Economy
Tether Gold to Hedge Against Inflation, Currency Depreciation
By Adedapo Adesanya
The rampant currency depreciation witnessed across many emerging markets has intensified the case for decentralized cryptocurrencies like Bitcoin (BTC) and USDC as stores of value or hedging assets.
However, gold, as the most valuable asset in the world, remains highly sought after as a hedge against inflation and a store of value through market ups and downs, and this has spurred the introduction of Tether Gold.
Tether Gold (XAUT) is a digital asset that is pegged to the value of gold. Each unit of Tether Gold is linked to the price of one troy ounce of physical gold, which is stored in a vault.
Launched in 2020 by TG Commodities Limited, Tether Gold (XAU₮) is a stablecoin that provides ownership on a 1:1 basis of one fine troy ounce of gold on a physical bar of gold that meets the Good Delivery standard of the London Bullion Market Association (LBMA).
According to Tether Gold, this technology allows access to a stablecoin that provides ownership of physical gold while avoiding the drawbacks associated with physical gold, such as high storage costs and limited accessibility.
“Holders of XAUT obtain the combined benefits of both physical and digital assets. XAUT token holders will be able to enjoy ownership of gold while avoiding drawbacks associated with physical gold, such as high storage costs and limited accessibility.
“Unlike fiat paper currency, coins, or other assets, gold has maintained its value throughout the ages. People see gold as a way to pass on and preserve their wealth from one generation to the next.”
In an interview, Tether’s Chief Technology Officer, Mr Paolo Ardoino, added that gold is an excellent hedge against inflation because its price tends to rise when the cost-of-living increases. In this unprecedented time in which central banks print more money than ever, gold is a great choice to store your wealth because of its scarcity.
According to Tether, putting gold on a blockchain unlocks a variety of characteristics that typically only crypto assets possess:
Tether Gold tokens provide undivided ownership rights to gold on the specified gold bar(s). the allocated gold is identifiable with a unique serial number, purity, and weight, so the XAU₮ holders can easily check the details of the gold bars associated with their address.
Owning physical assets on the blockchain provides you with the combined benefits of both physical and digital assets. As a XAUt token holder, users will be able to enjoy ownership of gold while avoiding drawbacks associated with physical gold, such as high storage costs and limited accessibility.
Another advantage is the constant availability of a digital token. Tether Gold tokens are available on markets operating 24 hours a day, seven days a week. It means that when the traditional markets for gold are closed, it’s still possible to buy or sell Tether Gold tokens.
With Tether Gold tokens, users have the possibility to redeem them for physical gold or USD fiat currency.
One of the main advantages of Tether Gold is that it provides investors with exposure to gold without the need for physical ownership. This means that investors do not have to worry about the storage and insurance of the metal, which can be costly and cumbersome.
Second, the cryptocurrency is an ERC-20 token, meaning it can be moved easily on the Ethereum blockchain and transferred to different addresses. Tether Gold holders have ownership rights to specific physical bars and can identify the details with a unique serial number. They can even redeem their tokens for the real thing by going through a verification process.
“The holder’s physical gold can be delivered to a location of their choice in Switzerland, or the holder can request that TG Commodities Limited attempt to sell the gold and receive the cash proceeds from that sale.”
Compared to other crypto assets, Tether Gold is also a stable investment tool, which means that it is less volatile than other digital assets that are not backed by any underlying assets.
As such, Tether Gold provides investors with a way to diversify their portfolio by adding an asset that has traditionally been considered a safe haven. Gold has historically been viewed as a reliable store of value, and Tether Gold allows investors to combine the security of gold with the convenience and accessibility of a digital asset.
By Adedapo Adesanya
Food Concepts Plc neutralized the gains recorded by three securities, returning the NASD Over-the-Counter (OTC) Securities Exchange into the negative territory with a 0.27 per cent loss on Thursday, December 4.
Yesterday, the share price of the parent company of Chicken Republic and PieXpress declined by 34 Kobo to sell at N3.15 per unit compared with the previous day’s N3.49 per unit.
This shrank the market capitalisation of the OTC bourse by N5.72 billion to N2.136 billion from N2.142 trillion and weakened the NASD Unlisted Security Index (NSI) by 9.57 points to 3,571.53 points from 3,581.10 points.
Business Post reports that Central Securities Clearing System (CSCS) Plc went down by 50 Kobo to N38.50 per share from N38.00 per share, FrieslandCampina Wamco Nigeria Plc gained 29 Kobo to sell at N55.79 per unit versus N55.50 per unit, and Geo-Fluids Plc added 5 Kobo to close at N4.60 per share compared with Wednesday’s closing price of N4.55 per share.
Trading data indicated that the volume of securities recorded at the session surged by 6,885.3 per cent to 4.3 million units from the 61,570 units posted a day earlier, the value of securities increased by 10,301.7 per cent to N947.2 million from N3.3 million, and the number of deals went up by 146.7 per cent to 37 deals from the 15 deals achieved in the previous trading session.
At the close of business, Infrastructure Credit Guarantee Company (InfraCredit) Plc was the most traded stock by value on a year-to-date basis with the sale of 5.8 billion units for N16.4 billion, trailed by Okitipupa Plc with 170.4 million units worth N8.0 billion, and Air Liquide Plc with 507.5 million units valued at N4.2 billion.
