Gold-backed currencies are newer variants of stablecoins, which are typically pegged to the dollar to control volatility. Gold-backed cryptocurrencies, also known as “gold-pegged”, are backed by the physical value of gold. Like stablecoins, most gold-backed cryptocurrencies represent a physical collection of gold held by the issuer of the stablecoin. The largest stablecoin is Tether (USDT).
A Tether token is backed by a USD. The largest token by market capitalization is the gold token Perth Mint (PMGT) for gold-backed cryptos. In this context, it's easy to see why gold-backed crypto projects are seeing such a huge increase in popularity. Instead of worrying about physically holding gold, you can now buy crypto-backed gold.
In some cases, you can exchange tokens for real gold. While in others, you simply exchange and withdraw the token when it's time to make a profit or buy more. Gold-backed cryptocurrency is a type of stable cryptocurrency in which each token is backed by physical gold. With the price of the token linked to the current price of gold, there is less price volatility compared to Bitcoin or other altcoins.
Gold-linked tokens aim to prevent price fluctuations by linking the derivative asset to a tangible asset. It is backed at a ratio of 1000 GoldCoin per ounce of gold, making it less volatile than Bitcoin and other altcoins not tied to any stable asset. Each token can be redeemed for 1 gram of gold supplied by London Bullion Market Association (LBMA) certified refineries. GoldFinx (GiX) provides funding to small artisanal gold mines (ASGM) around the world and obtains a share of its production in return.
Sudan gold coin is a gold mining company with blockchain technologies that offers a fair distribution of profits. Pyrrhos Gold (PGOLD) is an asset-backed token where a thousand tokens represent one gram of gold bullion, stored in professional vaults. The PACT platform is backed by a physical gold mine, as the company also buys physical gold to keep the reserves of each currency held by the public. Despite the growing popularity of cryptocurrency, many aspiring cryptocurrency investors are forced to buy or hold digital assets due to the volatile nature of the industry.
Meld Gold was created by Algorand as a stable alternative to altcoins; it makes investing in gold accessible to investors in the form of Meld Digital gold certificates. Tether Gold reserves are held in Swiss vaults and investors must pay a small fee of 0.25% per transaction. GBT's gold backing is in a partner vault audited by Bureau Veritas and insured by XL Group. In the more serene world of old-school finance, gold has been quietly doing what gold always does, watching the fun and slowly rising in value while everyone else goes crazy.
You can buy Bitcoin and Ethereum on Binance (the world's largest cryptocurrency exchange), and then send the funds according to the instructions given by the gold token you're buying. Magma Coin ran an ICO with the white paper stating that “the company uses exchange-traded funds (ETFs) or physical gold (999 quality) as collateral. The TROY token, known as GOLD, provides an opportunity to purchase TROY's gold products using Blockchain. After originally writing for the financial industry, Jack has been published in Blockchain Magazine and Cointelegraph, covering hundreds of projects and their potential to impact the future of cryptocurrency.