WHY THIS MATTERS IN BRIEF
Tokenised gold is a new form of Web 3.0 digital asset that’s backed by gold, and it shows just how much technology is changing assets and money.
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Tokenised gold is a type of Stablecoin that pegs its price to gold, while the tokens on the blockchain represent ownership of physical gold managed by the issuer. It offers investors a way to get exposure to the precious metal without the management fees of an Exchange Traded Fund (ETF) or the burden of storing gold bullions.
The Future of Banking, Money, and Payments by keynote Matthew Griffin
The two largest gold stablecoins, by far, are Pax Gold (PAXG), issued by the New York-based fintech firm Paxos Trust Company, and Tether Gold (XAUT), issued by Tether, the same company behind the $80 billion-pegged stablecoin USDT. At the time of publication, the market cap of PAXG and XAUT is $518 million and $499 million, respectively, per CoinGecko data.
The price of gold, a traditional safe-haven asset, has risen since March amid investor concerns about flailing banks and a possible government bailout, which would lead to expanding fiat money supply and currency devaluation. The metal was trading at $2,021 per ounce on Tuesday, just some 3% off its all-time high recorded in August 2020.
Bitcoin, which is often called digital gold due its program-coded supply cap, has rallied to as high as $29,000 from $20,000 in tandem with gold’s surge. BTC’s correlation with gold hit a multi-year high last week, surpassing equities, digital asset market research firm Kaiko reported Monday.