The take-off of digital gold has the potential to disrupt the industry to an unprecedented degree. Historically, gold has been used as a global curren
The take-off of digital gold has the potential to disrupt the industry to an unprecedented degree. Historically, gold has been used as a global currency as a hedge against inflation. It has also been serving as an investment venue (commodities), often preferred over other asset classes like equities or foreign exchange, particularly in conventional markets.
However, there are certain disadvantages to owning physical gold, such as inconvenience in transport and storage, as well as the risk of theft. Gold exchange-traded funds (ETFs) might come across as an alternative option, but it cannot be forgotten that the traders don’t actually own the gold while paying the same taxes as gold bullion, or gold bars, and also investors have to pay an annual fee of around 0.4% to 1%. Gold contains all forms of metal, like coins and bars, whereas bullion includes all the exchangeable physical forms of other precious metals, like silver and platinum.
In contrast, digitized gold stored on blockchain comes across as a robust option. This is what Comtech Gold (CGO) comes in, combining the benefits of gold with the advantages of blockchain. CGO solves the prevailing problems in gold trading by rolling out a 100% gold-backed cryptocurrency.
CGO caters to the needs of individuals as well as corporate investors. It eliminates the need for retail investors to visit local markets to buy gold. Moreover, it makes things better for institutional investors by setting aside any need to store gold in physical form.
Introduction to Comtech Gold
Comtech Gold has added another dimension to gold trading by issuing standardized digital gold backed by 100% physical gold. Built on XinFin XDC Network, an advanced blockchain, the project is also Shariah-compliant and certified by one of the renowned Shariah scholars group in the United Arab Emirates.
Digital gold can be transformed into physical gold anytime, resolving the storage and transfer-related issues associated with gold. The fractionalization of the precious metal makes investment in gold more common.
Holders of CGO tokens own gold physically in the same proportion. Though each holder is entitled to a certain amount of gold, it might not be the specific bars they had submitted. The arrangement works quite like a bank where the bank hands over bills of a certain value as requested by the person withdrawing, but not necessarily the same bills that they had deposited in cash.
Underlying physical gold
Each token on Comtech Gold represents 1 gram of gold with prices hinged to the prevailing international gold rate. The tokens are fully backed by the gold bars identifiable through their bar numbers. These are standardized 1 kg bars of 999.9 purity.
Anyone holding gold-backed tokens is able to convert their tokens to physical 1 kg gold bars. When an investor has gold tokens equivalent to 1 kg (1000 CGO tokens), they can place a request regarding the submission of their tokens for physical 1 kg gold bars.
As the network of Comtech Gold increases, one will be able to buy the tokens and redeem them at the time of their choice in smaller denominations at recognized retailers’ shops.
Sharia compliance
Fully based on Shariah principles, Comtech Gold lays down an ecosystem where physical gold associated with each gold-backed token is identifiable and segregated. As Shariah compliance requires, each transaction will culminate in the actual delivery of tokens from the seller to the buyer. All aspects of the token are completely auditable, right from creation to redemption.
The Shariah certification (Fatwa) was issued by Amanie Advisory Group, an entity specializing in the fields of shariah-compliant investments and Islamic finance solutions. Supported by the guidance from the advisory team, the ComTech Gold Shariah certification was provided after confirming that the structure, mechanism and relevant key legal documentations of Comtech Gold token met all the necessary Shariah requirements.
The certification is in line with Islamic rules and standards defined by the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI).
Vault and storage
The physical bars underlying the gold tokens are stored with Transguard, a globally accepted vault. Under the users’ wallet account, the audit trail is fully complete. Users can use their wallets to view their balance and transfer tokens. All wallets are encrypted, enabling access only to the owner.
Storing gold has always been a pain, whether at home or in a bank due to safety and convenience issues. With Comtech Gold, however, users can store gold in a tokenized form, move around their holdings and even dispose of their investments at will.
Tokenization of physical gold
Gold is a valuable metal, making investments economically infeasible for a large chunk of people. Digitization of gold leads to fractional investment, enabling people to buy as low as 1 gram, thus significantly expanding the horizon for investors. Comtech Gold facilitates the…
cointelegraph.com