Aug 01, 2024 12:00

Yield-bearing Treasury-backed stablecoin USDY launches on Aptos

Stablecoin issuers are becoming some of the largest buyers of United States government debt at a time of increased de-dollarization.

Jul 28, 2024 12:00

RFK Jr. promises BTC strategic reserve, dollar backed by hard assets

The presidential hopeful praised Bitcoin eloquently as a future support for the US economy and a way to fix broken American money and society.

Jul 02, 2024 12:00

EU MiCA stablecoin regulations come into effect: Law Decoded

Noncompliant stablecoin issuers could potentially exit the EU market entirely, with a shift toward euro-backed stablecoins as demand picks up in European markets.

Jun 06, 2024 12:00

UAE central bank approves licensing system for stablecoins

KARM Legal Consultants founder Kokila Alagh said that the regulations clarify the issuance, licensing and supervision of dirham-backed payment tokens.

Jun 05, 2024 12:00

Zimbabwe central bank ironing out wrinkles in new currency

The new currency, an outgrowth of the governments gold-backed token, is performing well economically but receiving mixed public reviews.

Jun 22, 2024 12:00

What is Tethers gold-backed stablecoin, Alloy (aUSD)?

Alloy by Tether introduces a new class of digital assets called tethered assets, designed to track the price of various assets using robust stabilization mechanisms.

Jun 18, 2024 12:00

Tether launches gold-backed, US dollar stablecoin Alloy

The new synthetic dollar is the first step in the rollout of a real-world asset tokenization platform, said Tether.

May 08, 2025 02:30

Strike Unveils Bitcoin-Backed Loans: Unlock Cash Without Selling BTC

Strike, a Bitcoin payments platform, has rolled out a crypto lending service on its platform. This service enables both individuals and corporate users to borrow funds with Bitcoin as a collateral asset. Strike seeks to enable Bitcoin holders to obtain liquidity without the need to sell their digital assets. Strike Lending is only available for […]

May 08, 2025 05:55

The Future of Finance: Xapo Bank CEO Predicts Bitcoin-Backed Loans as the Next Big Move

Bitcoin-Backed Loans on the Rise, Says Xapo Bank CEO The CEO of Xapo Bank, a leading financial institution in the cryptocurrency space, has recently noted a significant increase in the demand for Bitcoin-backed loans. This trend suggests a growing interest in utilizing cryptocurrencies as collateral for borrowing funds. Bitcoin-backed loans provide an innovative solution for [...]

May 21, 2025 05:50

Fusion, Backed by Avalanche, Launches with $100M to Drive Blockchain Adoption

The Fusion Blockchain Initiative: $100 Million Investment in Modular Sector Networks The Fusion Blockchain Initiative has announced a groundbreaking investment of $100 million in developing modular sector networks. This strategic move aims to revolutionize blockchain technology by creating a more efficient and scalable network ecosystem. With the increasing demand for blockchain solutions across various industries, [...]

May 18, 2024 12:00

Binance-backed Magic Square IDO platform to democratize retail investor access

IDO launchpads are becoming a popular way to raise funds for projects, with some IDOs reaching nearly half a billion dollars.

May 16, 2025 05:55

VEREM Launches the First Emerald-Backed Token on TON Blockchain in Dubai

VEREM has officially launched its emerald-backed token on the TON blockchain, offering a secure and verifiable way to invest in RWA through blockchain.

May 16, 2025 05:55

Pareto Unveils Innovative Synthetic Dollar Backed by Private Credit

Pareto, a prominent player in the cryptocurrency space, has recently unveiled a groundbreaking initiative – the launch of a synthetic dollar backed by private credit. This innovative development represents a significant step forward in the realm of digital currencies, offering a new avenue for investors and enthusiasts to explore. The synthetic dollar, as the name [...]

