Stablecoins Backed by Precious Metals

This asset could be fiat money, precious metals like gold and silver, oil or almost anything that has tangible value.

Very early stablecoins like Tether were fiat-pegged, but as time went on, developers began to associate their stablecoins to other assets such as gold.

Two types of cryptocurrencies have been developed for the project: Digix Gold and Digix DAO.Digix Gold is a stablecoin tied directly to gold.

To ensure the exchange rate, gold bullion approved by the London Association of the Precious Metals Market has been placed in the bank account.

GoldMintGoldMint is a blockchain-based platform using Gold digital assets that are 100% backed by physical gold or exchange-traded funds.

GoldMint depends on two native tokens - Gold and MNT. The first is an investment instrument fully backed by physical gold and/or ETFs.

One Gold token is equivalent to one ounce of gold on the Global Authority for Precious Metals.

GoldMint is aiming for tokens to be redeemed on its website to the investor's personal account, where all Gold crypto assets at the current price of gold can be liquidated either instantly or within a certain period of time and without any additional fees.

The group is preparing to issue a cryptocurrency supported by non-ferrous and precious metals such as copper, aluminum, gold, platinum, tin, nickel and cobalt, according to Bloomberg.

Gold-backed stablecoins are similar to gold funds and are thus deemed as safe investments, as argued by Digix Gold's co-founder and COO Shaun Djie:."The crypto market has generally reacted well to using stablecoins as a mode of payment, store of value and a hedge against the volatility of most cryptocurrencies. It would not be so much of a district in cryptocurrencies but rather, an alternative to having something more stable and well-recognized store of value."