Gold is back: Could digital gold tokens be the new stablecoins?

Bitcoin is not “digital gold,” as some claim. You know what it is, though? Digital, blockchain-based tokens that represent actual quantities of physical gold. At a time when geopolitical and economic uncertainties are pressuring national fiat currencies and international trade, gold is once again in the spotlight. This time, tokenized gold is also getting its share of attention. Could it even challenge stablecoins as a spending currency? Will it ever be allowed to?

• Bitcoin is not digital gold
• Gold-backed tokens new form of stablecoin?
• The allure of gold as wealth
• Shifting to gold-backed stablecoin
• Are tokens really as good as gold?

The 2020s gold rush has seen the price of one troy ounce rise more than double over the past 5 years (US$1,800 in November 2020 to $4,141 in November 2025). In parallel, the potential of blockchain technology features like tokenization, instant settlements, and asset liquidity with 24/7 trading has begun to reach a mainstream audience. It’s an easy “best of both worlds” scenario where gold’s millennia-long reputation for value meets digital speed and convenience.

Bloomberg recently reported on the relaunch of DGLD, which had initially appeared in 2019. The Swiss refinery and trading giant MKS PAMP SA released the first version as part of a consortium that included CoinShares International Ltd.

“The timing was too early,” said CEO James Emmett. The revamped version of DGLD follows MKS PAMP’s acquisition of Gold Token SA. It will issue DGLD only to accredited institutions, who may then sell them to traders on multiple digital asset exchanges.

The even more stable stablecoin?

Gold-backed tokens could become a new form of stablecoin; in fact, Bloomberg even dropped the phrase “gold stablecoin” from its report. Like fiat-currency stablecoins, the tokens are designed to be redeemable for the actual asset upon request.

The concept of a secure, gold-backed digital token found appeal years before even Bitcoin appeared, yet multiple attempts to actually create such a token have faltered. Gold was still too niche, old-fashioned, and almost a bit boring in a world of rapid trading gains. It was difficult to determine the reputation of the organizations behind the tokens. And often, the political and regulatory hurdles were higher than the technological ones.

More recent gold token releases have featured backing by recognizable big names. They come via companies with precious metals industry and banking pedigrees, or familiar brands in blockchain. Bloomberg noted that the gold token with the highest market cap today is Tether Gold (XAUt), with over US$2 billion in gold-equivalent units. That’s still tiny compared to the $130 billion in gold ETFs… for now.

XAUt is issued by TG Commodities Sociedad Anonima De Capital Variable in El Salvador. Also aimed primarily at institutional investors, it promises to “deliver physical gold bars to any address in Switzerland.”

Similarly, blockchain infrastructure firm and stablecoin issuer Paxos Inc. has Pax Gold (PAXG), and banking giant HSBC (NASDAQ: HSBC) launched the conservatively-named HSBC Gold Token. PAXG trades on public digital asset exchanges, with a current market cap of around $1.37 billion, while HSBC remains more in-house—its token exists on a proprietary private “distributed ledger” for HSBC clients only.

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The unbreakable allure of gold as wealth

There has been a notable increase in countries adding physical gold to their central bank reserves over the past few years. 634 tonnes were added globally up to September 2025, slightly less than the acquisitions between 2022 and 2024. International Monetary Fund (IMF) data and central bank disclosures have recorded increases in Poland, Turkey, Kazakhstan, Brazil, and India.

The largest national gold reserves in tonnes exist in: the United States (8,133); Germany (3,350); Italy (2,452); France (2,437); Russia (2,330); China (2,304); and Switzerland (1.040). The global gold reserve total is estimated to be around 36,700 tonnes.

(Canada, though a major gold producer, is (in)famous for having exactly zero gold since 2016, the only G7 country to sell off its entire reserve. Similarly, Australia, another large gold producer, has maintained a steady 80 tonnes in its reserves since 1997.)

It’s difficult to say precisely how much gold various countries hold in their national reserves. Buying, selling, or transporting large amounts can affect the market price. A country or group of countries may increase or decrease reserves secretly for strategic reasons. Therefore, the exact size of a large country’s hoard is not always publicly available, and it’s possible some countries’ holdings are higher (or lower) than the official statistics show.

The information above suggests that gold reserves continue to be a significant factor in national wealth and prestige, as well as aspirations for global power status (Canada notwithstanding). News of significant reserve increases has sparked new interest from the general public and has likely contributed to the huge increase in gold’s market price.

If most large countries and central banks still view gold as a symbol of wealth and power, then there must be something to it. Eventually, that signal filters through to the public subconscious.

In 2011, US Fed Chairman Ben Bernanke stated that gold is not money. Economist John Maynard Keynes called the gold standard a “barbarous relic” back in 1923 (though that expression originated many decades before he repeated it). Conversely, Milton Friedman said, “Money is what money does,” and Alan Greenspan in 1966 said gold is the only thing that fulfills all the requirements of money.

The BTC community often declares its favorite blockchain asset to be “digital gold.” Admittedly, it’s becoming almost as difficult to move it from place to place. Although the BTC asset itself is still struggling to establish credibility as a strategic reserve asset, blockchain technology could add Bitcoin-like utility to gold through physical-reserve-backed tokens. Gold would become more liquid, more accessible, and have actual utility in the global digital economy.

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How about a gold-backed stablecoin?