May 13, 2025 06:00

Institutionally-Backed $100M Tokenized Fund Launched by US Real Estate Asset Manager

Real estate investment firm in the United States has introduced a tokenized fund with institutional support, marking a significant development in the blockchain and real estate sectors. This innovative approach to fund management leverages blockchain technology to tokenize assets, allowing investors to access real estate opportunities in a more efficient and transparent manner. By tokenizing [...]

Apr 22, 2025 12:05

Gold-backed vs USD-backed stablecoins: Key differences

What are gold-backed stablecoins, and how do they work?

Gold-backed stablecoins are digital currencies pegged to physical gold reserves and designed to maintain a stable value. The concept of gold-backed digital currencies dates back to the early days of cryptocurrency, with developers aiming to create a reliable store of value. 

Each gold-backed stablecoin represents a specific quantity of gold. For instance, one token might be linked to 1 troy ounce of gold. A troy ounce is a unit of weight used explicitly for weighing precious metals like gold, silver and platinum; it is equal to 31.1034768 grams. 

A third party typically holds the gold reserves to ensure security and transparency. The issuing entity is responsible for maintaining an equivalent amount of physical gold for every token in circulation. 

The token’s price remains closely aligned with the market value of gold. Buyers pay gold's spot price for a token. Similarly, if the stablecoin fails, the tokenholders can redeem their tokens for the gold. Practically, the gold is liquidated for electronic fiat transfers.

Regulators classify gold-backed stablecoins as commodity-backed stablecoins or asset-referenced tokens (ARTs), depending on jurisdiction. Examples of gold-backed stablecoins include Tether Gold (XAUT), Paxos Gold (PAXG) and Alloy (aUSDT).

Did you know? On April 1, 2025, Tether Gold (XAUT) traded at $3,165. Its market capitalization was about $780.3 million, with a daily trading volume of $11.03 million.

Advantages of gold-backed stablecoins

Gold-backed stablecoins combine the stability of gold with the flexibility of digital assets. Their blockchain-based nature offers benefits beyond traditional paper gold. 

Here are a few advantages of gold-backed stablecoins:

• Flexible alternative to physical gold: Gold-backed stablecoins function as blockchain-based representations of gold, offering a more efficient and flexible alternative to holding physical bullion. 
• Instant global trading: Unlike traditional gold ownership, these tokens can be stored in cryptocurrency wallets from which you can transfer instantly and trade globally with a nominal transactional fee.
• Access to DeFi applications: They also enable decentralized finance (DeFi) applications, expanding their usability beyond traditional gold investments.
• Better security: Physical gold is vulnerable to theft, loss and damage. Gold-backed stablecoins, stored on blockchain networks, can be more secure.
• Programmability: Gold-backed stablecoins are programmable because they exist on blockchain networks such as Ethereum. This allows them to interact with smart contracts and work with decentralized apps (DApps).
• Divisibility: Splitting physical gold or even paper gold is challenging. However, you can split a single token into several decimal places, which can be recorded on the blockchain.
• Make gold more accessible: Gold-backed tokens enable you to easily access gold. An ounce of gold may be expensive, but you can easily buy 0.001 of a token. 
• Interoperability: When you release a token on a widely used network like Ethereum, it is instantly operable with DApps, DeFi platforms and wallets supported by the network.

Diversification of funds: Investing in gold-backed stablecoins enables you to diversify your funds. It is a unique type of asset that protects you against currency value drops.

What are USD-backed stablecoins, and how do they work?

USD-backed stablecoins are cryptocurrencies designed to maintain a stable value by being pegged to the US dollar. Each token is typically backed by an equivalent amount of US dollars or cash-equivalent assets held in reserve by a financial institution or trust.

For every USD-backed stablecoin issued, the issuing entity must maintain a corresponding reserve amount to guarantee its value. This ensures that holders can always redeem their tokens for an equivalent dollar amount. Examples of USD-backed stablecoins are Tether (USDt), USDC (USDC) and Binance USD (BUSD), all of which are used in trading, payments and DeFi.

