The Krugerrands Getting Tokenised
South Africa a former British colony used to be on the Pound standard, after shipping the Brits home and declaring independence, they launched a national currency, the South African Rand. Since its launch back in 1961, the Rand has continued to lose value like all fiat currencies, just at a faster rate than the G7 currencies.
As people in South Africa net nothing for their savings, the JSE the local stock market is pretty much a joke most investors have pilled into shitcoins, Real estate, and gold. People like it because it's tangible, you can hold it, you can see it but as a store of value, it's only marginally better than your Rands.
As the Rand continues to slip, the ability for the average South African to hold a 1KG bar of gold is long gone, the ounce too, which is why gold coins have become so popular. The kruggerrand is South Africa's premier coin, it's available in both gold and silver and while it's kept its value over time, what makes it attractive is people can still save up to buy one.
Unit bias is a real bitch.
But as the Rand shows no sign of slowing its decline we're seeing people priced out of ownership of a kruggerrand too. So what has the market come up with? Tokenising the claims on a coin and breaking it up into pieces you can "own" or rather lay claim to and resell in the future.
It's effectively a derivative built on top of the kruggerrand to try and encourage smaller buyers to get in and build up a stake in the gold market.
Once a user hits the tokenised value of an entire kruggerrand from buying all these "kruggerbits" they can call in the claim and self custody a real coin.
Image source: - learnaboutgold.com
Long live the satoshis
If you're considering what they're doing here as valuable, and people are buying into it, then you have to accept that the satoshi is a superior product to this, since you can buy and self custody any amount of satoshis as you like or even mine small amounts of satoshis.
To me, this isn't bullish for gold but shows gold weakness and how bitcoins' divisibility and ability to re-assemble as UTXOs make it a far better option for those looking to save on the lower end of the economic ladder.
Products like these are all training wheels that get people into the idea of owning a digital commodity and once they realise the fatal flaw of this tact on system, they can move on to the real ting and eliminate all third party custody risk
Sources:
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Dear @chekohler,
I first heard of Krugerrands. Are the Krugerrands a coin created by South Africa to protect the value of its fiat currency?
Do you think the Krugerrands is a currency that can replace the shaky reliability of gold and the US dollar?
I wonder what kind of profit an East Asian person like me will get if they buy Krugerrands!
No kruggarrands are just a collectable coin thats all
Currently, China and Japan are trying to increase the international value and credibility of their fiat currencies in order to escape the domination of the US dollar.
I read your article and guessed that China and Japan are likely to make coins like Krugerrands.
Do you claim that the Krugerrands were created to escape the domination of gold and the US dollar?😦