The Top Gold-Backed Cryptocurrencies You Need to Know About

Cryptocurrencies have been gaining popularity in recent years, with Bitcoin being the most well-known digital asset. However, there are newer types of cryptocurrencies on the market that are backed by gold. Gold-backed cryptocurrencies are digital assets whose value is determined by the equivalent price in gold. In this article, we will explore the top gold-backed cryptocurrencies you need to know about.

What Are Gold-Backed Cryptocurrencies?

Gold-backed cryptocurrencies are digital assets whose value is linked to the price of gold. Each token of the cryptocurrency represents a specific amount of gold, which is stored in a reserve or vault. The value of the cryptocurrency is therefore determined by the price of gold in the market.

Unlike other cryptocurrencies, gold-backed cryptocurrencies are not subject to the same volatility. They are tied to a tangible asset, which protects them from significant price fluctuations. Gold-backed cryptocurrencies are also relatively stable, making them an ideal investment option for risk-averse investors.

How Do Gold-Backed Cryptocurrencies Work?

Gold-backed cryptocurrencies work in a similar way to traditional cryptocurrencies. They are stored on a public blockchain, and each token represents a specific amount of gold. The gold is stored in a reserve or vault, and the value of the cryptocurrency is determined by the price of gold in the market.

Redemption of the cryptocurrency for physical gold is usually possible. However, this process can carry counterparty risk. When a gold-backed cryptocurrency is redeemed, it is burned and removed from circulation.

Top Gold-Backed Cryptocurrencies

There are several gold-backed cryptocurrencies on the market today. In this section, we will explore the top 10 gold-backed cryptocurrencies in more detail.

Tether Gold (XAUt)

Tether Gold is a gold-backed cryptocurrency that was created by Tether, the same company that created the Tether stablecoin. Unlike other cryptocurrencies, Tether Gold is pegged to the price of gold. One token of Tether Gold represents one Troy fine ounce of gold on a London Good Delivery bar.

Tether Gold is stored on the Ethereum blockchain as an ERC-20 token. It is also held as a TRC20 token on the TRON blockchain. Users can redeem their Tether Gold tokens for physical gold in Switzerland.

DigixGlobal (DGX)

DigixGlobal is a gold-backed cryptocurrency that allows users to invest in fractional tokens of gold. The company keeps physical gold backing the cryptocurrency in Singapore and Canada, and the custodians they use are fully insured members of the Bullion Association.

One token of DigixGlobal represents one gram of gold. The token is based on the Ethereum blockchain and is stored on Metamask and other ETH wallets. Users can trade their DGX tokens on cryptocurrency exchanges.

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Paxos Gold (PAXG)

Paxos Gold is a gold-backed cryptocurrency issued by Paxos, the company that created the Singapore-based cryptocurrency exchange known as itBit. Paxos is a regulated and legal custodian through a trusted charter issued by the New York State Department of Financial Services.

One token of Paxos Gold represents one fine Troy ounce of gold at a ratio of 1:1. The token is an ERC-20 token held on an Ethereum-based wallet. Users can redeem their Paxos Gold tokens for physical gold or trade them as futures contracts.

Goldcoin (GLC)

Goldcoin is a gold-backed cryptocurrency that is designed to be decentralized and promote economic freedom. Each token of Goldcoin represents 1/1000 of an ounce of gold. The platform is scalable through on-chain and off-chain scaling methods and is mined through the proof of work algorithm.

Goldcoin is based on the ERC-20 token standard and can be stored and sent from any Ethereum wallet. The token can be redeemed back into physical gold at any time and can also be converted back to fiat.

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Perth Mint Gold Token (PMGT)

The Perth Mint Gold Token is a tokenized version of the GoldPass certificate at a ratio of 1:1, which is also backed by physical gold at a ratio of 1:1. The token can be traded for certificates or fiat on digital asset exchanges.

One PMGT token is equal to one ounce of GoldPass certificate and one ounce of physical gold. The token is tradable on the over-the-counter gold market XAU and can be redeemed in multiple Perth Mint products.

Meld Gold by Algorand (MCAU)

Meld Gold by Algorand is a gold-backed cryptocurrency that allows users to transact gold in real-time. The tokens are backed by physical gold and are secured on the Algorand wallet. The platform allows for decentralized storage and holding of gold globally at any location and time.

Meld Gold can be purchased through the over-the-counter markets or from Meld partners. The token can be converted to any fiat or cryptocurrency on an exchange or back to gold certificates and physical gold.

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AurusGOLD (AWG)

AurusGOLD, also known as AWG, is a gold-backed token that is collateralized and redeemable for one gram of 99.99% gold from LBMA certificate refineries. The digital gold token can be used as an alternative to unstable fiat currencies or other cryptocurrencies.

AWG is minted by gold traders that can arbitrage between the AWG and bullion gold markets, keeping the price of AWG in line with the spot price. The token can be converted for physical gold from LBMA certificate refineries.

Cash Telex (CTLX)

Cash Telex is a token that is linked to a diversified gold, silver, diamonds, and real estate fund. Each Cash Telex gold coin represents one gram of gold that is securely stored and fully insured. All gold held is audited and publicly verifiable.

Cash Telex offers a wide variety of tokenized assets and allows accumulation in one-gram increments. The gold is publicly verifiable, and the token can be converted back to physical gold at any time.

AABB Gold Token (AABBG)

AABB Gold Token is a gold-backed cryptocurrency that uses a mine-to-token gold-backing format. The company verifies all of its physical gold assets that back the token 100% from the company's production segment. The token represents physical gold held by the company itself and is publicly verifiable.

CACHE Gold (CGT)

CACHE Gold Token is a cryptocurrency that is fully backed by physical gold and regulated with worldwide liquidity. Each token represents one gram of pure gold, and the token is stored on the Ethereum blockchain.

CGT offers almost instantaneous settlement of transactions in a widely distributed network infrastructure. The company offers GramChain, an asset tracking system that provides real-time bar locations, photographs, and gold-held serial numbers.

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Conclusion

Gold-backed cryptocurrencies are an exciting new asset that offers investors a stable investment option. There are several gold-backed cryptocurrencies on the market, each with its unique features and benefits. Tether Gold, DigixGlobal, and Paxos Gold are among the most prominent gold-backed cryptocurrencies. Goldcoin, Perth Mint Gold Token, Meld Gold by Algorand, AurusGOLD, Cash Telex, AABB Gold Token, and CACHE Gold are also worth exploring. When investing in gold-backed cryptocurrencies, it is essential to consider the counterparty risk, storage fees, and transaction fees.

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