The decentralized asset tokenization platform Theo has announced the launch of the gold stablecoin thGOLD, which simultaneously acts as a tokenized share of a fund that lends against gold bars.

Unlike stable digital coins pegged to the dollar or other fiat currencies, gold stablecoins like Tether Gold (XAUT) and PAX Gold (PAXG) do not offer direct built-in returns in the classical sense (meaning they do not have an equivalent of deposit interest). The main value lies in the peg to the price of gold, allowing investors to profit from the rising value of the precious metal.

The token thGOLD is also tied to the market value of gold but simultaneously allows earning on loans, said co-founder Theo Kwon (TK Kwon). The interest income from owning the stablecoin will be provided by the MG999 On‑ChainGold Fund managed by FundBridge Capital. The scheme works like classic shares on the stock market: investors will receive profits from the activities of the MG999 On‑ChainGold Fund, which issues loans to businesses secured by gold bars. According to co-founder Theo Abhi Pingle, holders of thGOLD can expect an annual yield of 2.3% excluding fees.

Theo plans to sell thGOLD on decentralized platforms Hyperliquid, Uniswap, Morpho, and Pendle. On these platforms, the token can be traded and used as collateral.

Gold is currently trading at historical highs: on Wednesday, January 28, the precious metal is priced above $5300 per troy ounce. Over the month, gold has increased in price by more than 17%, and over six months — nearly 60%. All of this increases interest in tokenized gold assets — the market capitalization of such products has reached a record $5.12 billion, writes The Block.

The founder of the world's largest cryptocurrency exchange Binance Changpeng Zhao previously criticized the idea of tokenized gold, stating that it is 'just a digital promissory note', and the precious metal still cannot compare to Bitcoin.