Elemental Royalty signaled on Tuesday that investors will be able to receive dividends in the form of Tether’s XAUT, establishing a novel use case for tokenized gold on Wall Street.
The company’s investors can still receive distributions in cash, as is traditional. But Elemental CEO David Cole described the company’s support of Tether’s product as innovative.
“The decision to offer investors a dividend in kind, in the form of Tether Gold, further differentiates Elemental as a forward-thinking, growth-oriented investment,” he said.
Tether’s legacy was built on tokens pegged to the U.S. dollar, but the stablecoin issuer has embraced tokenized gold as the precious metal’s price has surged 66% over the past year. Meanwhile, XAUT’s market capitalization has swelled to $2.5 billion from $714 million.
Those moves were focused on consumers, but Elemental shows how tokenized gold can be used as a tool in real-world corporate finance, according to Tether CEO Paolo Ardoino.
At a market capitalization of $2.2 billion, Tether’s XAUT faces competition from PAX Gold. The products debuted within months of each other more than six years ago.
Despite their time in the market, Wintermute is among market makers that have only recently moved to support the token. Last week, the company said that it had begun executing over-the-counter trades in XAUT and PAX Gold on behalf of financial institutions.
The firm that handles billions of dollars in daily trading volume noted that there is robust demand for trading tokenized gold round-the-clock amid de-dollarization pressures. Along those lines, the company forecast that tokenized gold could become a $15 billion market by year-end.
