> For the complete documentation index, see [llms.txt](https://docs.bitcarbon.com/diamond-standard-carats-bitcarbon/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.bitcarbon.com/diamond-standard-carats-bitcarbon/carats/carats-details/carats-vs.-gold-bitcoin-and-tether.md).
# Carats vs. Gold, Bitcoin, and Tether
**A “Non-Currency” with the Best Features of Bitcoin, Stablecoins, and Gold**
Two types of digital currencies have emerged—purely digital currencies like Bitcoin, and stablecoins like Tether backed by fiat currency (any tokens backed by sponsor-managed assets). Fundamental flaws and weaknesses, from economic, technical, regulatory or social perspectives are apparent in both types. Carats are intended to address these critical issues.
Carats are a unique new type of digital token, issued directly by commodities and not by a trusted sponsor or algorithm. Unlike Bitcoin and Tether which are regulated as money, Carats are neither virtual currencies nor securities—legally they are commodities, arguably making them exempt from virtual currency and money transmitter regulations. Carats are verifiably asset-backed by a redeemable commodity, making the token scalable, stable, secure and fair. Carats improve upon a gold standard, in ways that are possible only with diamonds.
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