SAN FRANCISCO (MarketWatch) — Move over, bitcoin! Anthem Vault is getting ready to launch a large-scale digital currency. But this one’s backed by gold.
The new cryptocurrency, which debuts in May, is dubbed the “HayekCoin” after Nobel Prize-wining economist Friedrich Hayek. Anthem Vault’s Chief Executive Officer Anthem Blanchard also claims Hayek as his middle name.
“We think the cryptocurrency community is going to really embrace” the gold-backed digital currency, Blanchard told MarketWatch.
Presently, there isn’t a cap on the number of HayekCoins that will be available, Blanchard said. “The only limitation is the amount of physical gold available on the planet,” he noted.
The launch of the HayekCoin comes after what Blanchard describes as a successful initial run of a prototype known as the “INNCoin” back in July.
Anthem Blanchard, CEO of Anthem Vault, is hoping that HayekCoins are the next big digital currency.
Clients will be able to obtain the new digital currency by first purchasing gold and maintaining it in an Anthem Vault account. The client can then convert the metal in exchange for the digital currency. Each HayekCoin equals one gram of gold GCJ5, -0.05% or roughly $40 per gram of gold at current prices.
The HayekCoin has origins similar to bitcoins, which are created through a cryptographic process that pits computers against each other in a race to solve complicated problems.
Tumultuous and wildly volatile happenings in bitcoin over the past year, however, may raise questions about the safety and security of the HayekCoin.
With bitcoin, price volatility is to be expected, given that its average-daily-trading volume over the past 12 months is only about $50 million a day, said Blanchard.
Gold, on the other hand, has a lot less price volatility with it is liquidity, when including physical spot and derivatives like futures and exchange-traded funds, averaging about $100 billion a day, he said.
“Given gold has a 5,000-year history of humans ascribing value to it and is currently over 2,000 times more liquid” than bitcoin. Blanchard also hopes that offering a gold backing will add “more liquidity and as a result much less price volatility,” to the novel currency.
Ultimately, Blanchard said Anthem Vault hopes to have a more valuable form of gold through the HayekCoin. “It’s going to be the first retail-friendly, digital, spendable gold,” he said.
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