• FTX users can now trade gold futures via the gold-backed stablecoin PAX Gold

For the first time, a major crypto derivatives exchange, specifically FTX in this case, has launched gold futures. Unlike other gold futures exchanges, the FTX gold futures use a blockchain token called PAX Gold, which represents actual gold stored in a vault.

PAX Gold is essentially a stablecoin, except instead of being backed by fiat reserves it is backed by gold reserves. Each PAX Gold token is backed by one troy ounce of gold stored in Brink’s vaults in London. Although the token is certainly not the first digital currency backed by gold, it is perhaps the most compliant gold token in history, since it is regulated by the New York Department of Financial Services.

The compliance of PAX Gold has opened the door for its use in officially regulated trading products, such as the gold futures now launching on FTX. Further, the success of the token raises the possibility that other commodities and equities could be represented by compliant blockchain tokens in the future and traded on officially regulated markets, which could set the stage for a blockchain-powered stock exchange of sorts.

 

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