According to reports, crypto investors will soon have the opportunity to buy gold and stocks in crypto. It will be the same way they buy Bitcoin (BTC). This is a welcome development for an industry in dire need of move investment and mainstream adoption. New York-based company Paxos, is sphere heading the charge to make this happen.
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Paxos Already Has a Dollar-backed Crypto
Paxos already has a dollar-backed crypto offering (known as a stablecoin). It also offers Bitcoin (BTC) trading services. Now per the report, the New York based company is looking to introduce a digital token backed by precious metals (gold) and publicly traded stocks this year.
It can be recalled from an earlier report that the company has already launched its stablecoin. The Paxos Standard is the dollar-backed offering from Paxos. It was launched six months back by linking cash reserves to a Blockchain. Now, Paxos is looking to take “any kind of asset and turn it into a Blockchain.
According to the company’s CEO Chad Cascarilla, in an interview with Fortune’s Balancing the Ledger:
“The goal is to trade assets and settle transactions in a faster way securely, with lower fees.”
Paxos Will Hold the Equivalent Sum (in any Form) of Inventory Before the Initiative Can work
To make the new initiative work, Paxos must hold the same sum of inventory (whether it is in USD, precious metals, or stocks) in the “real world” just as they are registered on the Blockchain. The CEO went on to say:
“… It will also depend on how many stocks we have sitting in our account, being equal to how many stocks you have in the Blockchain.”
The closest to reality is the tokenization of stock market bonds and equities, assets which Paxos has tested successfully in Blockchain transactions. “We’re getting very close, and I think we will see this in 2019.”
Paxos Only Crypto Firm With Depository Trust Company Account
According to Cascarilla, Paxos is the only crypto company that holds an account at the Depository Trust Company. The Depository Trust Company holds the majority of the U.S. stocks and bonds. This positions Paxos to be the first company to bring stock trading to the Blockchain. However, Paxos may still need additional approval from U.S regulators
The federal regulator, Securities and Exchange Commission (SEC) must give Paxos the go-ahead before it can launch a cryptocurrency that is tied to traditional securities. Paxos awaits approval from the SEC which is something the extended government shutdown didn’t help.
Cascarilla said placing commodities on the Blockchain will commence soon. Gold is the most obvious, and it would definitely be introduced this year, Cascarilla added.
Tokenizing precious metals comes with a number of advantages. It clearly opens up currently physically difficult possibilities like dividing a gold bar to smaller denominations, lending assets more efficiently and transporting heavy quantities more easily. Finally, Cascarilla said:
“Having gold in a vault and on the Blockchain bridges the two worlds.”