In-depth research report on tokenized gold: reshaping a new on-chain paradigm for safe-haven assets

1. Preface: The return of risk aversion demand in the new cycle

Since the beginning of 2025, geopolitical conflicts have occurred frequently, inflationary pressure has not subsided, and growth in major economies has weakened, and demand for safe-haven assets has heated up again. As a traditional "safe asset" has once again become the focus. Gold prices have repeatedly hit new highs, breaking through the $3,000 mark per ounce, becoming a safe haven for global funds to influx. At the same time, with the acceleration of the integration of blockchain technology and traditional assets, "Tokenized Gold" has become a new trend in financial innovation. It not only retains the value-preserving attributes of gold, but also has the ability to interact with on-chain assets, composability and smart contracts. More and more investors, institutions and even sovereign funds are beginning to include tokenized gold in their allocation vision.

2. Gold: The "hard currency" that is still irreplaceable in the digital

age

Although mankind has entered the era of highly digital financial, with various financial assets constantly emerging, from credit currencies, treasury bonds, stocks, to digital currencies that have emerged in recent years, gold has always maintained its status as "ultimate stored-value assets" with its unique historical thickness, value stability and cross-sover sovereign monetary attributes. The reason why gold is called "hard currency" is not only because it has natural scarcity and physical infault, but also because what it carries is not the credit endorsement of a specific country or organization, but the result of thousands of years of long-term consensus in human society. In any macro cycle where sovereign currencies may depreciate, fiat currency system may collapse, and global credit risks accumulate, gold is always regarded as the last line of defense and is the ultimate payment method under systemic risks.

Gold has been marginalized in the past few decades, especially after the collapse of the Bretton Woods system, and its status as a direct settlement tool has been replaced by the US dollar and other sovereign currencies. However, it turns out that credit currency cannot completely escape the fate of cyclical crises, and gold's status has not been erased, but is re-assigned to the role of value anchoring in each round of currency crises. The global financial crisis in 2008, the global monetary easing wave after the epidemic in 2020, and the high inflation and interest rate hikes since 2022 have all made gold prices significantly rise. Especially after 2023, the combined combination of geopolitical frictions, risk of US debt defaults, and stubborn global inflation has brought gold to a new important threshold of $3,000 per ounce and triggered a new round of shifts in global asset allocation logic.

The behavior of the central bank is the most intuitive reflection of this trend. Data from the World Gold Council shows that global central banks have continued to increase their holdings of gold in the past five years, especially "non-Western countries" such as China, Russia, India, and Türkiye. In 2023, the global central bank net gold purchase volume exceeded 1,100 tons, setting a record high. This round of gold return is essentially not a short-term tactical operation, but is based on deep considerations of strategic asset security, sovereign currency multipolarization and the increasingly declining stability of the US dollar system. Against the backdrop of the continuous reconstruction of the global trade pattern and geopolitics, gold is once again regarded as the reserve asset with the most trusted boundary. From the perspective of monetary sovereignty, gold is replacing US Treasury bonds and becoming an important anchor for central banks in many countries to adjust their foreign exchange reserve structure.

More structurally, gold's safe-haven value is regaining recognition from the global capital market. Compared with credit assets such as US dollar treasury bonds, gold does not rely on the issuer's solvency and does not have the risk of default or restructuring. Therefore, in the context of high global debt and continuous expansion of fiscal deficits, gold's "opponent-free risk" attribute is particularly prominent. Currently, the debt/GDP ratio of major economies around the world generally exceeds 100%, and the United States is even more than 120%. Fiscal sustainability is increasingly questioned, making gold irreplaceable attraction in an era of weakening sovereign credit. In actual operations, large institutions including sovereign wealth funds, pension funds, commercial banks, etc. have increased the proportion of gold allocation to hedge against systemic risks in the global economy. This behavior is changing the traditional "counter-cyclical + defensive" role of gold, making it more long-term positioning of "structural neutral assets".