InfraCredit Plc also finished the session as the most traded stock by volume on a year-to-date basis with 5.8 billion units transacted for N16.4 billion, followed by Industrial and General Insurance (IGI) Plc with 1.2 billion units sold for N420.2 million, and Impresit Bakolori Plc with 536.9 million units traded for N524.9 million.
By Dipo Olowookere
The upward trend witnessed at the Nigerian Exchange (NGX) Limited in recent sessions continued on Thursday as it further improved by 0.10 per cent.
This was despite investor sentiment turning bearish after the local equity market ended with 23 price gainers and 28 price gainers, indicating a negative market breadth index.
UAC Nigeria gained 10.00 per cent to finish at N88.00, Morison Industries appreciated by 9.94 per cent to N3.54, Ecobank rose by 8.53 per cent to N36.90, and Coronation Insurance grew by 8.47 per cent to N2.56.
On the flip side, Ellah Lakes depreciated by 10.00 per cent to N13.14, Eunisell Nigeria also shed 10.00 per cent to finish at N72.90, Transcorp Hotels slipped by 9.95 per cent to N157.50, Omatek shrank by 9.23 per cent to N1.18, and Guinea Insurance dipped by 8.46 per cent to N1.19.
Yesterday, the All-Share Index (ASI) went up by 152.28 points to 145,476.15 points from 145,323.87 points and the market capitalisation chalked up N97 billion to finish at N92.726 trillion compared with the previous day’s N92.629 trillion.
Customs Street was bubbling with activities on Thursday, though the trading volume and value slightly went down, according to data.
A total of 1.9 billion stocks worth N19.2 billion exchanged hands in 23,369 deals during the session versus the N2.3 billion valued at N21.0 billion traded in 21,513 deals a day earlier.
This showed that the number of deals increased by 8.63 per cent, the volume of transactions depleted by 17.39 per cent, and the value of trades decreased by 8.57 per cent.
For another trading day, eTranzact led the activity chart with 1.6 billion units sold for N6.4 billion, Fidelity Bank traded 31.0 million units worth N589.3 million, GTCO exchanged 28.3 million units valued at N2.5 billion, Zenith Bank transacted 27.1 million units for N1.6 billion, and Ecobank traded 21.9 million units worth N744.3 million.
By Adedapo Adesanya
The Naira marginally depreciated against the United States Dollar in the Nigerian Autonomous Foreign Exchange Market (NAFEM) on Thursday, December 4 amid renewed forex pressure associated with December.
At the official market yesterday, the Nigerian currency lost 0.01 per cent or 18 Kobo against the Dollar to close at N1,447.83/$1 compared with the previous day’s N1,447.65/$1.
It was not a different scenario with the local currency in the same market segment against the Pound Sterling as it further shed N15.43 to sell for N1,930.97/£1 versus Wednesday’s closing price of N1,925.08/£1 and declined against the Euro by 20 Kobo to finish at N1,688.74/€1 compared with the preceding session’s N1,688.54/€1.
Similarly, the Nigerian Naira lost N5 against the greenback in the black market to quote at N1,465/$1 compared with the previous day’s value of N1,460/$1 but closed flat against the Dollar at the GTBank FX counter at N1,453/$1.
Fluctuations in trading range is expected to continue during the festive season as traders expect the Nigerian currency to be stable, supported by intervention s by to the Central Bank of Nigeria (CBN)in the face of steady dollar demand.
Support is also expected in coming weeks as seasonal activities, particularly the stylised “Detty December” festivities, will see inflows that will give the Naira a boost after it depreciated mildly last month, according to a new report.
“As the festive Detty December season intensifies, inbound travel, tourism spending, and diaspora inflows are expected to provide moderate support for FX liquidity,” analysts at the research unit of FMDA said in its latest monthly report for November.
Traders cited by Reuters expect that the Naira will trade within a band of N1,443-N1,450 next week, buoyed by improved FX interventions by the apex bank.
Meanwhile, the crypto market was down as the US Federal Reserve’s preferred inflation gauge, core PCE, likely rose in September—moving in the wrong direction. However, volatility indices show no signs of major turbulence.
If the actual figure matches estimates, it would mark 55 straight months of inflation above the US central bank’s 2 per cent target. The sticky inflation would strengthen the hawkish policymakers, who are in favour of slower rate cuts.
Ripple (XRP) depreciated by 4.5 per cent to $2.08, Solana (SOL) went down by 3.8 per cent to $138.11, Litecoin (LTC) shrank by 3.1 per cent to $83.23, Dogecoin (DOGE) slid by 2.5 per cent to $0.1463, Cardano (ADA) declined by 2.1 per cent to $0.4368, Bitcoin (BTC) fell by 0.9 per cent to $91,975.45, Binance Coin (BNB) crumbled by 0.9 per cent to $899.41, and Ethereum (ETH) dropped by 0.7 per cent to $3,156.44, while the US Dollar Tether (USDT) and the US Dollar Coin (USDC) closed flat at $1.00 apiece.
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