You can buy and sell stablecoins through crypto exchanges like Binance or Coinbase. To purchase, create an account, complete verification, deposit fiat or crypto and choose a stablecoin such as USDt or USDC. To sell, go to the trading section, select your stablecoin, and exchange it for fiat or another crypto. Some wallets and peer-to-peer (P2P) exchanges also support stablecoin trading.

Did you know? The EU's Markets in Crypto-Assets Regulations (MiCA) have forced crypto exchanges to delist USDT and other non-compliant stablecoins, resulting in a growing market for Euro-backed stablecoins. USDC continues to be a prominent USD alternative in the region.

Advantages of USD-backed stablecoins

USD-backed stablecoins offer several advantages, making them a critical part of the crypto ecosystem. By combining the reliability of fiat currency with the efficiency of blockchain, USD-backed stablecoins play a vital role in digital finance. 

Here are a few advantages of USD-backed stablecoins:

• Steady value: Unlike traditional cryptocurrencies, which experience high volatility, stablecoins maintain a steady value, making them an ideal unit for payments, particularly in exchange for goods and services.
• Liquidity and accessibility: USD-backed stablecoins are widely accepted across crypto exchanges, payment platforms and DeFi applications. This allows traders to move funds quickly between assets without converting crypto back to fiat currency, reducing transaction costs and delays.
• Transparency: Issuers generally provide regular audits and reports on their reserves, which enables users to verify that actual USD holdings back each token. This transparency builds trust among users, issuers and regulators.
• Fast, low-cost international payments: Operating on blockchain networks, USD-backed blockchain networks facilitate fast, low-cost international payments without relying on traditional banking systems. This makes them a preferred option for remittances and cross-border trade.
• Safe haven during market downturns: USD-backed stablecoins offer stability during periods of market volatility. Investors and traders often convert volatile crypto holdings into stablecoins to protect their value without exiting the crypto market entirely.

Still, please note that stablecoins may depeg occasionally because of several macro and microeconomic factors. 

Macro factors include changes in economic conditions, such as inflation or an increase in interest rates. Micro variables involve differences in market conditions, such as changes in the underlying collateral and problems with liquidity. 

When Silicon Valley Bank failed in March of 2023, the USDC stablecoin deviated from its peg because $3.3 billion of its reserves were held there.

Did you know? Stablecoins are of four types: fiat-collateralized, crypto-collateralized, algorithmic and commodity-collateralized. Algorithmic stablecoins have gradually gone out of favor.

Key differences between gold-backed and USD-backed stablecoins

Gold-backed and USD-backed tokens are stablecoins, yet they differ in several ways. This comparison explores the fundamental differences, focusing on their backing assets, price stability, liquidity, adoption and primary use cases:

Backing asset: Physical gold vs fiat reserves

Gold-backed and USD-backed stablecoins differ primarily regarding the collateral that supports their value. Gold-backed stablecoins are tied to physical gold, usually at a fixed ratio, while some USD-backed stablecoins are backed by a reserve of US dollars, short-dated and cash deposits.

Price stability: Long-term vs short-term

The value of gold-backed stablecoins fluctuates depending on the market price of gold, which can experience short-term volatility but tends to appreciate over the long run. USD-backed stablecoins maintain a 1:1 peg to the dollar, ensuring more predictable short-term stability. Their value remains steady unless external factors, such as regulatory changes or mismanagement of reserves, impact the peg. 

Liquidity and adoption: Use of USD-backed in DeFi applications

USD-backed stablecoins are more liquid and widely accepted in the crypto ecosystem, including exchanges, payment systems and DeFi applications. They are frequently used for trading and lending. Moreover, many countries in Latin America, such as Bolivia, have adopted USDC for payments. Gold-backed stablecoins, while useful for preserving value, are less commonly integrated into DeFi protocols due to low liquidity concerns.  

Use cases: Value storage 

Gold-backed stablecoins serve as a hedge against inflation, appealing to investors seeking growth. USD-backed stablecoins are preferred by investors seeking stability and value storage. USD-backed stablecoins are used for everyday transactions, trading and financial services, thanks to instant liquidity and ease of use.

