Cryptocurrency Backed By Gold Introduced By UK’s Royal Mintbr>
The Royal Mint, which produces the United Kingdom’s currency and holds gold, has announced the launch of its own gold-backed cryptocurrency.
Called Royal Mint Gold (RMG), it was first unveiled by the Royal Mint in December 2016. To create RMG, the Royal Mint partnered with derivatives marketplace CME Group. Blockchain firm BitGo was responsible for the development of RMG’s multi-signature wallet.
The RMG coin is a digitized gold offering that utilizes distributed ledger technology (DLT) to make it more cost-effective and provide increased transparency for traders and investors to trade, execute and settle gold. RMG utilizes blockchain technology for its digital infrastructure, providing a cryptographically-secured alternative to buying, holding, and trading spot gold. The Royal Mint said that one RMG coin is equal to one gram of gold.
“We already sell physical gold through our Royal Mint Bullion business and we sell coins and bars,” Tom Coghill from the Royal Mint’s RMG division said. “In this sense what we’re doing here is simply making that a digital business and allowing for our clients to be able to hold gold for the first time on a blockchain basis.”
According to the World Gold Council (WGC), gold saw 13 percent growth in value in 2017- which by all accounts is a positive statistic, but it pales in comparison to the parabolic growth of bitcoin during the same time period. However, WGC said that gold would remain an important store-of-value investment.
Coghill claimed that bitcoin investments are more uncertain than investments in gold. “The difference between what we’re doing and what other crypto digital assets is that we’re a physical tangible asset,” he said. “One gram on our blockchain represents one gram physically in our vault. So it’s real gold you’re holding when you’re holding our RMG. Gold has probably had an argument that it’s been a store of value for 6,000 years, bitcoin’s a bit younger and the future of bitcoin is uncertain.”
Earlier this month, Perth Mint, Australia’s biggest gold refiner, revealed plans to develop its own gold-backed cryptocurrency in a bid to lure consumers back to investing in gold.