"We will issue gold and silver tokens in the third quarter of this year and plan to list them on an overseas virtual asset exchange within the year, followed by listings on domestic virtual asset exchanges in the first half of next year. The goal is to introduce digital K-gold to the virtual asset market at a level that surpasses Tether Gold (XAUT)."
Lee Sang-yoon, head of Korea Gold Exchange Digital Asset, said the company will launch real world asset (RWA) tokens linked to physical gold and silver within the year. Korea Gold Exchange Digital Asset is a grandchild company of ITCEN GLOBAL. ITCEN GLOBAL holds 67.3% equity each in Korea Gold Exchange Digital Asset and Korea Gold Exchange through a special purpose company (SPC; Special Purpose Company), KG E Holdings. While Korea Gold Exchange handles distribution in the offline market, such as jewelry shops, Korea Gold Exchange Digital Asset connects financial services online using the physical gold as collateral.
Last year, in partnership with Hana Bank, it introduced the "Hana Gold Trust," a product that allows customers to deposit physical gold at the bank and earn interest without paying storage fees. To issue virtual assets tokenized on a 1:1 basis with physical assets, it also applied for trademarks for gold tokens such as ▲KGLD ▲CENG ▲KRWgc ▲USDgc and silver tokens such as ▲XAGC ▲XAGT ▲KSVR ▲CENS.
After graduating from Hankuk University of Foreign Studies, Lee joined global IT (information technology) corporations including IBM, Oracle, and Dell before becoming chief strategy officer (CSO; Chief Strategy Officer) at ITCEN GLOBAL in 2021. At the company, Lee is leading the shift in the business model and new businesses including Web3. The following is a Q&A with Lee.
─Why is gold drawing attention in the RWA market?
"Gold's long history proves its credibility. The world's gold totals about 220,000 tons (t), and annual new mining is limited to about 1.8% of the total. But gold poses storage challenges. If physical gold is put on-chain (a network on the blockchain), the actual gold is safely stored in a vault and investors are freed from the burden of theft, loss, and storage expense. We verified these advantages with the Hana Gold Trust product launched with Hana Bank. We confirmed that when gold is connected to financial infrastructure, there is demand."
─You described the gold token as a household asset.
"Until now, gold has been a storage asset. You cannot buy goods with gold, and it does not generate interest. It is closer to a store of value. Tokenizing gold means converting it into a digital financial asset that can generate revenue. Using gold tokens, one can borrow against gold as collateral in an on-chain environment and also earn interest income through staking (deposit). This year, we plan to launch the "Gold Standard Wallet" application (app), a gold-backed account based on RWA. This service allows users to earn 1%–3% annual interest income by depositing gold tokens and offers stablecoin loans backed by gold collateral."
─What strengths does K-Gold (KGLD) have?
"Tether Gold purchases gold in the London spot market, stores it in secure Swiss vaults, and issues tokens based on that. K-Gold stores gold at Korea Gold Exchange and then issues tokens. From an issuance perspective, it has the advantage of relatively fewer constraints. K-Gold can be converted into physical gold in Korea at any time.
Over the next five years, we plan to issue 50 t of physical gold as K-Gold and build a 10 trillion won digital gold finance ecosystem. Based on Korea Gold Exchange's physical gold, we have already integrated the entire process from distribution and storage to transaction into a single digital supply chain."
─What are the issuance plans for K-Gold and K-Silver (KSVR) tokens?
"We plan to issue K-Gold and K-Silver tokens as early as the third quarter of this year. This year, we will list them on overseas virtual asset exchanges and, after confirming marketability, attempt to list them on domestic exchanges such as Upbit in the first half of next year. The daily transaction volume of Tether Gold currently listed on Upbit is about 10 billion won. Annualized, that is about 3 trillion won. We are confident we can more than surpass Tether Gold.
There has been no case so far of a silver token being listed on exchanges worldwide. We expect K-Silver to gain more popularity in the market than K-Gold. Physical silver has diverse uses, including in semiconductor panels and renewable energy."
─What are the future goals of Korea Gold Exchange Digital Asset?
"We are conducting joint Korea-Japan research on stablecoins with JPYC, a leading corporation in yen-based stablecoins. Starting this year, together with JPYC, we will create a cross-border payment standard that links "yen-gold-won." After K-Gold is established, we will broaden the RWA scope to commodities and real estate and expand the business into "data-based RWA (Data-as-a-RWA)," which tokenizes valuable information."