Perth Mint Gold Digital Token Could Be an Alternative to Stablecoins
InfiniGold is collaborating with the Perth Mint, the world’s largest refiner of newly minted gold, to release the digital token Perth Mint Gold Token (PMGT), which is backed 1:1 by GoldPass certificates issued by the Perth Mint. It could be an alternative to current stablecoins, especially Tether, which is backed by the US dollar. PMGT gives users ownership of government-guaranteed gold stored at The Perth Mint. The Mint touts benefits like real-time trading and settlement thanks to blockchain.
According to a press release, Perth Mint began digitizing its inventory in 2018 with GoldPass, which allows investors to securely buy, sell, and transfer physical gold via digital certificates, which is backed 100% by physical Perth Mint gold in its network of central bank grade vaults. Every ounce of gold held in storage was guaranteed by the Government of Western Australia.
InfiniGold is issuing PMGT as an ERC-20 token on the Ethereum blockchain. It is bringing GoldPass and the physical Perth Mint gold that backs each certificate to the public blockchain. PMGT offers real-time liquidity through market makers on the platforms. All investors can sell back to the Mint. They can also take delivery of holdings by exchanging their GoldPass certificates for a range of the Mint’s gold products. This includes LBMA London Good Delivery (LGD) bars. This is subject to final regulatory consultation and will make PMGT directly tradable against traditional gold products, such as gold ETFs, CME gold futures, and physical XAU.
PMGT could be seen as an alternative to USD-backed stable coins. They have attracted US$2.3bn year-to-date in 2019. Average daily trading volumes are in excess of US$15bn.
“We’ve been looking forward to unveiling PMGT, an exciting result of our collaboration with The Perth Mint – the preeminent precious metals institution in the world. With The Perth Mint as custodian of the underlying physical gold that backs PMGT, buyers will be able to access a secure and reliable token representing the strongest asset class to date – gold,” Andreas Ruf, CEO of InfiniGold said.
“We’re delighted to be working with InfiniGold and offer safe storage for the physical gold we will supply and hold, as our role as a custodian through GoldPass certificates,” said Richard Hayes, Chief Executive Officer of The Perth Mint. “The digitization of gold via a public ledger is a natural progression for the global commodity markets. It will promote gold as a mainstream asset, enhance its accessibility, and offer greater liquidity, transparency and auditability of the real assets backing this type of digital tokens.”
“Our aim is to make gold accessible to as many people in as many places as we possibly can in the easiest way possible,” Hayes told ABC Net Australia.
Jon Deane, a former Managing Director at JP Morgan and now CEO of TCM Capital, which has been advising the project, said. “The involvement of The Perth Mint as the largest refinery in the world and a leading exporter of gold ensures that the product offers both the scalability and credibility that the market clearly needs,” she said.
The Chairman of TCM Capital, Steve Bellotti, said, “InfiniGold’s PMGT is perfectly positioned, via the blockchain, to complement the current institutional gold market.”
Perth Mint has been at the forefront of trading gold on smartphones. The Perth Mint is Australia’s official bullion mint and exports more than AUD 18 billion of bullion bards and coins to more than 130 countries each year.
The technology behind Infinigold and the Perth Mint’s collaboration uses encrypted digital certificates stored in a digital vault on an owner’s smartphone. They are tradable via the smartphone app.
The Royal Mint has a similar system, and both platforms allow users to buy and sell gold in real-time transactions based on the Perth Mint price.
“We certainly try to make it easier and easier, within reason, for people to access precious metals. This would just be another way for them to do it,” according to the Perth Mint’s chief executive.