Among the biggest problems with cryptocurrencies is the fact that they are not backed by any hard asset. They are simply digital creations floating in cyberspace, entirely dependent upon enough people maintaining the belief that they are worth something.
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Real estate mogul Kent Swig recognized that shortcoming after learning about cryptocurrencies from his teenage son. So, he decided to turn to the ultimate hard asset—gold—to create a digital currency that is backed by real value. Swig, owner of the New York real estate brokerage firm Brown Harris Stevens, has secured a minimum of $6 billion in gold reserves to back his new cybercurrency, called DIGau.
“Gold was one of the original rock-solid backings of all currencies,” Swig told Bloomberg News. “We’re not reinventing the wheel here. What we’re doing is applying the world’s stable backing of a lot of things to a very advanced technology.”
Swig’s new company, Dignity Corporation, is issuing digital tokens backed by at least $6 billion in gold reserves, equivalent to more than 3.4 million ounces that will be mined in Nevada and Arizona. Arrangements for the new digital currency include a pledge to maintain the $6 billion worth of gold reserves. If the price of gold decreases, additional ounces will be pledged to back the token, according to the company.
Dignity Corporation plans to issue 3 billion digital “security tokens” once it completes U.S. regulatory compliance requirements.
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