Paxos

As the price of gold is on the cusp of breaking its April peak, the market size of crypto tokens backed by the precious metal has already surged to fresh all-time highs.

The overall market capitalization of tokenized gold topped $2.57 billion, CoinGecko data shows, as the two leading offerings, Tether’s XAUT and Paxos’ PAXG tokens, saw sizable inflows recently. Both tokens’s are designed to track the price of gold and are backed by physical bars held in vaults.

XAUT (XAUT), issued by the firm that’s behind the USDT stablecoin, saw a $437 million jump in its supply to a record $1.3 billion, per CoinGecko. Tether’s Treasury minted 129,000 tokens in early August on the Ethereum network, blockchain data by Etherscan shows.

PAXG (PAXG), the gold-backed token of U.S.-based stablecoin firm Paxos, swelled to a record market size of $983 million, DefiLlama data shows. That’s been fueled by $141.5 million net inflows into the token since June.

PAXG inflows per month (DefiLlama)

Gold currently traded at around $3,470, just shy of the April 22 peak hit amidst the tariff tantrum.

The precious metal, which is widely considered as a safe haven asset during times of uncertainty, has been resurging lately, driven by a steepening U.S. Treasury yield curve.

Read more: Gold’s Rally Has a Big Catalyst, and It Could Help Bitcoin Too

Source link

Circle and Paxos have launched a pilot system to verify stablecoin issuers and block counterfeit tokens, aligning with new U.S. regulatory standards.

Summary

Circle and Paxos pilot a cryptographic system to verify stablecoin issuers.
The initiative aligns with the U.S. GENIUS Act for federal oversight of stablecoins.
It aims to prevent counterfeit tokens, boost trust, and drive stablecoin adoption.

According to an Aug. 27 report by Bloomberg, Circle Internet Financial and Paxos Trust Company have begun a pilot program for a new “know-your-issuer” system. By verifying the legitimacy of stablecoins at the time of issuance and transaction, the initiative aims to address long-standing concerns about counterfeit tokens.

How the system works

The verification tool, which was developed in partnership with the fintech startup Bluprynt, embeds cryptographic proof-of-issuer credentials directly into stablecoin transactions. Thus, it would be possible to track down the verified issuers of USD Coin (USDC), PYUSD, and USDP tokens issued during the pilot in real time.

The system removes the need for third-party audits and stops “copycat” tokens, which mimic genuine stablecoins but lack the necessary reserves or regulatory clearance.

Early testing showed that the system could seamlessly integrate across multiple blockchains, giving regulators and issuers a clear picture of the origins of tokens. The main objective of the pilot was to reduce the risks related to fraudulent stablecoins, a growing issue brought to light by companies such as Chainalysis.

Broader impact and regulatory context

The pilot closely aligns with the recently passed GENIUS Act, which sets federal standards for dollar-backed stablecoins. Lawmakers anticipate this framework will speed up adoption and potentially push stablecoin usage into the trillions, given the market’s current valuation of roughly $273 billion.

Circle and Paxos are both setting up shop to function under a single federal regulator. On Aug. 11, for example, Paxos reapplied for a national trust bank charter to grow beyond its license from the New York Department of Financial Services.

The KYI model may also apply to other GENIUS Act-compliant tokens that rely on tokenized U.S. Treasuries, like Ethena’s USDtb and Frax Finance’s frxUSD. The tool enhances investor trust and DeFi integrations while also assisting regulators by embedding provenance at the protocol level.

Source link

Tokenized Gold Market Tops $2.5B Led By Tether, Paxos Tokens

Circle, Paxos pilot system to fight counterfeit stablecoins

How the system works

Broader impact and regulatory context