Swiss foundation hopes to create less volatile Saga coin, that is more palatable to banks and governments.
You may not have heard of Saga, a proposed cryptocurrency that is the product of a group of respected economists. There’s a good reason for that: it has foregone the standard high-profile ICO launch, in favour of a more low-key approach that begins to make good on its promise to be a “more acceptable to the financial and political establishment”, in the words of the The Financial Times .
Instead, the Swiss-based Saga foundation has quietly leveraged the pedigree of those behind it to raise $30m from institutional investors for its creation of a special zero-value token, that will entitle those putting money in early to rising amounts of Saga as-and-when the new coin goes into use.
Saga aims to brace itself against the wild swings in value that we have seen among existing cryptocurrencies by rooting itself in a basket of fiat currencies, held in reserve by the Swiss foundation that is launching it with the IMF’s special drawing basket of currencies, heavily weighted in US dollars. In control of said reserve will be an advisory board including JPMorgan Chase International chairman Jacob Frenkel, and Nobel Prize-winning economist Myron Scholes.
Using smart contracts, Saga will be underpinned by a “variable fractional reserve system”, where the amount of fiat held in reserve will be rise and fall based on demand and usage.
As part of its drive for more mainstream credibility, Saga will also forego the anonymity aspect of Bitcoin et al, requiring its users to pass anti-money laundering checks and opening up records to legitimate requests from authorities when required.
“While blockchain technologies have gained growing acceptance, encryptic currencies have raised public policy concerns, since they are anonymous, unbacked and are highly volatile,” Mr Frenkel to the FT “I share these concerns and see great value in Saga’s vision to address them properly.”
Saga’s president, Ido Sadeh Man, claims the new crypto doesn’t see it as replacing fiat, but rather “to be a complementary global currency,” and that it is targeting “people who are holding digital currencies and looking for safe harbours from the raging volatility.”
Saga should be available in Q4 2018