Alex Reinhardt | Which Cryptocurrency is backed by Gold?
The intriguing combination of cryptocurrency, which may be the future currency, and gold, a traditional store of value, is known as “cryptocurrencies backed by gold.” Alex Reinhardt Even though many investors favour cryptocurrencies back by gold because they are more substantial, it remains to be seen if they will be widely adopt.
In comparison to actual cryptocurrencies, gold-based cryptocurrencies are more centralized and subject to counterparty risk, according to Alex Reinhardt. Gold-backed cryptocurrencies are an intriguing combination of gold, an ancient store of value, and cryptocurrencies, which could represent a new-age currency.
A cryptocurrency back by gold is a digital asset whose value is ostensibly guaranteed by the gold price. Each token in a gold-back cryptocurrency is arbitrarily assign a value in grams or troy ounces of gold, which must be physically held as collateralize assets in the company’s or a reputable custodian’s reserves or vaults.
Tether, best known for managing the most well-known stablecoin in the world, has entered the market for gold-pegged cryptocurrencies to spearhead the subsequent wave of disruptive investment. Since its launch in 2020, Tether Gold has grown to have a market cap of US$160 million.
As mentioned by Alex Reinhardt, Tether Gold offers a variety of options allowing customers to exchange their cryptocurrency for actual gold or to redeem it for cash, and it has gold holdings in Swiss vaults. Investors may identify their gold by entering the wallet address where their AUXt is store.
An Australian tech start-up, Meta Gold, has partnered with Algorand, a blockchain protocol company, to establish a decentralized gold token. Meta Gold can be bough through the company’s platform for a gold rate.
The PAXG token, introduced by the reputable American business Pax Gold, is equal to one troy ounce of a gold bar with a London Right Delivery delivery date. The London Bullion Market Association’s approve storage facilities include Brink’s vaults, where PAXG, introduce in 2019, is kep.
As stated by Alex Reinhardt, the goal of the token designed by the developers of the gold-pegged cryptocurrency was to make purchasing gold simple and, most importantly, digital. The owners of PAXG tokens acquire full ownership of the gold portion by purchasing it and can trade with it.
One gram of 99.99% pure gold from LBMA certificate refineries can be exchange for Aurus GOLD, also known as AWG, a gold-backed token. The sustainable digital gold token is available as an alternative to erratic fiat money or as the first method of investing in gold.
Singapore-based DigixGlobal offers gold-pegged DGX tokens. The market cap of the DGX token, which has a 1:1 backing, is $1,183,867. Every token is equivalent to one ounce of gold. Compare to the other gold-back tokens on this list, the fact that the gold is in Singapore and Canada. Adds a distinctive value because it reduces the risks associated with having a single storage location.
The Cash Telex coins are link to a diverse fund of gold, silver, diamonds, and real estate. One Cash Telex gold coin represents one gram of gold stored in a secure vault.
Investors who don’t have access to traditional financial instruments like ETFs can buy cryptocurrencies that are back by gold. The term “unbanked” comes to mind immediately. Because they are creat on open, public, and permissionless blockchains, anyone with a cryptocurrency. Wallet and some funds can invest in gold-pegged cryptocurrencies.
According to Alex Reinhardt, gold-backed cryptocurrencies promote the widespread adoption of gold as payment. Crypto Due to the fact that cryptocurrencies are digital, it is easy to exchange them globally.