Of course, gold is not a perfect financial asset. Its natural defects such as relatively low transaction efficiency, difficulty in transferring physical objects, and difficulty in programmatic programming, appear to be more "heavy" in the digital age. But this does not mean it has been eliminated, but it prompts gold to undergo a new round of digital upgrades. We have observed that the evolution of gold in the digital world is not static preservation, but actively integrating financial technology logic towards "tokenized gold". This transformation is no longer a competition between gold and digital currencies, but a combination of "value-anchored assets and programmable financial protocols." The on-chainization of gold injects liquidity, composability and cross-border transfer capabilities into it, making gold not only play the role of wealth carriers in the physical world, but also begin to become an anchor for stable assets in the digital financial system.

It is particularly worth noting that gold, as a stored value asset, has a complementary rather than an absolute substitution relationship with Bitcoin, the "digital gold". Bitcoin's volatility is much higher than gold, does not have sufficient short-term price stability, and in an environment with high macro policy uncertainty, it is more inclined to be regarded as a risky asset rather than a safe-haven asset. With its huge spot market, mature financial derivatives system, and wide acceptance at the central bank level, gold still maintains the triple advantages of anti-cyclical, low volatility and high recognition. From the perspective of asset allocation, gold is still one of the most important risk hedging factors when building a global investment portfolio, and has an irreplaceable underlying "financial neutral" status.

Overall, whether from the perspective of macro-financial security, monetary system reshaping, or global capital allocation reconstruction, gold's status as a hard currency has not weakened with the rise of digital assets. Instead, it has been enhanced again due to the strengthening of global trends such as "de-dollarization", geopolitical fragmentation, and sovereign credit crisis. In the digital age, gold is not only the stabilizing needle of the traditional financial world, but also the potential value anchor of future financial infrastructure. The future of gold is not replaced, but continues its historical mission as the "ultimate credit asset" in the new and old financial systems through tokenization and programmability.

3. Tokenized gold: Gold expression of on-chain assets

Tokenized Gold is essentially a technology and financial practice that maps gold assets in the form of crypto assets in the blockchain network. It maps the ownership or value of physical gold into tokens on the chain through smart contracts, so that gold is no longer limited to treasurys, warehouse orders and static records of banking systems, but can be freely circulated and combined on the chain in a standardized and programmable form. Tokenized gold is not a creation of a new type of financial asset, but a reconstruction method of injecting traditional commodities into a new financial system in digital form. It embeds gold, a hard currency that crosses historical cycles, into the "de-mediated financial operating system" represented by blockchain, giving birth to a new value-bearing structure.

This innovation can be understood macro-level as an important part of the global asset digitalization wave. The widespread popularity of smart contract platforms such as Ethereum provides an underlying programmable basis for gold's on-chain expression; and the development of stablecoins in recent years has verified the market demand and technical feasibility of "on-chain value-anchored assets". Tokenized gold is an extension and upgrading of the concept of stablecoin in a sense. It not only pursues price anchorage, but also has real and no credit default risk behind it. Unlike the stablecoins anchored by fiat currency, gold-anchored tokens naturally get rid of the volatility and regulatory risks of a single sovereign currency, and have cross-border neutrality and long-term anti-inflation ability. This is particularly important in the context of the current stablecoin pattern dominated by the US dollar, which is increasingly causing regulatory and geo-sensitive issues.

From a micro-mechanical perspective, the generation of tokenized gold usually depends on two paths: one is the custody model of "100% physical collateral + on-chain issuance", and the other is the protocol model of "programmed mapping

• verifiable asset vouchers". The former, such as Tether Gold (XAUT) and PAX Gold (PAXG), are both physical gold custodians behind them, ensuring that each token corresponds one by one to a certain amount of physical gold, and are regularly audited and off-chain reports. The latter, such as Cache Gold, Digital Gold Token, attempt to enhance the verifiability and liquidity of tokens through programmable asset vouchers and gold batch numbers. No matter what path is adopted, its core goal is to build a mechanism for trusted representation, liquidation and settlement of gold on the chain, so as to achieve real-time transferability, segmentation and combination of gold assets, breaking the stubborn problems of fragmentation, high threshold and low liquidity in the traditional gold market.

