Why Is a Gold-Backed Cryptocurrency So Important Today? – CryptoMode

The worldwide financial system has been scuffling with the consequences of the COVID-19 pandemic and now all the eye turned to the continuing battle between Russia and Ukraine. Kristalina Georgieva, the managing director of the Worldwide Financial Fund (IMF), warned in a speech on the World Financial Discussion board (WEF) in Davos that the financial system confronted the “greatest take a look at for the reason that second world battle.”

The inventory markets are bleeding, the price of residing in Europe is surging, and traders are surrounded by uncertainty, as main central bankers, together with the US Federal Reserve and the European Central Financial institution (ECB), have to deal with the inflationary stress whereas not deepening the potential recession.

For traders, it is a tough interval as a result of it’s exhausting to know which method to go. This is the reason safe-haven belongings are important proper now.

With inflation peak at 8.5% within the US and 9.0% within the UK, nationwide currencies are devaluing in real-time. Buyers want dependable belongings that may protect worth in the long run, and gold has historically been the best choice. In March, the dear steel noticed its worth breaking above $2,000 for the primary time since August 2020, virtually updating the all-time excessive.

Gold can certainly hedge towards any potential hyperinflation, which is why many traders choose to get publicity to it. Nevertheless, each institutional and retail traders put money into gold derivatives (corresponding to futures and choices) given the complexities associated to purchasing and storing bodily gold.

Asia Broadband, Inc. (OTC:AABB) proposes an excellent higher answer by providing a gold-backed cryptocurrency. It combines the advantages of gold – corresponding to preserving worth because of its shortage – with the options of blockchain, together with decentralization and unmatched safety.

Asia Broadband Affords Distinctive Gold-Backed Coin

Final yr, Asia Broadband – a well-established useful resource firm that produces and sells treasured metals to Asian and world markets – launched AABB Gold (AABBG), a cryptocurrency that’s backed by $30 million of its gold bullion. The corporate is working to make its gold stablecoin a worldwide normal of change. The cryptocurrency is gaining belief because of its distinctive mine-to-token vertical integration.

On the token launch in 2021, 5.4 million tokens have been distributed at 0.1 gram of the worth of gold, establishing a worth of about $5.60 for every AABBG token.

To speed up the adoption of its gold-backed stablecoin, Asia Broadband has been constructing a complete ecosystem round it, which incorporates the AABB Pockets and the change platform referred to as AABB Change. The change lists over 400 cryptocurrencies and 80 buying and selling pairs. The corporate is now engaged on a fee gateway referred to as PayAABB. The brand new product, which is anticipated to launch within the upcoming months, will allow retailers worldwide to just accept crypto funds.

Why Is Gold-Backed Crypto Important?

Following the beginning of the COVID-19 pandemic, central bankers have been compelled to chop rates of interest to report lows in an effort to assist funding and consumption. The ensuing low rate of interest setting has prompted traders to hunt yield-generating alternatives elsewhere, such because the rising decentralized finance (DeFi) sector. The rise of DeFi has consolidated the case for digital belongings, and they’re built-in into the normal financial system as nicely, particularly to be used instances like funds, asset administration, and remittances, amongst others.

Stablecoins play a number one function in crypto adoption, as they handle the volatility danger. Nevertheless, the current crash of TerraUSD (UST) – a USD-backed algorithmic stablecoin – has induced turmoil within the crypto market, triggering an enormous selloff, with $1 trillion in combination market cap being worn out in a matter of days.

The shocking collapse of UST highlighted the necessity for stablecoins backed by real-world belongings. USD-backed tokens like USDC and USDT have been capable of maintain their worth near the $1 mark because of their totally different mannequin that depends on reserves consisting of dollar-denominated belongings.

The same method is utilized by AABBG. Nevertheless, in contrast to USDC and USDT, that are pegged to a nationwide forex that’s already devaluing as a result of excessive inflation, AABBG is backed by the scarcest asset on the planet that has handed the take a look at of time.

AABB’s Gold Token is probably the most dependable asset for the crypto world in addition to for conventional finance, which wants stability and financial progress.

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