The market for tokens linked to the price of gold has reached a total capitalization of $1.02 billion.
PAX Gold and Tether Gold are the two dominant players in this market, accounting for 99% of the tokenized gold capitalization.
These tokens provide a stablecoin option but are not pegged to fiat currency. Instead, their value is tied to the market value of gold.
PAX Gold (PAXG) currently has a market capitalization of $523M, while Tether Gold (XAUt) has a market capitalization of $499M.
The closest competitor, Perth Mint Gold (PMGT), only has a capitalization of $2.46 million.
The growth in the capitalization of “golden stablecoins” is not surprising, given the rising value of the underlying asset.
Currently, an ounce of gold is selling for $2,048, which is the highest value in the history of trading.
The Paxos Trust Company, based in New York, is behind the PAX Gold tokens, while Tether Gold is issued by Tether.
Interestingly, the distribution of gold-pegged stablecoins varies across different platforms.
PAXG has the highest trading volume on Kraken and Binance, whereas Bitfinex is dominated by XAUt traders.
Both tokens are also traded on the decentralized Uniswap platform, but liquidity is noticeably lower there.
While the current capitalization of tokenized gold stands at $1 billion, it has exceeded this figure slightly in the past.
However, as with the fall of the cryptocurrency market, the capitalization of gold stablecoins has also decreased.