DNC is a less risk exposed instrument. DNC is one of the best solutions since it is pegged by 1:1 value of exact quantity of gold on XAU spot instrument. It is also a non-margin product and allowing retails customers to tap into the full potential of controlling gold assets with all advantages of exchange traded products and Contract for Difference (CFD) merged into a single instrument.Risks around security, payment beneficiary identification and currency volatility (e.g. Bitcoin) have raised concerns in the marketplace among consumers and businesses. Currently a limited user base and the regulatory framework and tax treatments of digital currencies are still being determined. Additionally, much of the infrastructure required to support the broader use of digital currencies is, likewise, still being developed. On the other hand, the value of digital currencies relative to major fiat currencies can be highly volatile and there are few alternatives available to match this risk.
As conclusion, implementation of DNC in the market as Crypto Asset can be used in portfolios to protect global purchasing power, reduce portfolio volatility and minimise losses during period market shock. It can serve as a high-quality, liquid asset when selling other currencies in the world would cause losses.
Gold’s typically strong inverse correlation with the US dollar and many other developed-markets’ currencies make it a valuable pegged against short- and long-term fluctuations in the value of major currencies. Because it normally also holds its value against major currencies, gold is also effectively used as an inflation pegged. Investors can benefit from gold’s role as a diversifier. Gold can be used to reduce portfolio volatility, minimise losses during periods of market shock, and serve as a high-quality liquid asset when selling other assets would incur large costs or losses. Gold has very low correlation to most assets over the long run, making gold’s contribution to portfolio volatility small. In fact, in most instances, gold helps to reduce volatility significantly.
Shariah risk impact
Like any other currency, DNC is money within its community and exchanging is with other currencies is definitely subject to the same conditions of exchanging currencies mechanism. It is just like any other fiat currency, and is subjected to the same scrutiny. However, DNC is a Crypto Asset on the basis that it is an on-the-spot transaction receiving the token with the equal value from the liquidity provider that can use worldwide not just among its community but also as the method of payment mechanism.
DNC is the safest to use and store as this Crypto Asset will be stored in E-Wallet that is similar to the internet banking system. It is not printed as the other fiat money and it is not based on the demand & supply features of other Crypto Currencies, DNC is a backed by gold pegged 1:1 exact quantity of gold on XAU spot instrument. Hence, DNC will be audited using the Blockchain Technology which is now is latest secured record keeping that featured in decentralized peer to peer system & transparent which is still new and performed as public ledger that can be monitor by open source.
The owner of the DinarCoin platform belongs to DinarDirham, operating off of the website DinarDirham.com. Within the system, DinarDirham using Ethereum’s Protocol will have ownership of the Executive Access, an organization which is a complex set of Smart Contracts that reside on the Ethereum Blockchain.
The liquidity providers are organizations that store, secure, and insure physical gold bullion, upon receiving gold from someone, or selling gold to someone, the depository places that gold in secure storage, and issues a depository to the owner. Traders will operate in the system as members of the traders.
After downloading a DinarDirham Wallet, a trader will be provided with a facility, via the wallet, to perform verification processes. These processes are to be defined, but it is envisaged that there will be different levels of membership for the traders depending on the different verification processes completed. Different levels of membership would have different restrictions turned on or off.