Australia-based fintech firm InifiniGold has announced that it will be launching a gold-backed digital token on the Ethereum network. The gold backing the token will be guaranteed by the government of Western Australia, which owns the Perth Mint. Therefore, the company claims that its coin, dubbed the Perth Mint Gold Token (PMGT), is “the world’s first sovereign gold digital token.”
The company expects that institutional investors may be interested in the token due to as well as the benefits associated with blockchain technology: “it offers institutional investors a competitive alternative to traditional gold products such as gold ETFs, with the additional benefits of real-time trading and settlement enabled by blockchain technology,” said the company’s official announcement of the new token.
In collaboration with The Perth Mint InfiniGold has released a digitised form of gold based on digital gold certificates (a form of cryptocurrency within a private system). These certificates allow institutions to offer investors to trade and hold physical gold digitally 24/7. pic.twitter.com/9vNQJ12yS3
— The Perth Mint (@perthmint) January 25, 2018
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The Perth Mint’s collaboration with Infinigold first began in 2018 with the launch of GoldPass, a mobile app that allows investors to instantly buy, sell, and transfer ownership of physical cold using digital certificates.
The new token will essentially take these certificates and put them onto the Ethereum blockchain. PMGT tokens are convertible into these digital certificates for customers who have undergone The Perth Mint. However, the tokens themselves do not have the same government backing that the gold itself has
Perth Mint CEO Richard Hayes said that “the digitization of gold via a public ledger is a natural progression for the global commodity markets. It will promote gold as a mainstream asset, enhance its accessibility, and offer greater liquidity, transparency, and auditability of the real assets backing this type of digital token.”
The list of gold-backed cryptocurrencies continues to grow
Infinigold’s collaboration with the Perth Mint isn’t the first time that a government-owned mint has been involved in the exploration of launching a gold-backed token. Last year, Reuters reported that Britain’s Royal Mint halted plans to issue a gold-backed token of its own following the government’s decision to nix a plan that would have made the tokens available for trading on a cryptocurrency exchange.
Although InfiniGold’s token may indeed be the first “sovereign” gold digital token, it certainly isn’t the first-ever gold digital token. A number of private companies have launched cryptocurrencies that are backed by physical gold reserve, including Singapore-based DigixGlobal and Russia-based Goldmint.
In September, Finance Magnates reported that New York-based firm Paxos introduced a cryptocurrency backed by physical gold. Each token, dubbed PAX Gold (PAXG), is backed by an ounce of gold held in a London vault.