Regulatory considerations: Compliance

Gold-backed stablecoins and fiat-backed stablecoins differ in regulation due to their underlying assets. For instance, specific regulations such as the Guiding and Establishing National Innovation for US Stablecoins Act (GENIUS Act) and the Stablecoin Transparency and Accountability for a Better Ledger Economy (STABLE) Act have emerged in the US for USD-backed stablecoins. However, no specific regulations exist for gold-backed stablecoins as of March 31, 2025, though they are expected to adhere to the usual banking and financial regulations.

Can gold-backed stablecoins surpass USD-backed coins in adoption?

Two factors favoring gold-backed stablecoins are their inflation-resistant properties and long-term stability. As Bitcoin advocate Max Keiser points out, gold enjoys greater global trust than the US dollar, particularly among nations with strained relations with the US. 

But is this enough for gold-backed stablecoins to get ahead of its more celebrated competitor?

USD-backed stablecoins, often under scrutiny in the days of the Biden administration, are now enjoying the support of the US government headed by President Donald Trump. The current dispensation views USD-backed stablecoins as a potent tool to maintain the status of the US dollar as the world's reserve currency. While the Trump administration has been crypto-friendly since it took over, its support of the GENIUS Act and the STABLE Act, which await Congressional approval, is further testimony of this approach.

Treasury Secretary Scott Bessent has emphasized stablecoins as a strategic tool for sustaining the dollar’s reserve currency status. Federal Reserve Governor Christopher Waller has echoed this sentiment, supporting stablecoins as a means to uphold US dollar hegemony.

Still, countries including Russia, China and Iran, arch-rivals of the US, might prefer gold-backed stablecoins over USD-backed stablecoins because the bullion-powered coins may help them limit the influence of the US dollar. According to Keiser, China and Russia collectively hold around 50,000 tons of gold, more than officially reported. If true, this gold could be used to roll out gold-backed stablecoins.

If gold-backed stablecoins gain wider adoption, they could challenge the US government’s efforts to maintain dollar dominance through stablecoins. To that end, stablecoin issuer Tether introduced Alloy (aUSDT) in June 2024, a gold-backed digital asset tied to Tether Gold (XAUT), a token representing claims on physical gold. 

Gold-backed stablecoins resemble the gold-backed US dollar before 1971. That was the year when President Richard Nixon abolished the convertibility of the US dollar to gold. XAUT has enjoyed a 15.7% price increase year-to-date, suggesting the growth potential of the bullion-backed stablecoins.

While gold-backed stablecoins present a compelling alternative, the battle for dominance between gold and USD-pegged stablecoins remains ongoing, influenced by geopolitical factors, financial policies, and market demand.

Apr 11, 2024 01:25

How Does a Bitcoin Loan Work?

Discover the mechanics, benefits, and risks of Bitcoin-backed loans. Understand how to use your Bitcoin holdings and lend them out for US dollars to your advantage.

Mar 30, 2023 06:55

Thailand SEC Eases ICO Restrictions

Thailand’s Securities and Exchange Commission (SEC) plans to lift restrictions on retail investment in initial coin offerings (ICOs). The SEC aims to permit bigger investments in asset-backed ICOs, including those backed by real estate and infrastructure. (Read More)

Apr 30, 2023 02:10

Zimbabwe’s De-Dollarization: Central Bank to Issue Gold-Backed Digital Currency in Early May

The Reserve Bank of Zimbabwe (RBZ) has said it will start issuing gold-backed digital tokens on May 8. The first phase of the launch will see the digital tokens being issued for “investment purposes with a vesting period of 180 days.” The RBZ also revealed that the gold-backed digital tokens “would be used both as [...]

The post Zimbabwe’s De-Dollarization: Central Bank to Issue Gold-Backed Digital Currency in Early May appeared first on Crypto Breaking News.

