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Gold has been one of the world’s most valuable commodities for centuries, increasing steadily over time. In addition, gold has no direct correlation with other asset classes, making it less susceptible to the whims of the market and, consequently, a smart investment hedge against inflation or economic uncertainties. These attributes are causing gold-backed cryptocurrencies to gain popularity in recent years.
The massive jump in market capitalization regarding gold-pegged coins, whose value is directly linked to the price of physical gold, reflects investors’ confidence in the union of gold and crypto. Early this year, stablecoins backed by gold collectively reached over USD1 billion in market cap for the first time in history, representing a 60 percent growth.
“As more people understand the value of cryptocurrencies, combined with the long history of gold as a safe-haven asset, it will only be a matter of time before gold-backed cryptocurrencies become widely adopted,” said Deven Soni, CEO of Matador Gold Technologies. “In times of economic uncertainty, gold is known to be a safe investment and a secure way to preserve wealth. With gold-backed cryptocurrencies, more people will now easily access gold as a tool to protect their assets.”
As a borderless and decentralized asset, gold-backed cryptocurrency offers a much easier and seamless onboarding process for anyone around the world to invest in gold and digital coins. Moreover, gold-backed stablecoins remain safe investments despite growing geopolitical tension and high inflation, making them a compelling asset for any investor.
Many governments recognize and are exploring the potential of cryptocurrencies to help combat inflation, reduce the risk of fraud, or as a form of investment for the masses. Countries belonging to the BRICS group of nations – Brazil, Russia, India, China, and South Africa – are planning to create a new reserve digital currency, with Russia and China, in particular, reported to be developing a new gold-backed currency that could challenge the US dollar.
With the global economy becoming increasingly digital, demand for cryptocurrency for everyday transactions could surge. In this regard, gold-backed cryptocurrency offers a more secure and safer platform than other types of cryptocurrencies, as gold backing provides a level of security that no other asset can match.
The value of a gold-backed cryptocurrency is bolstered by the credibility of the company that issued it. A reputable company that owns the gold and is responsible for the sustainable mining of gold offers investors an extra layer of confidence.
Zambesi Gold (ZGD) is a coin that ticks all the boxes for fastidious crypto investors looking for a safe and stable investment. ZGD is created by Zambesi Gold (Pty) Ltd, a mining company run by professionals with over 40 years of experience in the mining industry. The company’s gold mining operations deposit a fresh supply of gold into the Zambesi vault each month, increasing the amount of gold each token represents.
The Zambesi Gold standard is a monetary system supported by the auditable production of real gold. In addition, ZGD implements smart contracts on the blockchain, making transactions tamper-proof, transparent, and automated. The company also provides access to a high-earning staking system, creating more value for users who can enjoy up to 6 percent returns on the staked amount while a mechanism is in place to ensure all tokens received from users withdrawing investments are burned. This system helps drive the value of the token higher.
With a complete ecosystem that enhances the token’s value and supports responsible mining operations, Zambesi Gold has amassed solid growth in a short span of time, within just three months of the token’s launch.
Although the concept of gold-backed cryptocurrencies is still new, Zambesi Gold is now providing a blueprint of what the future holds for gold-backed stablecoins with a clear roadmap that ensures the business’s profitability and its investors.