As Paxos continues to build the financial infrastructure for a more secure and open economy, we also continue to forge relationships across the crypto landscape to bring awareness and value to that vision.
As a founding partner in the recently launched Tokenized Commodities Council (TCC), Paxos is proud to collaborate with other esteemed colleagues in leading efforts to bring the benefits of tokenized commodities to the public’s attention.
Paxos, Diamond Standard and LODE to serve as TCC founding members
TCC’s founding members include Paxos, Diamond Standard and LODE. All are market innovators who are driving change in the industry, first through the development of an array of innovative products and services but also in their ability to communicate the advantages of tokenization and blockchain technology to industry stakeholders.
The announcement is timely as many in the crypto industry already see the potential benefits of tokenized assets for on-chain transactions, beginning with greater liquidity and access to fractionalization among investors. These are just a few reasons why some estimates show the total tokenized market could reach 10% of global GDP by 2030.
Charles Cascarilla, CEO and Co-Founder of Paxos, on TCC’s launch and what it means:
“Blockchain technology is revolutionizing the global financial system and will redefine how investors interact with high-value commodities markets. We believe that improving institutional and retail investors’ understanding of blockchain will significantly drive the adoption of tokenized commodities. We look forward to working with the Tokenized Commodities Council to drive impact in this space.”
TCC’s role in the tokenized marketplace
TCC is a not-for-profit trade association with a mission to educate the financial services industry on the benefits of tokenized commodities and the rapid growth of this new asset class. TCC seeks to educate investors, provide thought leadership and advocate on behalf of members to establish digitized commodities as widely accessible and desirable investments.
Touting tokenized assets’ efficiency and speed, TCC is also seeking to work with partners on sustainable industry practices, helping identify environmental, social, and governance issues and find solutions to address them. Among their highest priorities is addressing the industry’s impact on climate change, inspired by the shift to a low-carbon global economy.
The time is right for asset tokenization
Tokenizing assets allows for asset diversification without exposure to the higher volatility associated with other cryptocurrencies. With changing world events and market fluctuations seemingly more frequent, tokenized assets are seen as a safe haven asset, providing access to store of value.
Gold is an excellent example of an asset primed to be tokenized. It has the potential to be an inclusive asset, familiar and desirable to all, yet it’s currently not accessible to everyone. However, in a recent Paxos’ survey, we found 60% of gold investors were planning to purchase tokenized gold in the future.
One token of PAX Gold (PAXG) is backed by one fine troy ounce of gold, stored in LBMA vaults in London, offering investors a cost-effective way to own investment-grade physical gold with all the benefits of the blockchain.
Physical gold, which traditionally comes with high storage and shipping cost, is usually held in central banks and vaults, with investors accessing it through exchange-traded funds and futures markets. The allocated gold that backs PAXG is custodied in LBMA vaults and audited monthly – and PAXG owners keep the serial number stamped on the corresponding gold bar, giving them access to redeem their vaulted gold at any time.
TCC to help galvanize messaging and communication
Industry leading enterprises and investors are beginning to understand the potential of blockchain technology to help create digital assets that can move between the physical world and the emerging digital economy almost instantly.
However, to be successful, more business leaders – and their clients and customers – must be convinced of the reasons for tokenization. Though global adoption is promising, it remains uneven across regions – with some markets taking the early lead.
For tokenization to have an optimal impact, trust and security will need to be even more of a priority. With TCC bringing together some of the top minds in the industry to address the topic and solidify the message, we are proud to be part of that effort.
For TCC membership inquiries, upcoming events or to learn more about the financial benefits of tokenized commodities please visit their website.