10 reasons why DGX is a better form of gold
Demand for gold is rising on a global scale. Here are why digital gold is the better form of gold.
1. Gold is on the rise globally against the backdrop of economic and geopolitical uncertainty.
Against a global backdrop of deteriorating trade relations between the United States and China, as well as Brexit, climate disasters, health scares, and Hong Kong’s ongoing political situation, 70% of American economists are predicting a US recession by 2021, while the United Nations has estimated that there may be a global recession this year. This has caused panic amongst investors globally, prompting them to search for asset classes uncorrelated with traditional markets. Gold stands out as an obvious choice due to its safe-haven status — and jumped 20% in 2019 as a result of economic and geopolitical uncertainty leading investors to diversify their portfolios.
That said, gold is often seen as a white elephant investment. Its lack of utility and high associated costs make it unattractive in times of growth in other markets.
2. Traditionally, gold has not been viewed as a means of payment or currency, but it will be.
While gold was used as a means of exchange in the past, fiat has changed the way it is perceived by consumers. Although fiat can experience short-term volatility as the result of consumer confidence and is subject to value fluctuations in the long term as the result of inflation. The effects of inflation are easy to ignore as consumers see the nominal value of fiat as opposed to its “real value” (purchasing power), which diminishes over time.
Gold, on the other hand, is often viewed as an investment tool with daily price fluctuations, despite the fact that it is more stable than fiat in the long term. Due to a lack of consumer awareness gold is rarely seen as a means of payment. Digital gold, however, is more stable than fiat and has the potential to be used as an investment tool and form of payment method.
3. In Southeast Asia, gold has deep-rooted value and history and there is a major resurgence in ASEAN.
As demand for gold rises globally, few regions showcase the potential of the gold market as much as Southeast Asia. Gold consumption in the 10 ASEAN countries reached 309 tonnes in 2018, making it the third-largest market for gold globally, after China and India. Demand is especially strong in Indonesia, Thailand, and Vietnam — which together account for over 80% of SEA’s gold market.
Several trends have underpinned market growth in the region, including retail investors’ concern about the outlook for their respective local currencies. Meanwhile, investors have been unnerved by equity market volatility, as well as by ongoing political and economic uncertainty throughout the region.
In addition to these macroeconomic trends, gold enjoys a rich cultural and traditional importance in Asia — as a sign of social standing, affluence, and beauty. As a result, jewellery, bullion, and coins are prized as a means of saving and gifting, and for their ornamental and decorative value, throughout the region.
4. The region is home to one of the fastest rates of digital payments adoption — cryptocurrencies and non-traditional payments feature prominently.
Simultaneously, Southeast Asia is embracing the future of finance, with 61% of Southeast Asian consumers now choosing card over cash. Meanwhile, the adoption of digital payments in the region continues to rise and is forecast to grow to more than $1 trillion USD by 2025. The region is slowly introducing alternative financial payments with growing numbers of merchants accepting cryptocurrency and non-traditional payments.
Although digital assets are making their way into mainstream adoption, consumers remain cautious. Digital assets are viewed as volatile and high risk by the general public. However, their legitimacy has been strengthened by support from government authorities such as the Monetary Authority of Singapore (MAS) and Thailand’s Securities and Exchange Commission (SEC).
5. While there is still demand for traditional investments, there is an increased need for them to evolve if they are to attract modern consumers.
Today, whether it’s paying a bill with a touch of your finger or buying a coffee with a tap of your watch, innovations in finance have transformed the way we spend, send, and invest — making these daily transactions easier and more convenient than ever. Despite these developments, recent gold spikes showcase that there is still a place for traditional assets and investments in a digital world. However conventional methods of purchasing, securing, and storing gold do not meet the demands or expectations of modern investors.
This is where Digix comes in, bridging the world of traditional assets with modern-day investments and innovations. Digital gold provides the utility, liquidity, and fungibility to gold which it previously lacked.
6. Digital gold is providing users with a better form of money that is fit for a digital age,
Digital gold overcome conventional issues of inconvenience, security, and insurance to present greater utility and liquidity to holders. Digix’s DGX represents 1g of 99.99% investment-grade gold bullions. It is a new, better form of gold — one fit for a digital age, unlocking new potential for gold to serve as an accessible investment vehicle and a means of exchange which is backed by stable and enduring value.
- Digital gold overcomes issues of divisibility, convenience, and safety related to traditional bullion which have limited its appeal to investors. Digix eliminates the inconvenience and security issues associated with storing, carrying, trading, and spending gold. Tradeable online, DGX makes paying with gold as easy as using a credit card, giving gold greater utility and liquidity.