Whether a gold-backed stablecoin is more useful or desirable than a fiat-backed one depends on the use case and the user. For companies active in international trade, gold tokens may be a hedge against inflation and volatility (like gold itself). For others, having units denominated in (and pegged to) currencies they use for most of their accounting is more useful, regardless of what backs them. The same applies to large banks and businesses, as well as ordinary individuals, since tokenized gold can be transferred in any quantity (from huge to tiny fractions) with just a few clicks.

Eli Afram, who founded tokenized precious metals company Amleh on the BSV network back in 2019, said “markets always move towards harder money once fiat starts showing cracks,” adding that if retailers could accelerate the shift by offering discounts for gold-token payments.

“To be clear about Gresham’s Law: it says bad money drives out good money, but only when the government forces both to be accepted at the same face value. That was true under strict legal tender rules. In a free market, the opposite happens. Good money wins because people prefer to hold it, and sellers prefer to receive it. So the incentive has to come from the seller, not the buyer.”

“Gold is also gaining traction as an investment. Central banks have been buying gold at the fastest rate since the 1960s over the last two years. Tokenised gold is growing too. Tether Gold (XAUt) already sits around rank 47 in the crypto market with a $2.3 billion market cap, and it’s only one of several gold-backed options.”

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Are tokens really as good as gold?

What are the downsides to tokenized gold, then? If we asked you to name the most popular gold-backed token, you’d probably be able to name a list of candidates, or none at all. That means there is currently no particular form of digital gold with the same kind of brand recognition or reputation as, say, a USD stablecoin. To anyone who isn’t familiar with the token you hold, it’s not as “good as gold,” even if both are backed by physical gold in a vault somewhere. Additionally, you might have two different gold-ounce tokens that can’t be exchanged for one another easily —you’d still need to have an account with an exchange that lists both of them, or you would exchange them for your local currency.

Then there’s the old problem of how to guarantee a gold token represents a provable, real-world quantity of gold sitting in a vault. No amount of laws, reserve requirements, or audits can ever guarantee this 100%, meaning the main question will be the same as it is for existing stablecoins: Does the market trust it enough to accept it? Large banks like HSBC can lend their brand names to tokenized gold assets, which will work for some. Names like “London” and “Switzerland” will work on others. The fact that the largest gold-backed token today is operated by Tether essentially answers the trust question: as long as the market trusts it, it will be trusted.

Like all other NFTs/FTs, stablecoins, and other blockchain tokenized assets, digital gold tokens would be significantly more useful to the world economy on a fast and scalable public blockchain network like BSV. MKS PAMP’s DGLD and Paxos Gold (PAXG) are ERC-20 tokens on the Ethereum network. HSBC’s Gold Token lives on the bank’s private distributed ledger called Orion.

There have been a few notable attempts to create gold-backed digital tokens on the BSV network. They include Amleh (utilizing technology developed by Elas) and Liquid Noble (which used the Tokenized platform), both based in Australia. Both projects viewed tokenized gold as a potential daily-use currency, and both garnered considerable interest.

“Elas has a history with this through Amleh, who were seeking to build a gold-backed currency engine,” said Elas CEO Brendan Lee.

“While a great idea, it requires significant government buy-in and regulatory oversight. Through improvements in our tooling, knowledge, and processes, Elas have developed entirely new ways of fractionalizing things which can easily be applied to gold. I certainly would love to look at this again, either with Amleh or through another motivated party looking to create new ways to invest in our favourite shiny yellow metal. “

Liquid Noble still exists as a bullion broker, but in mid-2025, it was forced to move away from blockchain tokenization due to new Australian financial regulations. Although gold is popular with both governments and ordinary people, governments remain nervous about allowing the public to access and use gold as money too easily. Widespread usage could destabilize national currencies, and the usual scare tactics about crypto price volatility wouldn’t work.

As a result, there are strict international restrictions concerning who may issue gold-backed tokens and who is permitted to sell them. The four prominent assets mentioned in Bloomberg’s report (DGLD, XAUt, PAXG, and HSBC Gold) are intended for accredited/institutional investors, and for use as stablecoin-like trading currencies on exchanges.

It’s hard to suppress or restrict a great idea forever, especially when the technology to build it is readily available, and there’s a demand for the product. Both Afram and Lee remain interested in the concept of tokenized gold and its potential to eventually reach the masses.

“When it comes to tokenization of gold on the blockchain,” Lee said, “I see this as merely a continuation of a practice that has existed for hundreds (if not thousands) of years, which is secure storage of gold in a centralised location with distributed ownership managed via ledgers and certificates. Using a blockchain merely gives us a more efficient and simpler means to manage this, and allows us to break the gold down into much smaller, more accessible amounts.”

“This will, of course, render it more interesting and open to investment by retail buyers who may not have considered buying gold previously. It is not easy or low-stress to manage holdings of gold bullion, especially if you are keeping the physical asset on your person or in your home. Secure tokenization presents a straightforward means to allow large amounts of gold to be fractionalised and sold to a retail market—and I am very keen to explore this further.”

Gold-backed digital token, moving at light speed on a scalable blockchain, is a concept that’s easy to visualize yet still ahead of its time. Small-scale projects and tightly controlled larger-scale ones will continue to try until the opportunity window finally opens, and the prize of mass adoption will likely go to whoever was standing by the window at precisely the right moment.

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Watch: Gold as a commodity