Gold and cryptocurrencies are often seen as oil and water by investors — but a new project enables consumers to gain exposure to both asset classes at the same time.
AABBG is a token that is fully backed by gold, and this ensures that the asset’s value is pegged to the current spot price of the precious metal.
This is coupled with a crypto wallet that allows these digital assets to be stored securely, giving users the freedom to effortlessly make transfers to friends, family and businesses.
The project, developed with Core State Holdings, Corp (CSHC), says anonymity is a top priority — and as a result, transactions are invisible to third parties. Passphrases and PIN code protection are also used for added security.
In addition, AABBG says that its infrastructure allows cryptocurrencies to be sent via email, SMS, Facebook Messenger and WhatsApp. This could be crucial as digital assets attempt to secure mainstream adoption by offering a user experience that everyday consumers will be familiar with.
The use cases
According to those behind AABBG, gold has long been regarded as a strong investment — especially during times of economic instability. The same can apply when cryptocurrencies are subject to bouts of volatility.
There are other factors that could make gold-backed cryptocurrencies attractive too. Countries around the world are currently grappling with high levels of inflation, in part down to the rampant money printing that began in response to the coronavirus pandemic.
Gold has cemented its reputation as a hedge against inflation, ensuring that the value of a person’s capital isn’t diminished — a stark contrast to bank accounts, where spending power is gradually eroded because of low interest rates.
AABBG is the brainchild of Asia Broadband, Inc (OTC:AABB). The resource company is predominantly focused on the production, supply and sale of precious and base metals — and at present, it mainly operates in Asian markets.
Some analysts are exceedingly bullish on gold at present. A number of U.S. investment banks have expressed confidence that we could see prices hit $2,300 to $2,400 per Troy ounce — a marked improvement from the price of $1,823 at the time this article was being written. AABBG aims to deliver the transferability, security and transparency of a regular crypto token while eliminating volatility.
Gold vs crypto
There are impassioned voices on both sides of the gold versus crypto debate. Some argue that precious metals have delivered a rather lackluster performance in recent months when compared with digital assets such as Bitcoin and Ether. But gold bugs often shoot back — pointing out that it has cemented its reputation over hundreds of years, whereas cryptocurrencies have barely existed for a decade.
A number of experts also stress that investors should only allocate a small percentage of their overall portfolio to crypto — as little as 5% in some cases. This means that they should still be able to experience a benefit if prices rise, while minimizing the impact on their position if prices fall.
The introduction of tokens such as AABBG could create a “have your cake and eat it” approach — meaning that investors can dedicate a greater proportion of their holdings to assets that serve as a hedge against inflation, without worrying about volatility.
In January, Asia Broadband sold its main mining operation in order to bank a large quantity of gold bullion — raising $82 million in the process. This is being used to ensure that the AABBG token is 100% backed.
Looking ahead to the next 12 months, Asia Broadband is planning to open a satellite office in El Salvador — ensuring that it has a presence in the country now that it is establishing Bitcoin as legal tender, elevating it to the same status as the U.S. dollar. As worlds of fiat and crypto come closer, the divide between crypto and commodities is narrowing now too.
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