FrankenCoin has expanded its collateral options, officially approving the use of gold-backed tokens PAXG and XAUt for minting its native ZCHF stablecoin.

The decision allows users to deposit Paxos Gold (PAXG) or Tether Gold (XAUt) to borrow ZCHF, a stablecoin pegged to the Swiss Franc. PAXG, issued by Paxos, is a regulated digital asset with each token backed by one fine troy ounce of physical gold, offering a bridge between traditional hard assets and decentralized finance.

This development is a significant step in the integration of Real World Assets (RWAs) into the DeFi ecosystem. By incorporating gold-backed tokens, FrankenCoin diversifies its collateral base beyond more volatile crypto-native assets, which can enhance the stability and appeal of its ZCHF stablecoin. The move signals a broader industry trend where DeFi protocols are looking to tangible, regulated assets to build more resilient and trustworthy systems.