In an interview with Joe Kernen of CNBC, Mark Mobius suggested that Crypto must be backed by Gold for it to have an intrinsic value. In a surprising co-incident, Paxos announced the launch of its regulated Gold-backed cryptocurrency on the same day.
The fund manager and founder of Mobius Capital was skeptical about the entire blockchain system standing on its own. His understanding of the system came about quite like someone who has been newly introduced to the system. He said,
If there is a cryptocurrency that is really backed by Gold — and that is, there is a meaningful agreement and some kind of modern thing of this connection — then this could be quite interesting.
He also warned the people that somewhere in the future, Blockchain could be hacked as well. Bitcoin and Crypto would than face an existential crisis. Nevertheless, until that happens, trust in Bitcoin seems to be growing enormously this year.
Moreover, Kerner also argued that since no FIAT is backed by Gold as well, then that it should extend to Bitcoin as well. Mark conceded to the fact that “faith” is another factor for intrinsic value. He also suggested that Crypto is even driving the price of hard assets such as Gold.
Paxos Releases a Gold Backed Crypto
Coincidentally, on the same day, Paxos issued a regulated gold-backed cryptocurrency. It will go live by the end of September 2019. Paxos, formerly known as iBit Company LLC, is a Financial Services company that aims to bridge the gap between traditional assets and cryptocurrencies. It also operates the iBit Exchange which provides an online portal for trading crypto.
The token, PAX GOLD, will represent “one fine troy ounce of London Good Delivery gold stored in vault facilities in London.” The CEO and Co-Founder of Paxos,