Blockchain trust company Paxos will launch digital token backed by precious metals “definitely this year,” Paxos CEO, Chad Cascarilla told in an interview with Fortune’s Balancing the Ledger on March 11.
“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,” Cascarilla explained.
Cascarilla did not specify what kind of metals the new cryptocurrency will be backed, however, most likely it will be gold. Paxos CEO highlighted that the company will keep the amount of precious metals equivalent to the value of the issued coins:
“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.”
Cascarilla underlined that the firm’s status as a financial institution allows Paxos to use the banking system to ensure that the amount of stored assets corresponds to the amount of assets in the blockchain.
Speaking about Paxos Standard (PAX) — the firm’s Ethereum (ETH)-based stablecoin backed 1:1 by the U.S. dollar and launched last September — Chad Cascarilla stated that it differs from other stablecoins in that it is fully audited, highly regulated and approved by the New York State Department of Financial Services (NYDFS), and relatively liquid.