Australian government-owned precious metal refinery The Perth Mint has partnered with InfiniGold — a crypto-startup focussed on digitizing precious metal. Together, they have launched Perth Mint Gold Token (PMGT).
Perth Mint Gold Token (PMGT) is an Ethereum-based ERC-20 token backed 1:1 with GoldPass certificates issued by The Perth Mint. To put it simply, imagine 1 PMGT token is equal to 1 ounce of gold.
InfiniGold did not launch the token as is. They partnered with Ernst & Young to test the token before the release.
InfiniGold’s CEO Andreas Ruf said:
“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.”
Together, InfiniGold and Ernst & Young worked on figuring out an effective management strategy for PMGT.
A Century Old Institution Following New Age Tactics
The Perth Mint was established back in 20 June 1899 and is a world leader in precious metal refining.
The Australian government-owned entity refines 330 to 340 tonnes, or 11 million ounces of gold a year — worth almost $21 billion at 2019’s market prices.
Now, that’s a lot of gold. Enough to place them as one of the major gold refiners in the world.
For such an old company to look into cryptocurrency is unheard of, making Perth Mint Gold Token (PMGT) quite interesting.
The token is backed by physical gold mints maintained by The Perth Mint. In many ways, purchasing a Perth Mint Gold Token is equivalent to buying physical gold — just without having to go through physical inconveniences.
A Win-Win For All
It is when both gold and cryptocurrency come together, we observe magic. The Perth Mint’s chief executive Richard Hayes has a similar view. He told ABC:
“If you use precious metals to back something on blockchain or something that is allied to blockchain, it retains its intrinsic value, unlike the offerings from Bitcoin and Ethereum, which really rely on everyone believing that there’s something behind it.”
Being backed by physical gold reserves means the token will be less volatile (as volatile as the gold prices can get).