Kitco Gold will be backed by physical gold stored in vaults and track the real-time market value of the yellow metal.
Canadian precious-metals retailer Kitco is getting into the stablecoin game.
According to a press release shared with CoinDesk on Wednesday, Kitco Gold (KGLD) will be fully backed by physical gold held in Kitco’s DirectReserve vaults and track the real-time market value of the yellow metal.
The exact date to begin trading KGLD has yet to be set, but will be in the coming weeks, according to a spokesperson.
Hong Kong’s First Digital Trust will provide regulatory compliance, know-your-customer and anti-money laundering procedures, funds processing and final authorization. Stablecoin issuer Stably will provide smart contract technology for minting and burning KGLD on the Ethereum network while Tradewind Markets will assist in settlement.
The ERC-20 stablecoin attempts to combine the safe-haven nature of owning gold with the flexibility and transparency of digital assets, Kitco said.
Kitco is a global retailer and provider of precious metals news and data used by millions to access the market prices of gold, silver and palladium among others. Users will gain access to the digital equivalent of Kitco’s depositories and vaults, audited to industry standards, per the release.
John Dourekas, chief business development officer at Kitco Digital Metals Group, said KGLD represents a digital receipt of physical gold ownership and provides institutional investors with a “robust” asset class.
“Investors will have a competitive alternative to traditional gold products such as gold ETFs, with the additional benefits of real-time trading and settlement enabled by blockchain technology,” Dourekas said.
Kitco’s entrance to gold-backed stablecoins follows Paxos Gold and Tether Gold, which launched in 2019 and 2020 respectively. Though Kitco’s endeavor comes later, market participants will likely welcome the gold bug’s attempt to pry some of the market share from dominant stablecoin issuers, Kitco said.
source of news:coindesk