Perth Mint gold token to modernise gold trading

TECH company InfiniGold has launched the Perth Mint gold token (PMGT), a digital token backed 1:1 by GoldPass certificates issued by The Perth Mint. The certificates are guaranteed by the government of Western Australia, and are intended to help modernise gold trading.
Perth Mint gold token to modernise gold trading Perth Mint gold token to modernise gold trading Perth Mint gold token to modernise gold trading Perth Mint gold token to modernise gold trading Perth Mint gold token to modernise gold trading

Perth Mint has said the certificates can be exchanged for real physical gold

Elliott Holley

"The digitisation of gold via a public ledger is a natural progression for the global commodity markets," said Perth Mint chief executive Richard Hayes.  

"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."

The tokens give users exposure to gold stored at the Perth Mint, and can be traded in real time. Settlement is done using blockchain technology.

According to InfiniGold, PMGT offers owners superior transparency, credit quality, risk diversification and hedging against market volatility as the token represents physical gold, which has historically been much more stable and a well-understood store of value than other digital assets such as Bitcoin.

Market makers provide liquidity (i.e. they will effectively guarantee to trade, barring exceptional circumstances) on the Perth Mint GoldPass platform, where users can sell back to the Perth Mint, or take delivery of their holdings by exchanging their GoldPass certificates for physical gold products such as London Good Delivery bars.

GoldPass was launched in 2018, allowing investors to buy, sell and transfer physical gold using a mobile app.

Perth Mint gold tokens are issued by InfiniGold and are ERC-20 compatible. ERC-20 is a technical standard used for smart contracts on the Ethereum blockchain.

Subject to regulatory consultation, the intention is that PMGT will be tradeable against gold ETFs, CME gold futures and physical XAU. 

Ernst and Young worked with InfiniGold to perform a findings and recommendations report on the design effectiveness of the procedures and controls over the PMGT platform.

"We chose to proactively work with EY to implement strong procedures and controls around the PMGT platform well before go-live as we know effective management of digital assets risks is critical to our investors and we felt EY were best placed to assist us," said InfiniGold chief executive Andreas Ruf.