Mar 28, 2020 02:30 UTC
Mar 28, 2020 at 02:30 UTC
Gold-Backed Stablecoins In High Demand Amidst Ongoing Economic Crisis
Gold-supported stablecoins, for example, Paxos Gold (PAXG) and Tether Gold (XAUT) are sought after in the midst of the continuous economic crisis.
As indicated by a report from CoinDesk, the interest for cryptocurrencies pegged to gold is expanding alongside its physical partner. Both PAXG and XAUT are backed by one ounce of gold stored in an institutional vault. Investors are qualified for reclaiming the physical gold in return for the blockchain-based token.
Roy Sebag, founder of metals custodian, Goldmoney, clarified the interest for gold in a telephone interview on Tuesday –
“The Fed completely changed the rules – the real rate of interest swung even more and so we are seeing all that money flow into gold immediately.”
PAXG buys have dramatically increased day-over-day since the starting of the week, with Paxos Spokesperson Becky McClain asserting the platform had enough physical gold to cover current volumes.
Interest for XAUT additionally expanded, driving the stablecoin’s market capitalization to $50 million on March 25, regardless of worries over supply-chain issues in sourcing the gold.
Tether said in an announcement –
“We have seen strong growth for XAUT and we anticipate XAUT will continue to grow as it establishes itself as the dominant digital token representing gold ownership.”
A report by MarketWatch, on March 26, claimed the uptick sought after for physical gold has likewise soar, with customary suppliers confronting deficiencies in getting the physical bullion to market.