Digix's DGX token, which represents ownership of physical gold, moved into BitGo's custody platform today. The addition marks growing institutional interest in digital assets backed by precious metals
Digix's DGX token, which represents ownership of physical gold, moved into BitGo's custody platform today. The addition marks growing institutional interest in digital assets backed by precious metals.
One DGX token equals one gram of gold. London Bullion Market Association-approved refiners certify each bar as 99.99 percent pure. Digix, based in Singapore, stores the underlying gold in vaults there and allows token holders to redeem their DGX for physical metal.
"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," said Kai C Chng, Digix's CEO.
BitGo, which handles transactions from its California offices, processes 15 percent of all global Bitcoin trades. The platform moves $15 billion in cryptocurrency monthly. The custody provider now supports over 90 digital assets, including Bitcoin, Ethereum, Bitcoin Cash, Litecoin, and Zcash. BitGo holds $2 billion in assets across its platform.
In October, BitGo closed a $60 million funding round led by investors including Goldman Sachs, Mike Novogratz, Valor Equity Partners, Craft Ventures, DRW, and Redpoint Ventures. The money will support development of what BitGo describes as a $1 trillion crypto wallet designed to attract institutional investors.
"No one is better positioned than BitGo to serve institutional investors who want to trade cryptocurrencies and digital assets," said BitGo CEO Mike Belshe.
BitGo also unveiled Wrapped Bitcoin (WBTC), an ERC20-powered token that lets exchanges trade Bitcoin-backed assets on Ethereum. BitGo provides custody for the underlying Bitcoin and mints the WBTC tokens in coordination with community members. "It's an exciting opportunity for us to build on our mission: making digital currencies usable for business," the company said.
This integration launches amid growing interest in cryptocurrency backed by gold. The Royal Mint in Britain abandoned its plans this month after a partnership with CME, the U.S. exchange operator, fell apart and the British government blocked listing on crypto exchanges. Perth Mint in Australia and the Royal Canadian Mint launched digital gold offerings this year with greater success.
Cryptocurrency pegged to gold lets investors access the metal's long-standing value store without the friction of moving physical bars. When gold trades as a digital token, it becomes a liquid asset, and buyers avoid the premiums and shipping costs associated with holding bars or coins in hand.
