https://medium.com/datadriveninvestor/should-you-invest-in-a-cryptocurrency-backed-by-gold-a75495128a64
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After the crypto bubble of 2017, I was worried about storing my wealth in the form of cryptocurrencies. Every day some news would break out about some latest crypto scam or that some government outlawed cryptocurrencies.
It felt like the 90s all over again. Not that I was alive back then, but stories suggest no one knew what they were investing in. Everyone wanted a piece of the pie, everyone wanted to ‘get rich quick’. This hype around crypto gave birth to a lot of fake coins, Ponzi schemes, and crypto scams.
Fast forward 3 years and governments are embracing cryptocurrencies. India’s Supreme court overturned the crypto ban by the Reserve Bank of India. The Commercial Court of Nanterre, in France, ruled that Bitcoin is a legal form of currency.
One such crypto that caught my eye is PMGT, Perth Mint Gold Token. It is a stable coin, backed by the government, and thus trustworthy.
The Perth Mint Gold Token (PMGT) is the first digital gold token on a public blockchain ultimately backed by government-guaranteed gold.-PMGT
Cryptocurrencies are highly volatile, for instance, in three months from October 2017 to January 2018, [the volatility of the price of bitcoin reached nearly 8%](https://www.investopedia.com/articles/investing/052014/why-bitcoins-value-so-volatile.asp#:~:text=Bitcoin's value has been historically,period ending January 15%2C 2020.).
If you store your wealth in an asset like that, it's hard to get a good night's sleep.
A stable coin is a cryptocurrency backed by another asset, this asset can be anything from precious metal to fiat currencies.
Stable coins float around the price of the asset it is pegged to. Some famous stable coins are Tether, backed by USD; DAI backed by Ethereum, Yes! crypto can also peg to another crypto; JPM (JP Morgan Coin) backed by USD.
Stable coins have certain benefits that do not exist with traditional assets and even some cryptocurrencies.