holders of these tokens can actually redeem them for actual gold on a ratio of 1 to 1. Per the Forbes report, citing Guido Buehler, SEBA Bank’s Chief Executive, the new gold token is described as a major “landmark achievement” for the precious metal industry.
“As issuance and custody of the token is managed by a Swiss bank with a banking and securities dealer license, the token platform can be trusted by institutional investors to offer a secure and regulated platform for investment,” he said. “In addition, the custody of the physical gold is with regulated Swiss firms, ensuring that asset security is held paramount for both the digital and physical nature of the product.”
SEBA is a regulated digital asset banking services provider that is known for its highly compliant products. The new gold-backed digital assets also follow this compliance path and can also function as a full-fledged stablecoin like USDT and USDC. While it is not the first to float this kind of product as other players, including Paxos Trust Company had already pioneered the move, SEBA says its gold tokens will brandish additional utilities that will make them worth the hold.
Amongst the potential products in the pipeline include the likelihood of introducing yield earning with the gold stablecoins.
“Investors are looking for exposure to a broad range of assets, including stablecoins, crypto yield products, and tokenized assets,” Buehler said. “SEBA Bank is catering to this demand and opening access to the gold markets for investors in the form of a regulated, cost-effective, and future-proof digital token.”
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