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Amadeo Pellicce, Product Manager of Blockchain.com, a leading provider of cryptocurrency and blockchain exploration services, notes that last year they partnered with digital asset firm CoinShares to introduce DGLD, a crypto-asset representing physical allocated gold. which is safely stored in a Swiss vault.
Pellicce says a common request from crypto investors was more ways to access and use DGLD and to also provide an option to store DGLD where they usually store their other crypto assets.
Furry confirmed that Blockchain.com has extended its partnership with CoinShares in order to support the launch of WDGLD (WDGLD), an ERC-20 compliant token that is reportedly ranked 1: 1 with gold. The wrapped token aims to combine “the charm of a gold-backed asset like DGLD – available for trading on the Blockchain.com Exchange – with the accessibility and flexibility of an ERC-20 token that you can use on the Blockchain.com Wallet. or anywhere in the Ethereum network “.
The Blockchain.com team notes:
“With more and more crossovers between gold investors and cryptocurrency investors, we are delighted to offer the opportunity to trade or hold truly digital gold in new and exciting ways. WDGLD is available for trading on the Blockchain.com Exchange today and in the Blockchain. com Wallet on web and mobile. “
As explained in the announcement, DGLD is a digital asset that represents “physical allocated gold stored in a Swiss vault and tokenized with a side chain built on the Bitcoin network”. The release also noted that “in doing so, we enable you to buy gold cost-effectively, 24/7, with the independence of physical ownership of gold.”
Each DGLD token is “the digital equivalent of 1/10 troy ounce of gold, sometimes in Switzerland”. The announcement also mentioned that before the new digital tokens are minted, the gold is first “awarded and placed in the vault”. After depositing the gold, a DGLD is created “representing that specific gold and sent to a DGLD wallet”. According to Blockchain.com, “this simple approach frees physical gold and makes it digitally usable and physically redeemable.”
Wrapped-DGLD (wDGLD) is an ERC-20 compliant token that resides on the Ethereum (ETH) blockchain network. Represents a “unit of DGLD”. It also “lives like a smart contract on the Ethereum network, where all its transactions are verifiable and public”. Users can buy, sell, or trade wDGLD “with any other native cryptographic assets supported in [Blockchain.com’s] Network.”
As explained in July 2020, gold had reached highs over $ 1,900 per troy ounce. At the time, stablecoin broadcaster Tether said that demand for its gold-backed cryptocurrency, XAU ₮, had also increased.
Bitcoin’s (BTC) correlation with gold had weakened in mid-2020, but strengthened relative to the S&P 500 stock market index (as of June 2020). Earlier this year, the Dash Investment Foundation, a supporter of the Dash digital asset, had invested in gold to diversify and strengthen its portfolio.
In May 2020, CoinShares introduced the first gold and cryptocurrency index on Bloomberg and Refinitiv. The company aims to create “investable” reference products. Also in May, institutional and retail investors had at the time looked for gold and Bitcoin (BTC) as alternatives to stocks for their valuations.
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