Gold-backed crypto stablecoins work by tying their value to physical gold reserves, unlike regular stablecoins that are pegged to fiat currencies like the US dollar. Each gold-backed stablecoin represents a specific amount of gold stored securely by the issuing company, ensuring that its value moves in line with gold prices. Regular stablecoins such as USDT or USDC maintain price stability through fiat reserves or algorithmic mechanisms, offering liquidity and ease of transfer for digital trading. In contrast, gold-backed stablecoins provide a hedge against inflation and market volatility, combining the reliability of gold with the efficiency of blockchain technology. This makes them an attractive option for investors seeking both stability and intrinsic value in the crypto ecosystem.