The economic and financial worlds are constantly changing with the introduction of new investment tools and assets. Since the inception of bitcoin, the global financial systems are experiencing a transition. As the crypto market thrives, also the scammers and hackers do arise. To shield investors from being robbed, rules and regulations are coming up with security tokens also gaining ground in the new market.
Traditional diamond trading is quite complicated and challenging to the non-experts. However, the SwissDiamondCoin eliminates all complexities since it was developed with the investors in mind.
During the interview on CNN Money Switzerland, Dr. Mathias Bucher, the founder of ABC Platform, the company behind this new token, believes that anchoring tokens with diamond will revolutionize how investors set up their portfolios with digital assets.
Can Diamonds Play an Integral Role?
The diamond pricing model is not anchored on USD but instead, it summarizes the intrinsic characteristic of every diamond on the CHD value scale. The USD value of a CHD is known to fluctuate with the prevailing market price subject to the underlying diamonds. From a macroeconomic point of view, it is currently the best time to include real asset commodities in the investment portfolios.
The stock and bond markets are currently near the all-time high levels. After the aggressive actions by central banks in money printing, it has reached a point where the typical hedge nature of bonds and equities does not work anymore. Countries are turning to hike the rates to stabilize their economies eventually discouraging investors to participate in investment opportunities.
To complement the traditional bonds and stocks portfolios, diamonds can play an integral role. The investment diamonds have a certain size and extremely pure inside and they have appreciated in value consistently over a long period of time.
Is Set to Reshape the Stablecoins’ Market
Currently, the diamond market is for experts only, however, with the SwissDiamondCoin is revolutionizing investment diamonds as an institutional asset class for excellent inflation hedging, portfolio diversification, and as a cash alternative.
The token is available for purchase by qualified investors since February 21 but will be available for retail in the second quarter of 2019. The new coin is set to reshape the stablecoins’ market since it is pegged on something real and stable that has proven its worth over a long time.
Diversification and Stability
The new coin will provide liquidity to investors. Traditionally, you could buy diamonds and add them to your portfolio. However, when it comes to selling, challenges arise with too many fees and extensive discounts involved resulting in loss of considerable amounts. With the coin, investors can sell fractions of their diamond portfolio within the liquidity pool of the entire crypto market.
The SwissDiamondCoin provides stability to the investors’ diversified portfolios amidst the turbulent markets. Despite these potentials, the stablecoins face opposition from various ends with Luzius Meisser stating that they do not have viable practical utility but instead operate as financial instruments that will lack wide adoption as transactional currencies.
The actual structuring of this token is as a proper currency and not as a security making it a viable replacement of cash transactions and may also be added to any portfolio. With the open-source pricing model, the coin will add total transparency in the asset class. All CHDs are based on top-quality diamonds that are independently certified, graded, insured, and stored in a high-security Swiss Freeport vault.
The investors can also exchange their digital currencies against the physical diamonds they are anchored on, as opposed to fractional ownership or basket investment vehicles. The Liechtenstein-based non-profit, public-benefit SwissDiamondCoin Foundation is the sole issuer of all CHD on the blockchain. The foundation coordinates all service providers while simultaneously ring-fencing the diamond asset base.
The coin has fulfilled all the Know-Your-Customer (KYC) and Anti-Money-Laundering (AML) compliance regulations. Also, they have partnered with Consensys’ uPort to create an innovative KYC/AML app. Thus, the institutional investors can now readily embrace diamonds as a brand new and also uncorrelated asset class.