UK-based Saga Monetary Technologies (Saga) has scheduled for December 10, the official launch of its fiat reserve-backed token (SGA), an ERC-20-compliant token designed as both a Stablecoin and potentially a viable unit of currency.
Ahead of SGA release, Saga has opened onboarding process, allowing early birds to execute their purchase as soon as the token launches on December 10.
Utilizing a basket of national currencies that replicates the International Monetary Fund's SDR, the company offers a more common or trusted asset to back its token.
While addressing concerns regarding Volatility , governance, and regulatory compliance, SGA could also appeal to potential buyers who are reassured by the familiarity. The IMF’s special drawing rights (SDR) has been an international reserve asset created fifty years ago to supplement member countries’ official reserves for the purpose of expanding global trade.
Saga Advisory Board includes some bigwig advisors, namely JPMorgan Chase International Chairman Jacob Frenkel, Nobel Laureate in Economic Sciences Myron Scholes, and financial futures pioneer and CME Chairman Emeritus Leo Melamed.
The first distinguishing feature of the Saga (SGA), explains the company, is that participants will be its “economy's sovereign decision-makers.” The governance mechanisms include electing the executive council overseeing the project.
The SGA supply will be altered
“Combining fair representation with effective administration will help ensure reliable governance of the project, ultimately increasing user trust in SGA. Furthermore, SGA is designed to comply fully with existing regulatory frameworks globally, which will help ease use around the world,” it said.
The company will build reserves in major fiat currencies, created from sales of SGA tokens to ensure the coin’s stability. The proceeds are stored in banks and used for the sole purpose of allowing Saga’s smart contract to buy back SGA tokens.
The SGA supply will be altered according to the smart contract – when the economy expands, more SGA tokens will be released, and vice versa. Specifically, the foundation describes a process that slowly reduces the fraction of SGA value based on its fiat reserves alongside the user’s growing confidence into the token. Measured by the number of tokens issued, if the SGA supply starts to shrink back, the amount of fiat backing is automatically increased, reflecting the reduced trust in Saga’s economy.
“Based on the SGA’s market movements, measured by the number of tokens issued, the Saga monetary model will gradually diminish reliance on the reserve as user confidence in SGA grows. Together, these measures are designed to reduce price volatility while allowing SGA to grow beyond a simple fiat-backed / pegged stablecoin,” it further explains.
