Global precious metals retailer Kitco to launch gold-backed stablecoin

The Canadian company Kitco, a global retailer of precious metals, announced the launch of a gold-backed stablecoin. CoinDesk reports, citing the firm’s press release.

According to the statement, Kitco Gold (KGLD) will be fully backed by physical gold held in Kitco DirectReserve vaults. The asset’s price will track the metal’s market value in real time.

The issuer of the stablecoin will be the Stable project, which will provide smart-contract technology for issuing and burning tokens on the Ethereum network. The Tradewind Markets platform will assist with settlements.

First Digital Trust of Hong Kong will provide compliance services, implement Know Your Customer (KYC) procedures, anti-money laundering (AML) measures, processing, and ensuring ownership rights.

The head of business development at Kitco Digital Metals Group, John Dorekas, said that KGLD represents a digital receipt of ownership of physical gold and will provide institutional investors with a ‘reliable’ class of assets.

“Investors will have a competitive alternative to traditional gold-based products, such as ETFs, with additional advantages of trading and real-time settlements enabled by blockchain technology,” said Dorekas.

The exact start date for trading KGLD has not yet been set; Kitco expects it to occur in the coming weeks.

In 2019, Pax Gold (PAXG), an Ethereum-based gold-backed stablecoin, was launched by Paxos.

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