The potential in growth that the crypto industry has is as exciting as it is daunting. While the prospect of it becoming more mainstream is great, many are worried about how it will maintain stability. After all, cryptocurrencies are known for their volatility, so won’t all the turbulence from this innovation make it more fickle than it already is? This is where backed cryptos — stablecoins — come in.
With an increase in popularity, there are an array of precious metal-backed cryptocurrencies out there to invest in. From gold (ex. DigixGlobal) to silver (ex. Silver Coin), this article will highlight the best of the bunch.
Perth Mint Gold Token (PMGT)
The Perth Mint Gold Token (PMGT) is gold-backed crypto that has its precious metal provided by the Western Australian government’s Perth Mint. The government guarantees the weight and purity of the gold, and with the GoldPass app, the mint distributes digital gold certificates.
Under the management of InfiniGold, the amount of gold backing each PMGT token is verifiable in real-time against the balance of GoldPass accounts that the Perth Mint publishes. This means that if holders want to see that the tokens are fully backed, they won’t have to wait around for monthly audits to prove it.
Holders can redeem their PMGT holdings for physical gold. With that said, there is minimal liquidity.
Supplied by Singapore-based company, DigixGlobal, each DGX token possess a value of 1 gram of gold. Vaults located in Singapore and Canada act as storage for the gold that backs these tokens. The Bullion Association is responsible for insuring and accrediting these vaults.
DGX tokens provide holders with an effective method of dividing, redeeming, and transporting gold bars through the process of buying and selling virtual gold in token form. DigixGlobal founders developed this digitization procedure as a way to normalize gold access.
Unlike GoldPass, DigixGlobal traders are charged a 1% trading fee to exchange their tokens for real gold. Moreover, the company takes on the demurrage fee, which is the cost of gold storage. DGX tokens are traded sparingly and have a market cap of just over $4 million.
Silver Coin is the first fractionalized silver-backed asset that can be purchased with other digital currencies or even fiat currencies. Its top-notch security measures, fractionalized nature, and inclusive nature make it an ideal option for many investors. Buying Silver Coin does not require identification. Instead, investors only need an Ethereum wallet address to receive this crypto. Moreover, Silver Coin investors can redeem their holdings for 99.9% silver whenever they want.
The team behind this silver-backed crypto provides a live stream for investors to see the stored physical silver bullion that backs the coins. They can also view published audit reports on the website for easy access. Silver Coin’s aforementioned security measures include two-factor authentication upon login, which will help reduce the risks of a potential hack.
Gold Coin (GLC)
Gold Coin is a gold-backed cryptocurrency that is fractional, meaning that a single coin is worth a fraction of 1 gram of gold. This means that the barrier to entry for this crypto is very low. This is in stark contrast to other coins and gold itself, where the buy-in can be expensive.
Gold Coin was created — and currently resides on — the Ethereum blockchain and has endured for several years. The stable platform and its easy entry make this one of the safer options available. Users can invest in it incrementally because it gains your trust without immediately breaking the bank.
PAX Coin (PAXG)
PAX Gold is a gold-backed cryptocurrency that PAXOS launched. Its main objective is to find a solution for the problems pertaining to gold storage and the use of gold as an exchange medium. The company vows that every PAXG token is backed by physical gold kept in a vault located in London. A single token represents one troy ounce of LBMA (London Bullion Market Association) good delivery gold. They also provide confirmation to investors that the gold is audited monthly.
PAX gold is among the largest crypto commodity projects in the world. Because PAXG is an ERC-20 token, it can be stored in any Ethereum wallet. The company claims that the gold is held separately from its own assets, so should the company go under, the gold will not be seized as payment for creditors.
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