BitGo Adds First Gold-Backed Digital Asset as Demand for Crypto Pegged to Gold Increases
Digix's gold-backed digital token has been added to crypto custodian BitGo as demand increases for cryptocurrency to be pegged to the value of gold.
Announced today, DGX has been added to BitGo's Digital Currency Support with Enterprise Access.
DGX is a token that is backed by 99.99 per cent gold cast bars from London Bullion Market Association-approved refiners. One token equals to one gram of gold. Singapore-based Digix sells DGX, which are redeemable for gold in well established vaults in the country.
On the news of the addition to BitGo, Kai C Chng, CEO of Digix, said: "Having this integration places DGX on an industry recognised platform and would be a springboard for DGX to be listed on other major exchanges as we head into Q4 2018."
As the world's largest processor of on-chain Bitcoin transactions, California-based BitGo processes 15 per cent of all global Bitcoin transactions, amounting to $15 billion worth of cryptocurrency processed each month. Holding more than $2 billion in assets, BitGo supports over 90 cryptocurrencies, including Bitcoin, Ethereum, Bitcoin Cash, Litecoin, and Zcash.
Earlier this month, BitGo raised nearly $60 million in funding from the likes of Goldman Sachs, Bitcoin bull Mike Novogratz, Valor Equity Partners, Craft Ventures, DRW, and Redpoint Ventures, to support the development of its $1 trillion crypto wallet.
The aim is to attract more institutions and wealthy customers who are seeking new ways to securely hold their assets. Mike Belshe, CEO of BitGo, noted that "no one is better positioned than BitGo to serve institutional investors who want to trade cryptocurrencies and digital assets."
BitGo has also announced the integration of an ERC20 powered Wrapper BTC for exchanges, enabling platforms to swap ERC20 tokens against BTC on a wrapper contract. BitGo said that it "will provide custody of the Bitcoin and tokenise it by minting WBTC together with approval from community members. It's an exciting opportunity for us to build on our mission: making digital currencies usable for business."
News of DGX being implemented into BitGo comes at a time when there is increasing demand for cryptocurrency to be pegged to the value of gold.
Last week, it was reported that Britain's Royal Mint had to shelve its plans to launch a digital gold token after a failed partnership with CME, a U.S. exchange group, and the government blocked a plan to have the tokens trade on a cryptocurrency exchange.
More successful, however, were Australia's Perth Mint and the Royal Canadian Mint who are involved with digital gold products that launched this year.
According to Digix, cryptocurrency pegged to the value of gold will combine the historical value of it with the modern efficiency of digital currency. Additionally, as gold in the form of tokens is a liquid asset, buyers won't be hit by unfair prices and fees that come with moving physical gold around.
About Rebecca Campbell
Rebecca Campbell is a freelance bitcoin and blockchain journalist based in England. She has a keen interest in the digital currency market and the use cases that the blockchain is being used in and is excited to see the disruptive changes that the technology is delivering in our day-to-day lives.