Gold-backed crypto tokens continue to rise in price as sourcing gold itself during the coronavirus-induced downturn is reportedly getting more difficult.
Demand for Paxos Gold (PAXG) and Tether Gold (XAUT), two of the most liquid gold-backed token projects, has surged this week. Both blockchain-backed tokens each represent a legal entitlement to one ounce of gold stored in institutional vaults. Both tokens are redeemable for physical gold.
The uptick in demand comes as traditional gold suppliers face shortages and difficulties in bringing physical bullion to the market, according to reports.
“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,” Roy Sebag, founder of metals custodian Goldmoney, said in a phone interview with CoinDesk on Tuesday.
Purchases of new PAXG – which represent one ounce of London Bullion Market Association (LBMA) institutional-grade gold – have nearly doubled day-over-day since Monday, according to Paxos spokesperson Becky McClain. Paxos said Thursday it had enough gold…
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Author: William Foxley