Capital markets News

Perth Mint to tokenize gold with InfiniGold on public Ethereum blockchain

gold bars

Yesterday, Aussie fintech firm InfiniGold announced the launch of a digital token backed by the gold stores held by the Perth Mint, one of the world’s largest precious metals refiners. The company said it would issue Perth Mint Gold Token (PMGT) as an ERC-20 token over a public Ethereum blockchain.

The Government of Western Australia owns the Perth Mint. Last year, InfiniGold launched a mobile app, GoldPass, for trading digital gold certificates issued by the Perth Mint. However, these certificates use proprietary technology and not blockchain.

InfiniGold’s announcement said each token will be backed 1:1 by GoldPass certificates. If they wish, consumers can redeem each GoldPass for a range of Perth Mint products or sell them back to the mint.

Market makers provide liquidity for the PMGT, but InfiniGold aims to take that a step further. The company said it plans to make PMGT directly tradable against traditional gold products, including gold ETFs, CME gold futures, and physical XAU. That’s subject to regulatory approval.

InfiniGold is marketing PMGT as an alternative to cryptocurrencies, which are known to be highly volatile. That’s in contrast to gold’s traditional safe-haven asset positioning.

“With The Perth Mint as custodian of the underlying physical gold that backs PMGT, buyers will be able to access a secure and reliable token representing the strongest asset class to date — gold,” said Andreas Ruf, CEO of InfiniGold.

“The digitization of gold via a public ledger is a natural progression for the global commodity markets. It will promote gold as a mainstream asset, enhance its accessibility, and offer greater liquidity, transparency and auditability of the real assets backing this type of digital token,” said Richard Hayes, CEO of The Perth Mint.

PMGT is unique as it is backed by the vast reserves of gold with the Perth Mint. Last month, Turkey’s Takasbank announced a blockchain-based gold trading platform. The platform uses tokenized units of gold-backed by physical reserves with Borsa Istanbul.

In Indonesia, the Jakarta Futures Exchange is working with Kinesis Money and Allocated Bullion Exchange to develop a platform for tokenized precious metals.

The UK’s Royal Mint also had plans to offer digital gold. But the project fell apart after the CME pulled out.

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