Tokenized gold assets surpassed $1 billion in combined market capitalization on Tuesday, according to data by crypto price tracker CoinGecko, as gold’s price neared its all-time high.
Tokenized 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 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 time, 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.
CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk offers all employees above a certain salary threshold, including journalists, stock options in the Bullish group as part of their compensation.