PMGT: The First ERC-20 Token Backed by Government-Guaranteed Physical Gold

Siamak Masnavi

On Friday (October 11), InfiniGold, an Australian blockchain startup focused on precious metals tokenization, and the Perth Mint, the world's largest refiner of newly-mined gold, jointly announced the launch of the Perth Mint Gold Token (PMGT).

In a press release issued by InfiGold and published on the Perth Mint website, we learn that PMGT, which is issued by InfiniGold, is an ERC-20 compatible token that is backed 1:1 by GoldPass certificates issued by the Perth Mint. Each GoldPass certificate is 100% backed with physical gold stored at the Perth Mint's network of vaults, with every ounce of gold in these vaults guaranteed by the Government of Western Australia.

In other words, PMGT represents tokenization of GoldPass certificates, which makes them "available on a public blockchain where investors, traders and institutions can buy and sell them on Digital Asset Exchanges." One PMGT token is equivalent to a "1 oz GoldPass certificate", which in turn is equivalent to one troy ounce of physical gold.

It is easily possible to exchange PMGT tokens for GoldPass certificates (and vice versa). Such exchanges are performed by InfiniGold.

Here is a summary of the benefits of PMGT: 

  • the underlying asset is government-guaranteed unlike all other existing gold-backed tokens, such as Digix (DGX);
  • zero transaction fees;
  • zero annual storage and management fees; (same is true for PAX Gold)
  • easily redeemable for physical gold

Although digitization of the Perth Mint's inventory started in 2018, when the GoldPass was launched. The GoldPass mobile app (which is only available in selected jurisdictions) lets investors to buy/sell physical gold via digital certificates. The app also makes it possible to instantly transfer gold to other users of the app. Finally, the app allow users to take physical delivery of their gold. The minimum investment is 0.001oz of gold.

It is worth pointing out that "the Perth Mint does not guarantee the InfiniGold issued Perth Mint Gold Token (PMGT) or its operation on the blockchain"; instead, what it does is "guarantees the gold securely held by it that backs all GoldPass certificates."

Richard Hayes, the CEO of the Perth Mint, had this to say:

We’re delighted to be working with InfiniGold and offer safe storage for the physical gold we will supply and hold, as our role as custodian through GoldPass certificates. The digitisation of gold via a public ledger is a natural progression for the global commodity markets. 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.

 

Featured Image Courtesy of InfiniGold Pty Ltd