Gold bugs and cryptocurrency enthusiasts haven’t exactly seen eye to eye over the years, but there is nothing to stop fans of either side owning a piece of the other in their portfolio – in fact it should be encouraged.
With physical gold in short supply however, many are turning to cryptocurrencies that claim to be gold-backed, but with dozens of projects claiming to be backed by real gold there are bound to be some that are more legitimate than others. We’ve combed through the stack to bring you three we think are worth looking at if you want a slice of gold but can’t get your hands on the real thing.
Digix is something of an old hand at the gold/crypto game, having been formed in December 2014, so unlike other more recent startups they have something of a pedigree. The idea behind Digix is that one DGX token is equal to one gram of gold, making it easy to know exactly how much you own, and being Ethereum-based the tokens can be stored securely in all major online and cold wallets.
Digix owns 106KG of gold kilobars, which are housed in what Digix calls The Safe House, a vault in Singapore which is operated by BRINKS. The company undergoes regular audits by Inspectorate at Bureau Veritas, with the most recent one being in January 2019, and the list of gold bars they own is viewable on their website for total transparency.
DGC tokens are available from Bitfinex, Kyber Network, and VCC Exchange, or through Digix itself.
Pax Gold (PAXG)
Paxos had already been operating their own stablecoin, Paxos Standard, for one year before announcing Pax Gold. The New York-based stablecoin issuer launched the Pax Gold token on the Ethereum network, with each token representing one ounce of gold. They may be a newer name in the gold-backed crypto game, but the operation has been approved by the New York Department of Financial Services so they are clearly very much above board.
What marks Paxos out from the competition is the fact that each token is redeemable for the equivalent in physical gold from partnering institutions, such as New York’s Bullion Exchanges, so this could be a way of you getting your hands on physical gold in a roundabout way.
Paxos’ gold is stored by BRINKS in an industrial-grade vault in London, where holders can also exchange tokens for physical gold at participating locations. PAXG tokens are available from Bithumb, Kraken, HitBTC, and FTX.
Tether Gold (XAUT)
From the people that brought you a never quite officially-backed stablecoin comes their latest and greatest offering – Tether Gold. Tether Gold launched earlier this year, claiming that “one full XAUT token represents one troy fine ounce of gold on a London Good Delivery bar”, once more on the Ethereum platform.
For transparency, holders can check the serial address of the gold bar (or portion of it) that they own by entering their ETH address into the Tether website, while tokens can be redeemed for physical gold through an online process.
In true Tether style however, neither the amount of gold actually under ownership nor any storage details have been offered by the company, leaving interested parties trusting that Tether has the gold to back up their holding. And if past experience is anything to go by, this might be something of a stretch.
Tether Gold is available from Bitfinex and FTX.
All That Glitters Can be Bought Digitally
Gold-backed cryptocurrencies combine the attractiveness of gold as a hedge to other market moves with the portability and flexibility of a digital asset. As with any asset, ensure you do your own due diligence before you invest, but the benefit with some of gold-backed cryptocurrencies is that you can trade them for real gold in case you feel the need.