Elemental Royalty Corporation (ELE) will now offer shareholders the option to receive dividends in the form of Tether Gold (XAUT), a blockchain-based token backed by physical gold, the Canada-based royalty company announced Tuesday. This marks the first time a publicly listed gold company has provided shareholders with this option, according to a company press release.
Shareholders who elect to receive dividends in XAUT will be provided with exposure directly tied to the price of gold, with the added benefit of digital settlement. The move follows Tether’s acquisition of a one-third stake in Elemental Royalty last year.
The total market capitalization of tokenized gold has exceeded $5 billion, with XAUT currently holding the largest share of both volume and supply within the sector, according to Tether. The growth in this asset class has largely been driven by retail investors seeking access to gold investments without relying on traditional custodians or intermediaries.
Tether’s tokenized gold, XAUT, is designed to represent ownership of one troy ounce of physical gold held in a Swiss vault. Each XAUT token is fully backed by physical gold and is redeemable for delivery of the underlying gold, subject to certain conditions. The company states that XAUT aims to combine the benefits of physical gold ownership with the convenience and liquidity of digital assets.
According to a recent report cited by Google News, Tether’s gold reserves have surpassed $23 billion, with purchases outpacing those of nation states. This increasing demand for tokenized gold reflects a growing interest in digital assets backed by tangible commodities.
Elemental Royalty’s decision to offer gold-backed dividends in XAUT is expected to appeal to investors seeking diversification and a hedge against inflation. The company believes that this innovative approach will attract a broader investor base and enhance shareholder value.