The greatest value of tokenized gold is not just an advance in technological expression, but a fundamental transformation of the functionality of the gold market. In the traditional gold market, physical gold transactions are usually accompanied by high transportation, insurance and storage costs, while paper gold and ETFs lack real ownership and on-chain composability. Tokenized gold attempts to provide a new form of gold that can be split, settled in real time, and flows across borders through the form of on-chain native assets, so that gold, a "static asset", has been transformed into a dynamic financial tool with "high liquidity + high transparency". This feature greatly broadens the available scenarios of gold in DeFi and global financial markets, allowing it to not only exist as a reserve of value, but also participate in multi-level financial activities such as mortgage lending, leveraged trading, income agriculture and even cross-border clearing and settlement.

Going further, tokenized gold is driving the gold market to shift from centralized infrastructure to decentralized infrastructure. In the past, the value flow of gold was heavily dependent on traditional centralized nodes such as the London Gold and Silver Market Association (LBMA), clearing banks, and vault custodians. Problems such as information asymmetry, cross-border delays and high costs emerged one after another. Tokenized gold uses on-chain smart contracts as a carrier to build a gold asset issuance and circulation system that requires no license and trust intermediaries, transparently and efficiently the rights confirmation, settlement, custody and other links of traditional gold, greatly reducing the market entry threshold, allowing retail users and developers to equally access the global gold liquidity network.

Overall, tokenized gold represents a profound value reconstruction and system integration of traditional physical assets in the blockchain world. It not only inherits the hedging attributes and value storage functions of gold, but also expands the functional boundaries of gold as a digital asset in the new financial system. Under the general trend of global financial digitalization and multipolarization of monetary system, the reconstruction of gold on the chain is destined to be not a temporary attempt, but a long-term process accompanied by the evolution of financial sovereignty and technological paradigms. Whoever can build a tokenized gold standard that combines compliance, liquidity, composability and cross-border capabilities in this process will have the possibility of grasping the voice of "on-chain hard currency" in the future.

4. Analysis and comparison of mainstream tokenized gold projects

In the current crypto-financial ecosystem, tokenized gold, as a bridge connecting the traditional precious metal market and the emerging on-chain asset system, has produced a number of representative projects. These projects have been explored from multiple dimensions such as technical architecture, hosting mechanism, compliance path, and user experience, and have gradually built a set of "on-chain gold" market prototypes. Although they all follow the basic principle of "physical gold mortgage + on-chain mapping" in core logic, the specific implementation paths and focus are different, reflecting that the tokenized gold track is still in the stage of competition and uncertain standards.

Currently, the most representative tokenized gold projects include: Tether Gold (XAUT), PAX Gold (PAXG), Cache Gold (CGT), Perth Mint Gold Token (PMGT), and Aurus Gold (AWG). Among them, Tether Gold and PAX Gold can be regarded as the two giants in the current industry. They are not only ahead of other projects in market value and liquidity, but also have an advantage in user trust and exchange support with a mature custody system, high transparency and strong brand endorsement.

Tether Gold (XAUT) was launched by the leading stablecoin Tether. Its biggest feature is that it is anchored one by one with the standard gold bars in the London gold market. Each XAUT corresponds to 1 ounce of physical gold held in Switzerland. Relying on the Bitfinex ecosystem behind Tether, the project has first-mover advantages in liquidity, trading channels and stability. However, Tether Gold is relatively conservative in terms of disclosure and transparency, and users cannot directly view the binding information of each token and the specific gold bar number on the chain. This black box asset custody method is controversial in the encryption community with high decentralization requirements. In addition, XAUT's compliance layout is still mainly aimed at international offshore users. For investors who want to invest in tokenized gold through formal financial channels, the entry threshold is still high.

By contrast, PAX Gold (PAXG) was launched by Paxos, a licensed U.S. fintech company, goes further in compliance and asset transparency. Each PAXG also represents 1 ounce of London standard gold, and provides users with information about the information that can be queried on the chain through the verifiable gold bar serial number and custodial data. More importantly, Paxos, as a trust company regulated by the New York Financial Services Agency (NYDFS), has been subject to regulatory scrutiny, which has improved PAXG's compliance endorsement to a certain extent. The project is also actively expanding DeFi compatibility and has been integrated into multiple DeFi protocols such as Aave and Uniswap, allowing PAXG to participate in lending and liquidity mining as collateral, thereby releasing the compound value of gold assets on the chain.

