Paxos, a startup cryptocurrencies with headquarters in New York, announced this Thursday, September 5, that the Department of Financial Services (DFS) of the state of New York approved the issuance of a token digital backed in gold and a criptomoneda stable anchored to the dollar, in association with Binance.The regulated financial institution had already announced earlier this year, but pointed out that I had to make sure that you have the same amount of dollars, precious metals or shares in the real world that the assets recorded in the blockchain.On the social network Twitter, the firm reported that the Department of Financial Services of New York gave the green light to this active ingredient called “PAX Gold” (PAXG), characterizing it as “the first virtual currency backed by gold in the state of New York.”
NEW: @NYDFS has approved PAX Gold (PAXG)! Real, physical gold on the blockchain, launched today. Read more in @FortuneMagazine by @jeffjohnroberts “Crypto or Gold? Paxos Offers Both With First Gold-Backed Token” https://t.co/x8q4DAOrajMore info: https://t.co/hNCruyKqX1— Paxos (@PaxosGlobal) September 5, 2019
In fact, the CEO of Paxos, Chad Cascarilla, stressed in an interview to Fortune Magazine that with each token based on ethereum encapsulates the legal title of an ounce of gold physically stored in the vault of Brink in London.In its judgment, the company wants to capture “any type of asset and insert it in a blockchain. There’s what you do with a token of gold is to see how much gold you have in a vault is equal to how many tokens of gold remain”.In a press release of the DFS, also this Thursday, the announcement of the passage to Paxos token PAXG backed in gold, and also of the criptomoneda stable BUSD, anchored to the us dollar, which will be released in this month for Paxos, in association with Binance.
NEW: We are also excited to share that @NYDFS has approved BUSD, our new dollar-backed stablecoin, launching later in September in partnership with @binance. Read more here: https://t.co/xIMmxoB6hh— Paxos (@PaxosGlobal) September 5, 2019
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Benefits of tokenization
Scale commented that among the benefits of tokenization, each token PAXG costs the same as a troy ounce of gold (31,10 grams) and can be redeemed for a bar physical in partner institutions, such as Bullion Exchanges in New York. “In a financial system that is digital and global, owning physical gold is an investment cumbersome and outdated; it is not easy to trade, divide, move, or take advantage compared to other investments,” he added.In his opinion, “although it is possible to market easily derived from the gold, ETFs and gold not assigned to them, these are the representations listed in small markets and limited, and none involves the ownership of the physical gold”To Scale “the gold is purchased through retail outlets not accredited not only costly, but also risky, since the quality and origin of the gold are not verified”.According to the data on its website, each token PAXG will be backed by a fine troy ounce of gold London Good Delivery stored in facilities vaults professionals in London.As well, users who have the above-mentioned tokens, they have the gold they represent, but the tokens can be moved as any other token ERC-20, which is substantially more simple to handle gold.
Capture the interest
However, skeptics such as Roy Sebag, founder of the custodian of precious metals Goldmoney warn that Paxos will require to capture potential traders of gold who are interested in cryptocurrencies beyond Bitcoin.De fact, the World Gold Council noted that the purchases of the central bank and inflows of investment funds or Exchange traded funds (ETF by its acronym in English) have been the driving forces behind the demand for gold during the first half of 2019.However, he added that the technology sector reduced its use of gold because of the difficult global conditions, although the prospect is that this element of the demand set a floor in the next quarters of the year. The agency supervisor remarked that the strong growth in mining production, as in the recycling contributed to a 2% increase in the total supply of gold in the first quarter.
This is not the first nor will be the only
Paxos has not been the only one to take this step, because in January of this year, the government of Iran announced the criptomoneda PayMon with the goal of evade international financial sanctions, which is backed in gold. In fact, the criptoactivo was the product of a partnership between four local banks and the company Kuknos Company.For its part, the Central Bank of Russia announced in may of this year that I would be analyzing the possibility of creating a criptomoneda anchored to gold.Elvira Nabiullina, president of the Central Bank of Russia, noted that a committee of the State Duma will decide that the purpose of this instrument is to implement payments and settlements with other countries.However, he clarified that the Bank of Russia would prefer to make payments intergovernmental coins as legal tender. “We generally oppose the use of cryptocurrencies in our monetary system,” he said.What is certain is that there are several actors that evaluate the possibility that the cryptocurrencies can act as substitutes for money. In fact, Paxos and the wallet of bitcoin BitPay partnered last year with the objective of providing companies and traders access to the stablecoin to reduce the volatility of other virtual currencies.