Market Overview

Crypto Gold — new stablecoin on the market

It’s physical gold. It’s crypto. It’s government-backed. It’s a new product from a Silicon Valley company mutating gold and crypto into a single unit. And it’s as deeply fear-soaked as anything since, well, 2020.

Today Uphold, a digital investment platform based in San Francisco, announced what it calls “a better form of gold”: Universal Gold. Users can buy the gold crypto UPXAU — a token verifiable on the Ethereum blockchain and audited by the security firm CertiK — and Uphold instantly contracts to buy physical gold from the Government of Western Australia.

From that moment, the investor owns the gold. She can spend parts of it using her Uphold credit card, or take physical delivery: Uphold will send the FedEx FDX -2.3% guy with the click of a mouse.

UPXAU is to crypto finance what “clicks and mortar” was to e-commerce, a simultaneous merger of the digital and the physical. It all started back in March, when one of Uphold’s investors, a dyed-in-the-wool gold bug, stumbled upon GoldPass, an Australian government program issuing certificates that guaranteed physical delivery of gold. He immediately called Uphold CEO J.P. Thieriot who used the program to create the Universal Gold token.

“The gold is held with the Perth Mint, the largest refiner of new gold in the world,” says Thieriot. “The mint issues a gold certificate, one token equals one certificate which equals one ounce. One-to-one-to-one. When you buy the token, you’re buying gold. It’s not hypothecated, it’s not fractional. You’re buying gold.”

Thieriot hopes this appeals to paranoid gold bugs who have long wrestled with the problem that buying physical gold is hard to do. It’s expensive to store, often incurring monthly custody fees of around 0.4%, and has traditionally been expensive to liquidate and turn into cash.

During 2020, the ranks of the fearful have grown. And have you read a newspaper lately? Those ranks are surely still growing. No surprise gold is up 26% this year and Bitcoin has risen 55%.

Gold might be the exception to the rule that, in the end, the purpose of a tool is to be useful. In the end, it may be that the value of Bitcoin, Ethereum, XRP and others will lie in their functionality — not just the idea that some other moron will show up and pay more for it.

But for investors right now, liquid assets with limited supply are all the rage, be they Bitcoin or gold. Or, today, Universal Gold.

Crypto Gold — It’s A Thing! New Stablecoin Checks All The 2020 Fear Boxes, Forbes, Jul 31

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