Cache Gold (CGT) represents another type of attempt toward tokenized gold prefer decentralized and verifiable asset credentials. The project adopts the "Token Wrapper + Gold Bar Number Registration" system, each CGT represents 1 gram of physical gold and is bound to the gold batch number of the independent custodian warehouse. Its biggest feature is the strong binding mechanism on-chain and off-chain, that is, each gold mortgage must generate the corresponding Proof of Reserve, and record the batch information and flow status through the blockchain. This mechanism allows users to track the physical assets behind the tokens more transparently, but also makes the project face challenges in custody efficiency and liquidity organization, and has not yet been widely promoted to mainstream DeFi scenarios.

Perth Mint Gold Token (PMGT) is an official tokenized gold product launched by Perth Mint, a state-owned precious metal coin in Australia. The gold assets behind the project are guaranteed by the Australian government and entrusted in a national vault. In theory, it is one of the strongest credit projects in tokenized gold. However, due to its low participation in the cryptocurrency market, scarce transaction pairs, and lack of DeFi compatibility, the project has extremely high security and official endorsement, but it is far behind Tether Gold and PAX Gold in terms of market liquidity and user popularity.

There are also some innovative projects such as Aurus Gold (AWG) and Meld Gold, which try to build a new paradigm of tokenized gold through diversified custodians, NFT packaging, cross-chain issuance, etc. For example, Aurus Gold adopts a multi-mint joint issuance and integrated with multiple exchanges and wallets to enhance the anti-central dependency capabilities of gold tokens and introduces NFT as gold parcel certificates to provide flexibility for asset management. This type of project is more closely related to the Web3 native asset system in terms of concept, but it is still in its early stages and has not yet established a broad market consensus.

Overall, the current tokenized gold market is showing a polarization pattern: on the one hand, the "centralized + high-trust" project represented by Tether Gold and PAX Gold, which quickly occupy the mainstream market share with the endorsement of large institutions, mature custody structure and exchange access advantages; on the other hand, the "decentralized + verifiable" project represented by Cache Gold, Aurus Gold, etc., emphasizes asset transparency and on-chain autonomy, but in actual use, it is still limited by market acceptance, custody collaboration efficiency and DeFi integration. The competition between the two also reflects the continuous game between the entire crypto financial ecosystem between the "trust threshold" and the "technical ideal".

Judging from the industry evolution trend, the future tokenization gold standard is likely to evolve towards the integration of "compliance, verifiability, composability, and cross-chain capabilities". On the one hand, only by establishing a transparent custody system in a strong regulatory environment and assets that pass audit and on-chain verification can gain the long-term trust of mainstream institutions and users; on the other hand, projects must also be truly integrated into DeFi and Web3 infrastructure to achieve the "asset primitive" of gold tokens, otherwise it is just a "gold certificate of deposit under financial packaging", which is difficult to release sufficient use value and network effects.

5. Tokenized gold from the perspective of investors: value, opportunity

and risk

As an emerging financial tool that combines traditional value anchoring and on-chain assets, tokenized gold is gradually becoming an alternative asset option in the investor allocation portfolio. Unlike traditional gold ETFs or physical gold bars, its core value lies not only in the hedging attributes represented by gold itself, but also in the enhanced liquidity, improved transaction convenience and composability expansion obtained after asset digitization through blockchain infrastructure. From the perspective of investors, the attractiveness of tokenized gold lies in its finding a relatively balanced entry point between the "financial stability anchor" and the "technical innovation dividend", which has become a realistic path to allocating "on-chain hard currency" in the context of high volatility in the crypto market.

First of all, tokenized gold naturally undertakes the basic investment logic of gold as a global safe-haven asset. Historical experience shows that in a cycle of increasing macroeconomic uncertainty, intensifying inflationary pressure or rising geopolitical risks, gold usually obtains a risk premium in the capital market, becoming the first choice for institutional and individual investors to hedge against the decline in fiat currency purchasing power and violent market fluctuations. Tokenized gold continues this attribute, especially during periods of violent volatility in the crypto market, providing investors with low correlation or even negative correlation asset allocation opportunities. During the multiple downward cycles of the crypto market in 2022 and 2023, the price fluctuations of tokens such as PAXG and XAUT were significantly smaller than those of mainstream crypto assets, and even became a "on-chain fund safe haven" for funds to have short-term safe-haven.

