Stablecoins can be classified in 6 groups based on what kind of assets they are backed by
6 Types of Stablecoins (based on what they are backed by)
1. Stablecoins backed by fiat currencies
2. Stablecoins backed by hard currencies
3. Stablecoins backed by cryptocurrencies
4. Stablecoins backed by financial products
5. Commodity-backed Stablecoins
6. Algorithmic Stablecoins
The 6 Types of StablecoinsThis thread is about #2, Stablecoins backed by hard currencies (in particular by gold)
What are gold-backed cryptocurrencies"Gold-backed cryptocurrencies are tokens designed to represent a specific amount of physical gold holdings in a digitalized format, which also can be redeemed by the holders whenever needed.
These tokens offer a unique investment option by combining the stability of gold with the innovation of digital currencies.
The operation of gold-backed cryptos is straightforward: a designated amount of gold is securely stored, and an equivalent number of crypto tokens is issued. Transparency is crucial, with reputable issuers providing regular audits and proof of gold reserves.
Transactions with gold-backed cryptos are conducted on blockchain technology, ensuring secure, immutable records of ownership and transfers. This feature, along with lower operational costs compared to physical gold handling, makes them appealing for global investments.
Investors benefit from the ease of transferring these digital assets internationally, bypassing the complexities of physical gold logistics."
creditcoin.org