Digital Gold Coin (DGC)
Whereas digital currencies like Bitcoin are nothing more than lines of computer code that are only valuable due to people’s trust in them, gold and other precious metals have a real tangible value that is the result of their utility. However, digital currencies are of course much easier to trade than physical precious metals. A previous article on this blog about the Glint app (that ultimately failed) has already reported on attempts to combine the advantages of both types of assets by issuing a kind of digital gold currency. The Digital Gold Coin (DGC) that was announced recently will be the next such endeavor that will undoubtedly receive much media hype in the coming weeks and months.
The Digital Gold Coin (DGC) is currently scheduled to make its entry onto the global crypto exchange market this coming October 10th. As a cryptocurrency, it will be under the supervision of the Dubai Multi-Commodities Centre (DMCC). News reports hail this new digital coin as the world’s first gold-backed cryptocurrency that is pegged to gold mine reserves.
According to the recent news announcements, the Digital Gold Coin will also be referred to as the Gold-Backed Coin. The gold mine reserves that the value of the coin will be tied to come from a network of over 95 different gold mines. It has been estimated that these mines will produce a collective output of approximately 3,000 tons of gold during the next ten years. The value of Digital Gold Coins that will be put into circulation during this time is supposed to maintain a 1-to-1 ratio with the real gold value of the mines’ gold production during the respective period.
Whether this will actually work in practice remains to be seen. Regardless of whether the Digital Gold Coin becomes a success story or joins the ranks of similar failed projects like Glint, I think it is fair to assume that more cryptocurrency projects linked to gold and other precious metals will attempt to succeed in the market during the coming years.