Secondly, tokenized gold gives gold assets unprecedented liquidity and accessibility. Traditional gold investment has multiple pain points, including high trading thresholds, limited trading time, inconvenient deposit and withdrawal, and strong geographical restrictions. As an ERC-20 or cross-chain asset, tokenized gold can not only transfer instantly in any wallet that supports public chains around the world, but also realizes a variety of advanced financial operations such as high-frequency trading, DeFi pledge, and cross-border settlement. This liquidity leap has greatly improved the operating space of gold assets, making it no longer limited to the "asset warehousing" function, but becomes a "on-chain cash flow underlying asset" that can be dynamically managed.

More importantly, as DeFi and Web3 infrastructure gradually mature, tokenized gold is gaining the financial attributes of composability, which makes it no longer just "gold in digital form", but gradually becomes a component module of on-chain native assets. Investors can obtain stablecoins by staking PAXG, thereby freeing up liquidity participation in other investment opportunities; they can also add gold assets to the liquidity pool to obtain returns; they can even transfer tokenized gold across chains in multi-chain interoperability protocols to serve payment and settlement needs worldwide. This concept of "assets are agreements" is an innovation path that cannot be achieved in the traditional gold financial system.

However, despite the many advantages of tokenized gold, it still has certain structural risks and development bottlenecks, and investors need to fully weigh the trade-offs when participating. First of all, there are custody and redemption risks. Most tokenized gold projects still rely on a centralized physical custody system. Investors must trust the issuer to properly keep gold for a long time and provide physical redemption if necessary. The current redemption process of most projects is cumbersome, with high thresholds and limited geographical locations. Especially in extreme market situations, there is still legal and operational uncertainty as to whether users can successfully complete the exchange of on-chain assets to physical gold. In addition, some projects lack information disclosure in custody audits and asset proofs. This lack of transparency will reduce user confidence and will not be conducive to its long-term functional construction as a "on-chain hazardous anchor".

The second is the external risks of compliance and regulation. Since gold itself is a high-value sensitive asset, its tokenization process involves multiple regulatory requirements such as precious metal market, securities law, KYC/AML. In different jurisdictions, the legality and regulatory paths of tokenized gold are not uniform, which means that the legal risks faced by the project are highly uncertain. Especially for institutional users who want to use this type of asset for cross-border settlement or large-scale transactions, how to operate steadily within the compliance framework is a key factor in determining their acceptance.

Finally, from the perspective of market game, tokenized gold still has the role of "assisted allocation" in actual investment portfolios and is difficult to become a dominant asset. Although its hedging and stability characteristics are of great value in the downward cycle, in a bull market environment, its earnings performance is often not as good as risky crypto assets such as Bitcoin and Ethereum. This characteristic of "stable value but limited increase" makes tokenized gold more suitable as a tool to hedge volatility and stabilize portfolio returns rather than a core investment target that pursues high growth.

Overall, tokenized gold is not only a "value storage tool" for new assets, but also a "security-first" configuration option in the digital economy world. Its internal logic is based on the stable value of the golden millennium, and it reshapes its transaction, custody and combination capabilities through blockchain technology. With the further development of the DeFi ecosystem, the improvement of cross-chain infrastructure and the gradual clearance of compliance paths, tokenized gold may play a more important role in "full life cycle management of digital assets". For individual users, this is a realistic path to improve asset risk resistance and perform countercyclical allocation; for institutions, it may become a "bottom asset" in building on-chain portfolios, and thus opening a new era of "on-chain asset management" in the true sense.

6. Summary: The on-chain upgrade of gold is not a substitution, but a

continuation

In an era of credit instability, increased volatility in the US dollar, and reshaping the global monetary pattern, gold is undergoing a "digital rediscovery" process. It is not replaced by digital assets such as Bitcoin, but is tokenized, programmable, and smart contracted, so as to participate in the construction of the new financial system in a more flexible form. For users, this evolution of gold is still a "hard currency", but it has changed to a chain form. It can still provide a sense of security, value preservation and risk resistance, becoming a true "stability anchor" in the digital world.