Dubai firm launches world's first gold backed digital currency

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OneGram, a Dubai technology firm, has launched the first-ever digital currency backed by gold in an initial offering expected to raise more than $500 million in capital, company chief executive officer Ibrahim Mohammed told Reuters in an interview late on Tuesday.

At the current spot price of gold, a sold-out sale with 12.44 million tokens would bring in about $555 million.

The target capital would be the largest raised through an initial coin sale, Mohammed said. It is also the first coin offering that is fully compliant with Islamic laws. And while the token, called OneGramCoin, is considered an Islamic financial product, its offering is open to all types of investors including non-Muslims, he added.

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https://tribune.com.pk/story/1404279/dubai-firm-launches-worlds-first-gold-backed-digital-currency/
 
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evo

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Interesting approach, but makes sense seeing as OneGram is going after the Islamic markets. From Forbes:
Islamic Markets & Cryptocurrency

Existing cryptocurrencies it should be noted have not been designed with Islamic markets in mind. Despite Muslims making up around 25% of the global population today, many Muslims simply cannot use cryptocurrencies due to their restricted legal status and high barriers to entry in many countries in the Islamic world.

According to OneGram it aims to solve these issues by using blockchain technology to create a “new kind of cryptocurrency”, where each coin is backed by one gram of gold at launch. In terms of the joint venture, the team at OneGram team will manage the OGC protocol while GoldGuard will run the vault for physical gold.

Each transaction of OGC generates a small transaction fee, which is reinvested in more gold (net of administration costs), and thereby increases the amount of gold that backs each OneGram. Therefore, according to the pitch each OGC increases in real value over time, and is touted as “making OneGram unique among cryptocurrencies.”

Gold Investments & Sharia Law

Historically gold investing has been problematic under Sharia law. While there is currently limited guidance for gold coins and bars, there is virtually no guidance on gold elsewhere in the financial sector.

In most cases trading gold futures contracts is forbidden by Islamic law as gold futures contracts are not backed by physical gold and one can end up paying or receiving interest on your trading account. The upshot is that most people who wanted to buy gold as an investment have purchased gold in its physical form through for example coins or jewellery.

New Standard

Things are changing though. Back in December 2016, the Sharia Gold Standard, which OneGram complies with, was introduced by the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI), the World Gold Council and Amanie Advisors.

As a result of this new standard, Muslim investors will now be able to take advantage of an increasing range of gold-backed investment opportunities, which hitherto had been non-compliant.
 
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