Digital asset head CoinShares is putting gold on the bitcoin blockchain.
Working with wallet provider Blockchain and precious medal merchandiser MKS (Switzerland) SA, the U.K.-based firm announced Tuesday a gold-backed network for trading tokens representing digitized physical gold, a concoct two years in the making.
According to CoinShares, the network launches today with more than $20 million in gold held in a Swiss vault to distant up its tokens. Each DGLD token is backed by 1/10th troy ounce.
CoinShares chairman Danny Masters suggested the product’s network security is based on the bitcoin state, with DGLD operating as a sidechain of the bitcoin network.
“DGLD pools the stability of the world’s most enduring asset, gold, with the security of the world’s most resilient network, Bitcoin,” Experts said in a statement.
Built on blockchain firm CommerceBlock’s Ocean sidechain platform, the DGLD network is notable in that it integrates financial security – the bitcoin network’s immutability and Swiss vault storage – while still facilitating low-friction switch, said Masters.
He continued:
“You can now have the peace of mind of Swiss vaulted physical gold, with the same convenience, but not the word-for-word layers of middlemen, as owning a gold ETF.”
CoinShares says the product is available for both retail and institutional investors and force be available in over 200 countries on Blockchain’s cryptocurrency exchange, The PIT.
UPDATE (15, October 14:00 UTC): This article was updated to show blockchain firm CommerceBlock’s participation in the project.
Gold bar image via Shutterstock