Global Gold Cash (GGC), a digital currency that is backed by gold, has added gold reserves valued at $120 billion after their acquisition of a large gold mine situated in Africa. GGC is developed by Goldlinks, a blockchain alliance that operates on the Ethereum blockchain network. GGC tokens are backed up by 0.01 grams of gold, which means that 100 GGC tokens are equivalent to 1g in gold.
Because of the backing against predictable and resilient gold rates, GGC can be used for transactions that aren’t typically allowed with cryptocurrencies, with possible use in countries that have currently placed a ban on cryptocurrency transactions. Goldlinks claims that GGC is the first “gold backed digital currency” that can be used for international trade.
The primary reason why GGC is backed against gold is to avoid the disruptive fluctuations associated with digital cryptocurrency like Bitcoin. Pegging GGC to gold as a stable asset allows its value to be somewhat more regulated.
Goldlink’s technology is largely similar to the Gemini Dollar, another cryptocurrency that is backed by the US dollar.
But tethering Global Gold Cash to gold makes it more stable than other cryptocurrencies, especially at a time when economic recession is feared due to the weakened position of the US dollar.
One recent partnership with a gold mining company added 520 tonnes of gold to Goldlink’s assets. The acquisition will add trust to the value of GGC tokens, act as a good hedge against inflation, and resist currency fluctuations.
GGC is gaining more traction among consumers because it provides faster, convenient, and secure payments.
Solution to the Mining Industry
Goldlinks believes that GGC provides an applicable solution to the mining industry, which is often thrown into chaos whenever the value of gold fluctuates. But in order to make the idea of GGC realistically possible, Goldlinks needs to hold enough gold assets to back up any issued tokens. This is why it is partnering with gold mines to make its vision possible.
Mining is growing difficult for companies because of dwindling reserves, which makes sense to partner with a company like Goldlinks. Mines that are small or medium in size find it more difficult to raise funds compared to larger mines, a problem that Goldlinks aims to solve by issuing Global Gold Tokens (GGT).
Goldlinks can issue GGT to allow users to directly invest in mines, making it easier for smaller mines to access the market. Investors with limited funds also get a chance to invest in mines because Goldlinks connects mine owners and investors by putting out difficult barriers. This allows investors to reap rewards due to returns on equity stakes.
While Goldlinks has yet to become mainstream, the idea of marrying cryptocurrency with an economically stable traditional asset like gold might see future growth. Partnership with mining companies solves problems that were thought to be unsolvable for both investors and mine owners.