X8Currency (X8C) is a sharia-compliant cryptocurrency that is backed by gold and 8 unique fiat cryptocurrencies. What does it mean to have a stablecoin backed by 9 assets? And how can a cryptocurrency be sharia-compliant?
When you hear the words “cryptocurrency” and “gold” in the same sentence, someone is usually contrasting Bitcoin (BTC) and gold investment. By contrast, this stablecoin combines, rather than contrast, the two.
X8C Is Backed by Gold and Fiat
This stablecoin isn’t isn’t pegged to just one fiat, meaning government-backed currency. Instead, X8C is backed by gold, a relatively stable investment, as well as the USD, Euro, Pound Sterling, Yen, Australian Dollar, Canadian Dollar, New Zealand Dollar and the Swiss Franc.
The advantage of this is that every token isn’t pegged to just one, volatile asset. Instead, it’s peg includes the top 8 currencies it the world and gold, one of the most stable investments to mitigate loss.
Cryptocurrency Pegged to Fiat and Gold
For every token, X8 AG, the company behind it, has stored the equivalent amount in fiat and gold in a bank account, according to the company’s whitepaper. Theoretically, this means that someone who owns this cryptocurrency can exchange it for another form of currency without a fee.
According to X8 AG, they have these funds secured in Swiss bank accounts. The gold backing X8C comes from Swiss gold reserves.
AI Risk Management
How do they decide what backs a cryptocurrency? Artificial intelligence, AI, determines what backs each token. The goal is to balance this sharia-compliant cryptocurrency’s value and stability through algorithms.
How to Convert Fiat to X8C
First, an investor has to buy the ecosystem’s utility token: X8X. You cannot convert USD/X8C or visa versa without going through X8X.
X8X is an Ethereum utility token approved by the Swiss Regulatory Authorities. Developers are only releasing 100 million of the tokens.
Why create an X8X token? Capped at 100 million, it controls the amount of X8C, which has no cap. Additionally, it allows X8 AG to verify that its investors are KYC compliant. This means that have confirmed their clients’ identities per financial institution standards.
What does it mean for a stablecoin to be sharia compliant? Sharia laws are rules that originate from Islamic religious traditions. They apply to lots of different aspects of life, including financial services.
For example, charging someone interest or a penalty for a late payment is against Sharia law. Speculation is also contradictory. Investing in forbidden activities like pork or alcohol production or pornography is also against sharia-law.
Receiving sharia law certification is great for business in the Middle East. This way, sharia-companies and investors can now investest, all while staying in compliance. Additionally, countries like Saudi Arabia and the United Arab Emirates are full sharia-law compliant. To break into those markets, companies must follow sharia laws, too.
X8C: a New Kind Of Stablecoin?
Gold and fiat back this sharia-compliant cryptocurrency, as determined by AI software. And X8C could more into the global marketplace, including the Middle East, with sharia-compliance.
Pegged to multiple fiats and gold, X8C offers a new solution to the problem of stablecoin volatility. Recently, the price of the Winklevoss stablecoin climbed as Tether plummetted.