Page 26 - Bullion World Volume 4 Issue 7 January 2024
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Bullion World | Volume 4 | Issue 7 | July 2024



                                 Gold as a Product



                        for Tokenization: Part-1





                            Mr Arjun Khazanchi, CEO and Co-Founder, Rooba Finance





                                                              The Attributes of a Good Store of Value
                                                              When considering gold as a product for tokenization, it
                                                              is essential to understand the attributes that make it a
                                                              superior store of value. Historically, many goods have
                                                              been used as stores of value, but certain attributes have
                                                              allowed gold to outcompete others:
                                                              1.  Durable: Gold is not perishable and does not
                                                                 degrade over time, making it an ideal store of value.
                                                              2.  Portable: Gold is easy to transport and store,
                                                                 facilitating long-distance trade and security against
                                                                 loss or theft.
                                                              3.  Fungible: One piece of gold is interchangeable
                                                                 with another of equal weight and purity, solving the
                                                                 coincidence of wants problem.
                                                              4.  Verifiable: Gold can be quickly and easily
                                                                 authenticated, increasing confidence in trade.
                                                              5.  Divisible: Gold can be subdivided into smaller
                                                                 units without losing value, important for precise
                                                                 transactions.
                                                              6.  Scarce: Gold is difficult to obtain and produce in
                                                                 large quantities, tapping into the human desire for
                                                                 rarity.
                        Mr Arjun Khazanchi
                                                              7.  Established History: Gold has been perceived as
                                                                 valuable for millennia, making it hard to displace.
                                                              8.  Censorship-Resistant: Modern digital gold
                                                                 solutions can be designed to resist external
                                                                 interference, appealing to those under restrictive
           Historical Context and                                regimes.
           Attributes of Gold
                                                              These attributes make gold not only a traditional store
                                                              of value but also a promising candidate for digital
           Introduction: The Historical Significance of Gold  tokenization.
           Gold has been a symbol of wealth and a medium of

           exchange for centuries. From ancient Egypt, where
           it was mined and crafted into jewelry and currency,   Challenges in Traditional Gold
           to its current status as a globally traded commodity,   Investments and the Need for
           gold's history is rich and varied. The modern gold   Change
           market operates on a global scale, with major hubs like
           the London Bullion Market Association (LBMA), the   Challenges in Traditional Gold Investments
           Shanghai Gold Exchange, and the New York Mercantile   While gold has long been a reliable store of wealth,
           Exchange facilitating its trade.
                                                              traditional gold investments come with several

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