Gold-Backed Digital Currency Ditches the Blockchain

There is another development in the fast moving digital currency world. A new digital currency backed by gold is presenting itself as a more reliable and liquid store of value than decentralized money systems such as bitcoin: COEPTIS.

COEPTIS has been beta testing its digital currency platform for two months and will soon be expanding its membership to the invitation-only platform. It issues its own digital currency, calling it Global Standard Gold (AUG), which is backed by physical gold and held in a trust account. The digital currency is issued after a licensed financial institution, acting similarly to a primary dealer, acquires the gold on the open market and deposits it in the trust. The institution then notifies COEPTIS, which issues the proprietary currency.

The currency is meant to bridge the gap between physical and digital currencies. Because it is backed by gold and held in a trust, in theory it can be liquidated at market value at any time.

COEPTIS is primarily targeting gold enthusiasts who are looking for liquidity. Its digital nature allows for the potential to process payments more efficiently, which could eventually appeal to online merchants and banks.

Many cyptocurrencies such as bitcoin use a decentralized system, but COEPTIS uses a centralized one. While a decentralized currency avoids the potential for a single point of failure, COEPTIS claims a centralized one makes it more efficient and cheaper to operate.

“We have looked at the cost of running the blockchain in terms of how much money is invested” and “we are at orders of magnitude less expensive” if COEPTIS eventually achieves the scale of bitcoin, said Bill Cunningham, chief executive officer of COEPTIS.

Unlike many alternatives, COEPTIS also offers a collateral-backed currency.

 

Source: AmericanBanker.com (read more)

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