- Digital gold tokens also open up the bullion market to far greater liquidity than they have previously enjoyed, with DGX tradeable on 12 partnered exchanges.
- Gold dealers and traders can benefit from digital gold as it uses blockchain technology to record ownership. Blockchain’s immutable ledger is more impervious to hacking and tampering than any alternative database — meaning that dealerships and their clientele are safer with DGX than with traditional gold.
7. Save easily with the world’s most time-tested asset class.
Gold is often more stable than emerging economies’ fiat currencies and free from the risks of hyperinflation or political instability. With complete online onboarding and mobile accessibility, Digix opens up new possibilities to earn, save, trade, and even lend for some of the world’s most vulnerable people — all with the benefits of a deflationary asset class and the immutable nature of blockchain technology.
Digix mitigates the fees associated with entry, custody, and security associated with gold, and overcomes the lack of familiarity which retail investors may have with acquiring precious metals or diversifying their wealth.
Digix charges no maintenance fee for storage, setting itself apart from custodians and precious metal dealers who charge high premium to secure customer holdings. With the option of buying gold by the gram, Digix allows anyone, no matter their purchasing power, to convert their savings into the world’s most time-tested asset class.
8. Everyone has access to gold through DGX.
Digix believes everyone should have the right to purchase and own gold. Due to the cost traditionally associated with purchasing gold, it has historically been the exclusive domain of financial institutions and high-net-worth-individuals. Accessible to anyone with an internet connection and a smartphone, Digix reduces the barriers to entry to the gold market and democratises access for those previously excluded from it.
This accessibility to gold markets is nowhere more impactful than in emerging economies — where mobile penetration has surpassed financial inclusion and the cultural and economic value of gold are most tangible. Reports show that 73% of the population of Southeast Asia and 20% in China and India are currently unbanked, lacking access to financial services. In a modern economy, this can prove debilitating to living a comfortable, modern lifestyle and may propagate cycles of poverty.
9. DGX is not paper gold. It is backed by physical gold, trusted with the transparency, security, and traceability of blockchain.
Gold is an eternal symbol of trust, a familiar investment with value that can be seen and easily understood. With the transition from physical to digital gold, it’s natural that questions and concerns arise around trust, assurance, and security.
The transparency, security, and traceability of blockchain ensures that DGX tokens can be transacted and transferred with full visibility and auditability. The immutable ledger heightens security while the smart contract platform is automated, eliminating any possible human error and risk of fraud that is present in the traditional gold supply chain.
Digix suppliers and custodians are accredited members of local and international bullion market associations, such as Brink’s Singapore, Brink’s Calgary, and The Safe House SG. Quarterly audits are carried out by Inspectorate of Bureau Veritas, a highly recognised and reputable precious metals audit firm. All Digix gold reserves are stored in institutional-grade vaults in Singapore and Canada.
10.Digital gold bridges the worlds of traditional finance, investments, and emerging technologies.
As the region develops a new global economic architecture based on mobile and digital-first systems, a new type of currency is needed.
Digix bridges the world of traditional assets with modern-day investments and makes gold more accessible to everyone.
The Digix team is uniquely positioned to bridge the worlds of traditional finance, investments, and emerging technologies.
Before founding Digix in 2014, CEO Kai C. Chng was an EMFX trader on Wall Street while Shaun Djie, COO worked as a gold trader against the Chicago Mercantile Exchange. Digix CTO, Anthony Eufemio, led security and software development efforts within a number of Wall Street firms.
While the three firmly believed in the potential of cryptocurrencies, they felt additional stability was required for real mainstream and institutional adoption of digital assets — and so, a gold-back alternative was launched. Out of their commitment to cryptocurrencies and blockchain,the team founded the Ethereum Singapore meetup group, to educate consumers on this new technology. The group now has more than 8,000 members. As blockchain development rapidly evolves so too do its many applications, gaining interest from institutions, enterprises, and even governments. Kai C was invited to the EU parliament in Brussels to discuss token classifications for smarter regulation in Europe.
We believe that the value of gold should be accessible to everyone. By bringing the value of gold into the digital realm, Digix presents consumers and investors with better money that is fit for a digital age.
Digix, incorporated in Singapore in 2014, is the blockchain company behind the world’s first gold-backed digital asset class. Digix uses blockchain to account for the authentication and provenance of 99.99% investment-grade gold bullions. Physical gold bars are registered on the blockchain, and every 1 gram of physical gold registered is pegged to 1 DGX token. The physical gold bars are kept in vaults located in Singapore and Canada.
Digix recently won the 2020 S&P Global Platts: Precious Metals Industry Leadership Award and was a finalist in the 2016 Singapore MAS Fintech Awards.
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