Apr 01, 2025 05:50

Final Push: Crypto PAC-Backed Candidates Rally Florida Voters

Florida Special Election Sees Candidates Supported by Crypto PAC In a recent special election in Florida, candidates backed by a cryptocurrency Political Action Committee (PAC) emerged as strong contenders. The involvement of the crypto PAC in the election has brought attention to the growing influence of digital assets in the political arena. The candidates supported [...]

The post Final Push: Crypto PAC-Backed Candidates Rally Florida Voters appeared first on Crypto Breaking News.

Mar 31, 2025 12:00

What are crypto-backed mortgages, and how do they work?

What are crypto-based mortgages?

Crypto-backed mortgages are a kind of loan where borrowers use their cryptocurrency holdings, such as Bitcoin (BTC) or Ether (ETH), as collateral to secure financing for real estate purchases. This approach allows you to access funds without selling your digital assets. By retaining crypto ownership, borrowers can still benefit from future price increases.

There are various types of crypto-backed mortgages: purchase mortgages, cash-out refinancing and bridge loans. 

• Purchase mortgages: These help you finance real estate using crypto as collateral. 
• Cash-out refinancing: It allows you to refinance your existing mortgages by leveraging your crypto assets to access additional funds. 
• Bridge loans: These loans provide short-term financing, helping you cover the period between purchasing a new property and selling an existing one.

Crypto mortgages are particularly appealing if you want to preserve your holdings while securing real-world assets. However, you need to consider the volatility of cryptocurrencies and carefully assess the risks before opting for a crypto-backed mortgage.

Lenders usually accept stablecoins such as Tether (USDt) and USDC (USDC) or major cryptocurrencies like BTC and ETH. Some lenders may accept a diversified portfolio of cryptocurrencies as collateral, which is known as cross-collateralization.

Did you know? With traditional mortgages becoming increasingly difficult to obtain, particularly for younger individuals, alternative solutions are gaining traction. Fintech startups are addressing this demand by offering adjustable or fixed-rate mortgages secured by substantial cryptocurrency holdings.

Crypto-based mortgages vs traditional mortgages

Crypto-backed and traditional mortgages differ from eligibility requirements to risk factors. Traditional mortgages rely on credit history, income verification and down payments, while crypto-backed mortgages use digital assets as collateral. 

The approval process for crypto mortgages is often faster, but they come with higher interest rates and volatility risks. Additionally, regulatory uncertainties make crypto-backed loans less widely accepted in real estate markets. A comparison of the two mortgage types is given below:

How do crypto-backed mortgages work?

The basic mechanism of crypto-backed mortgages is that depositors calculate the value of the crypto the borrower proposes to collateralize and release a loan against the amount. 

To assess the value of the crypto assets, the lenders may apply a loan-to-value (LTV) ratio, which indicates the percentage of the collateral value you can borrow. 

For example, if the LTV ratio is 50%, you can secure a loan of $25,000 for collateralized crypto assets worth $50,000. Overcollateralization helps to create a buffer, which helps the lender if the value of the collateral goes down. Smart contracts are used to automate the execution of loan terms. 

Here is a step-by-step look at the functioning of crypto-backed mortgages: 

• Step 1: Find a lender – Look for a financial institution or decentralized finance (DeFi) platform that offers crypto-backed mortgages. Compare different lenders based on their interest rates, fees and supported cryptocurrencies.
• Step 2: Apply and submit proof of ownership – Submit an application for getting a loan against the crypto you hold. You also need to provide proof of ownership of your digital assets. The lender will assess the worth of your crypto holdings to determine your borrowing limit. Some lenders may consider other financial factors, such as credit history.
• Step 3: Move crypto to escrow account – Once approved, you need to pledge the required amount of crypto by transferring it into an escrow account. This crypto acts as security for the mortgage loan. 
• Step 4: Prep the loan – Complete the loan agreement, which outlines key terms like repayment schedules, interest rates and what happens if your collateral’s value drops. Usually, if the value of the crypto drops, you will need to deposit more crypto in the escrow account so that the loan remains overcollateralized. If you fail to deposit additional crypto, the lender may liquidate your crypto deposits.
• Step 5: Disbursal of loan – The loan funds are typically disbursed in fiat currency for purchasing the property.
• Step 6: Make mortgage payments – Repay the loan according to the agreed terms. The interest rate may differ in line with the market value of the collateralized crypto.
• Step 7: Recover your collateral – If you complete all payments as per the loan agreement, you will get back your cryptocurrency from escrow. If you fail to repay it, the lender may liquidate your collateral to cover the outstanding amount.

