Charles Cascarilla stands as the founder and CEO of Paxos, and gave a discussion last week regarding its growth of the gold-backed ERC-20 token of his firm: PAXG.
He gave this discussion during a panel within the London Bullion Market Association, and described, in general, the future of asset tokenization.
This future, according to Cascarilla, could very likely involve his company and its recently-announced integration with Paypal, the global financial giant.
Plans For A More Open Financial System
Cascarilla spoke alongside Raghav Chawla, the Director of Product Management of Fidelity Labs, and Sakhila Mirza from LBMA. In his discussion, Cascarilla explained to the viewers that Paxos’s vision made an asset-backed gold token a natural fit for the firm, describing it as downright logical for it to launch PAXG.
He described Paxos’ vision as trying to be the infrastructure for a global blockchain-based financial system, one more open than the current financial system.
The Benefits Of Tokenized Gold
Cascarilla highlighted an array of drawbacks affecting both gold-backed assets and physical gold itself exchanged within a traditional market. Of these drawbacks, he highlighted the high frictional costs and limited market hours, which is the mainstay when exchanging physical bullion.
Cascarilla, in turn, envisions tokenized gold, alongside other tokenized assets, as the future, citing its superior levels of transferability and liquidity. He further mentioned tokenized assets’ ability to be available 24-hours a day within the markets.
In regard to on-chain commodities, in general, he stated that the fact is, at least in his opinion, is that this trend is more of an inevitability than anything else.
Some Limiting Factors
However, Cascarilla highlighted a key barrier standing in the way of this new future: There is yet to have “inertia” establish itself when it comes to tokenized asset adoption. In other words, the industry has yet to build its momentum to gain market dominance.
As it stands now, Paxos alone has managed to tokenize approximately 37,000 ounces of gold, worth around $75 million in total. This stands as a very small part of a $7.3 trillion global market, however.
Cascarilla explained that the prerequisite steps are what primarily blunts the momentum of adoption. These steps include the choice to adopt blockchain, then choosing to use gold as the backed asset on-chain.
However, he is convinced that a 5-to-10 multiplayer regarding AUM is where the market for tokenized gold will really start to gain traction. Should this occur, tokenized gold will see its market push above the $1 billion mark.