Precious Metals Data Provider Kitco to Issue Gold-Backed Stablecoin
Kitco Gold will be backed by physical gold stored in vaults and will track the real-time market value of the yellow metal.
Kitco, a Canada-based provider of news and data on gold and other precious metals, is getting into the stablecoin game.
Kitco Gold (KGLD) will be fully backed by physical gold held in Kitco's DirectReserve vaults and will track the real-time market value of the yellow metal, according to a press release shared with CoinDesk on Wednesday.
The initial trading date for KGLD hasn't been set yet, but it will be in the coming weeks, according to a spokesperson.
Hong Kong's First Digital Trust will provide regulatory compliance, know-your-customer and anti-money laundering procedures, funds processing and final authorization. Stablecoin issuer Stably will provide smart contract technology for minting and burning KGLD on the Ethereum network, and Tradewind Markets will assist in settlement.
The stablecoin attempts to combine the safe-haven nature of owning gold with the flexibility and transparency of a digital asset, Kitco said.
Kitco provides precious metals news and data used by millions to access the market prices of gold, silver, palladium and other metals. Its users will now gain access to the digital equivalent of Kitco’s depositories and vaults, which are audited to industry standards, according to Kitco's press release.
John Dourekas, a Kitco spokesman, said KGLD represents a digital receipt of physical gold ownership and provides institutional investors with a "robust" asset class.
"Investors will have a competitive alternative to traditional gold products such as gold ETFs (exchange-traded funds), with the additional benefits of real-time trading and settlement enabled by blockchain technology,” Dourekas said.
Kitco's entrance into gold-backed stablecoins follows Paxos Gold and Tether Gold, which launched their versions of the coins in 2019 and 2020 respectively. Though Kitco's endeavor comes later, market participants will likely welcome the gold bug's attempt to pry some market share from dominant stablecoin issuers, Kitco said.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.
Learn more about Consensus 2023, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.