Did you know? Freddie Mac data shows that when fixed-rate mortgages were introduced in 1971, interest rates were about 7.5%. However, by 1980, they had dramatically increased to almost 20%.

Benefits of crypto-backed mortgages

Thanks to crypto-backed mortgages, you can access funds to invest in real estate without selling digital assets. You can leverage your crypto assets to take advantage of real estate market growth. 

Here are some key benefits of using a crypto-backed mortgage:

• Faster and simpler process: Compared to traditional mortgages, crypto-backed loans generally have a quicker and more streamlined approval process. Lenders use smart contracts to execute loan terms, making the whole process efficient and without prejudice.
• Liquidity without selling: You can access funds to invest in real estate without liquidating your crypto holdings. This is particularly beneficial during a real estate market upswing as you can retain your crypto assets while securing finances for real estate investment.
• Investment growth potential: Crypto-backed mortgages enable you to enjoy double growth. You benefit from appreciation in the prices of the real estate and the growth of your crypto assets.
• Broader accessibility: Crypto-backed mortgages provide financing opportunities for anyone who lacks traditional credit histories. If you have just settled in a country and don’t have financial records there, crypto-backed loans become a viable option. 
• Tax benefits: Since no assets are sold, you can avoid immediate capital gains tax. This allows you to access value without triggering taxable events.

Challenges in crypto-backed mortgages

While crypto-backed mortgages offer some unique advantages, they also come with several challenges you must consider. From price volatility to regulatory uncertainties, these factors can impact the feasibility and cost of securing a mortgage with cryptocurrency. 

Here are some key challenges in crypto mortgaging:

• Higher costs: Compared to conventional mortgages, crypto-backed loans often have steeper interest rates. Since lenders consider these loans riskier, they set higher costs to protect themselves from potential losses.
• Price volatility: Cryptocurrencies are highly volatile, meaning their value can fluctuate significantly. If the value of the pledged crypto collateral drops, you may need to add more assets or partially repay the loan to prevent liquidation.
• Limited market adoption: Many sellers may not be willing to deal with a prospective buyer who has arranged their loan using cryptocurrencies. This might limit your property purchase options.
• Regulatory uncertainty: The legal framework for crypto-backed mortgages is still evolving. Shifting regulations could impact the availability, terms or tax treatment of these loans, creating uncertainty for borrowers.

Did you know? With $12.1 trillion in outstanding mortgage debt spread across 84 million loans, the average American mortgage holder owes $144,593. These home loans represent a massive 70.2% of all consumer debt in the US, highlighting their crucial importance to the nation’s financial health.

How to decide on a crypto-backed mortgage?

Before deciding on your cryptocurrency-backed mortgage, you need to make a thorough assessment of your financial status and risk tolerance. 

Begin by analyzing your cryptocurrency portfolio. Determine how much of your holdings you could pledge and consider how these assets may perform in the future. 

Given the volatility of cryptocurrencies, collateralizing a single asset may be risky. Diversifying your collateral across various cryptocurrencies may help avoid potential losses if prices fluctuate. 

You also need to carefully analyze the loan terms. Understanding the interest rates, payback plan and any other expenses related to the mortgage is essential. Consider the risks, such as asset liquidation if their value falls dramatically or if you fail to meet repayment terms.

As crypto-backed mortgages are a relatively new financial instrument, seeking professional guidance may help if you feel unsure about it. Consulting with financial and real estate experts specializing in crypto lending can assist you in navigating the process, structuring your loan and aligning your mortgage decision with your long-term investment and financial objectives.