Popular Blockchain trust company Paxos’ is likely to launch its precious metal- backed cryptocurrency. In an interview with Fortune’s Balancing the Ledger, CEO, and co-founder of Paxos, Charles Cascarilla was heard saying, “We will definitely launch the digital token backed precious metal.”
“It is something we will see definitely this year.” “We are excited about the concept of being able to take a commodity, and I think precious metals are really obvious ones, and gold is probably the most obvious and being able to tokenize it,” he said.
In order to implement the concept, he further said Paxos has to hold the amount of inventory “in the real world” equal to the one registered on the blockchain. He further explained, “In order to put something in a blockchain, you have to make sure you have the right amount of inventory in the real world versus what is in the blockchain. How you do with a gold token is how much gold do you have in a vault equals how many gold tokens outstanding.”
He further said that the company’s status as a financial institution allows it to use the banking system to ensure that they hold banking assets in the real world too. The company, however, said that it is yet to set the exact date of the launch. The CEO further added that it is a lot different from other Bitcoins because it is fully audited, highly regulated and approved by the New York State Department of Financial Services and is relatively liquid.
Paxo initially started as Bitcoin exchange itBit, which later rebranded itself as blockchain-focussed firm Paxos. Paxos holds a trust company charter in New York, which gives it the same privilege as a financial firm. This also can take custody of mainstream financial assets. It has been reported that last year, Paxos raised $65 million from investors to boost its operations.
Paxos is basically a regulated financial institution building infrastructure to enable movement between physical and digital assets. Some of its products include Paxos Standard, itBit, Custody, and Post-Trade. Last December, according to a report, PAX exceeded $5 billion worth of transaction volumes. At that time, the coin had been used in a transaction worth $5,245,958,124.65. This happened when the market cap of over $174 million. Of this, the trust company redeemed over $136 million.
The cryptocurrency market witnessed a slump last year-end. Hopes had dived down as the market took a massive hit in terms of price. The total market capitalization went down to $309 billion from $372 in just one day. Bitcoin was the most affected in this $60 billion variation. Although things are looking up, it is yet to catch up with the $560 billion made in December last year.