Tokenized gold is becoming one of the fastest-growing categories in real-world assets (RWA). Instead of buying bars through a vault service or ETF shares through a brokerage, investors can now own legally backed physical bullion represented as blockchain tokens. Each unit on-chain is tied to real gold that sits in a certified vault, and holders can transfer it globally 24/7, use it in DeFi, or even redeem it for physical bars depending on the issuer.
🏛️ How Tokenized Gold Works
Every gold-backed token has three core components:
- A licensed issuer (regulated trust, commodity company, or DAO)
- Physical bullion stored in a certified vault (Brink’s, Malca Amit, Swiss vaults, etc.)
- A proof mechanism linking tokens to reserves (audits, serial numbers, redemption policies)
The issuer’s jurisdiction matters. Some products are regulated under strict U.S. law (like PAX Gold), while others operate from neutral commodity hubs such as Switzerland, Singapore, or the UAE. This affects investor rights if something goes wrong.
📊 Main Models of Tokenized Gold
Tokenized gold comes in four different custody structures:
🔒 Fully Allocated Gold
Each token corresponds to a specific bar or fraction of it. Strongest legal protection.
Examples: PAXG, XAUM
🧱 Pooled Gold
Tokens represent shared vault reserves. Cheaper to issue, highly liquid, but legally weaker.
Example: XAUt (Tether Gold)
🧾 Gram-Denominated Models
Tokens equal one gram (or less). Best for small buyers; redemption often requires larger quantities.
Examples: KAU, VNXAU, CGO, DGX
🧬 DAO-Managed Gold
Community controls custody and rules. Transparent but legally experimental.
Example: GOLDAO
🏆 Leading Tokenized Gold Projects
| Project | Unit | Regulation | Model |
|---|---|---|---|
| XAUt | 1 oz | El Salvador + Swiss vaults | Pooled |
| PAXG | 1 oz | U.S. NYDFS | Fully allocated |
| XAUM | 1 oz | Singapore | Fully allocated |
| KAU | 1 g | Cayman Islands | Gram model + yield |
| VNXAU | 1 g | EU (Liechtenstein, MiCA aligned) | Gram model |
| CGO | 1 g | UAE | Shariah-compliant |
| GOLDAO | Varies | Switzerland | DAO custody |
🎯 Who Is Tokenized Gold Best For?
| Use Case | Best Options |
|---|---|
| Long-term savings | PAXG, XAUM |
| Fractional retail purchases | KAU, VNXAU |
| DeFi collateral and traders | XAUt |
| Islamic finance | CGO |
| Experimental governance | GOLDAO |
🧠 Final Thoughts
Tokenized gold merges two worlds: the legal security of traditional bullion markets and the borderless liquidity of blockchain. It competes not only with crypto stablecoins, but also with ETFs, vault services, and international savings accounts.
Before choosing a token, compare four things carefully:
- Vault jurisdiction
- Custody model (pooled vs allocated)
- Audit frequency and transparency
- Physical redemption rules
These factors decide whether your token is merely “backed” — or whether you actually own bullion.
🔗 Full in-depth guide:
https://bestcryptoideas.com/wiki/tokenized-gold-guide/
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