Why investors are rethinking gold and other commodities
For centuries, gold and silver have been regarded as stores of value during periods of economic uncertainty. They often serve as stabilizers amid inflation, geopolitical tension, and market turmoil. Yet traditional ways of accessing gold have not always been convenient. Physical ownership entails storage, insurance, and logistical burdens, while financial instruments like gold ETFs come with market-hour constraints and structural limitations. Tokenized gold has emerged as a modern alternative—one that preserves the tangible characteristics of physical bullion while significantly improving accessibility and liquidity through blockchain technology.
Traditional vs digital: how investors usually get exposure to gold
Historically, retail investors have relied on two main routes:
Physical bullion
Owning gold bars or coins provides direct exposure, but it also involves:
- Secure storage and insurance costs.
- Wider buy–sell spreads.
- Limited liquidity compared with financial markets.
Paper gold (ETFs and derivatives)
Gold ETFs and futures track the price of gold and trade on traditional exchanges. While convenient, they:
- Don’t usually grant direct ownership of specific gold bars.
- Trade only during market hours.
- Can involve intermediaries and ongoing management fees.
The table below summarizes the key differences among traditional gold products:
| Feature | Physical bullion | Metal ETFs | Mining stocks | Futures and CFDs |
|---|---|---|---|---|
| Ownership | Direct (bars or tokens) | Indirect (shares in a fund) | Equity in a company | Price speculation only |
| Liquidity | Low (requires physical sale) | High (trades like a stock) | High | Very high |
| Costs | High (premiums + storage) | Low (expense ratios) | Low (brokerage fees) | Low (spreads or commissions) |
| Leverage | None | Limited | Indirect (company debt) | High (can magnify losses) |
| Risk profile | Low (tangible asset) | Moderate (market risk) | High (business risk) | Very high (leverage risk) |
What is tokenized gold?
Tokenized gold refers to digital tokens issued on a blockchain that are backed 1:1 by physical gold stored in secure vaults. Each token represents legal ownership of a specific quantity of gold, such as one gram or one troy ounce. This model is often described as a ‘third way’, sitting between physical bullion and paper gold because it combines physical backing, digital transferability, and continuous market access.
As of early 2026, the tokenized gold market has grown to over $4.3 billion in total market capitalization, accounting for more than 80% of the tokenized commodities sector.
How tokenized gold works
At a high level, tokenized gold involves three core components:
1. Physical custody
Gold bars are stored in professional vaults that typically meet LBMA standards.
2. Token issuance
Each token minted on a blockchain corresponds to a defined amount of vaulted gold.
3. On-chain transferability
Tokens can be transferred, traded, or held like other digital assets. Some issuers provide Proof of Reserve (PoR) mechanisms, allowing users to verify bar serial numbers and allocations associated with the circulating token supply.
Settlement and liquidity
Unlike traditional bullion markets, tokenized gold:
- Trades 24/7 on digital asset exchanges.
- Settles near-instantly on-chain.
- Can be transferred globally without physical logistics.
Investors get to respond more quickly to macroeconomic developments with such continuous access.
Fractional ownership at scale
One key distinction between tokenized gold and traditional products is divisibility. For example:
- Tether Gold (XAUT) can be divided into increments as small as 0.000001 troy ounces
- PAX Gold (PAXG) supports divisibility to 18 decimal places
Those who prefer a lower commitment can participate with relatively small amounts, compared with buying physical bars or even a full ETF share. The table below compares entry barriers and ownership types between paper gold and tokenized gold:
| Feature | Paper Gold (ETFs) | Tokenized Gold (Crypto) |
|---|---|---|
| Minimum Entry | Typically 1 share (approx. hundreds of dollars depending on the fund). | As low as $0.01. Tokens like PAXG or XAUT are divisible to 18 decimal places. |
| Ownership Type | Synthetic: You own a share in a trust that owns gold. You are legally entitled to a fractional, undivided beneficial interest in a pool of gold bars. | Allocated: Each token often represents legal title to a specific, identifiable gram or ounce in a vault. |
| Utility | Static: It sits in a brokerage account. You cannot use it for anything else. | Programmable: You can use your gold as collateral to take a loan in DeFi or earn yield on it. |
Transparency and on-chain verification
Many tokenized gold issuers publish vaulting partner details, independent attestations, and bar-level reserve data. While transparency varies by issuer, blockchain records allow users to track token movements in real time—a feature not readily available in traditional gold markets.
Comparing tokenized gold with traditional gold products
| Gold product | Custody fees | Minimum purchase | Time to settle | Allocated | Redeem for physical gold | Regulated |
|---|---|---|---|---|---|---|
| Major Gold ETFs (e.g., GLD, IAU) | 0.18–0.40% per annum | 1 share (dozens to hundreds USD) | T+0 (trade), T+2 creation/redemption | Generally No (Fund owns it) | Only for Authorized Participants | Yes (e.g., SEC) |
| Gold Futures (Comex) | No | 1 contract (100 oz ~ $200K+) | On expiration date | No (cash settlement standard; physical rare) | Possible but rare/complex | Yes (e.g., CFTC) |
| LBMA 400t oz Gold Bar | 0.10–0.50% per annum | ~$1 million (full bar) | T+2 days | Yes | Yes | LBMA standards (not financial regulator) |
| Unallocated Gold (Loco London) | 0–0.30% per annum | Variable | T+0 or T+2 days | No (pooled claim) | Rarely (usually cash-settled) | No (OTC) |
| Tokenized Gold (e.g., PAXG, XAUT) | No | Buy fractions for as low as 1 USD on exchanges like Crypto.com | Near instant | Yes (bar lookup) | Varies | Depends on issuers |
Sources: LBMA, LPMCL, Paxos, Tether
Risks to consider
While tokenized gold offers a more efficient means of investing in precious metals, it is not risk-free. Key risks include:
- Custodial risk: Investors rely on issuers and vaulting partners to safeguard the underlying gold.
- Regulatory variation: Legal treatment differs across jurisdictions.
- Technology risk: Smart contract vulnerabilities and exchange security remain considerations.
How to trade tokenized gold on Crypto.com
Tokenized gold: what’s available on Crypto.com
Crypto.com currently supports two tokenized gold offerings:
- PAX Gold (PAXG): Issued by Paxos Trust Company, each PAXG token represents one troy ounce of investment-grade gold stored in LBMA-approved vaults. PAXG holders may be eligible to redeem tokens for physical gold bars, subject to issuer terms.
- Tether Gold (XAUT): Issued by Tether, XAUT is similarly backed 1:1 by physical gold, with each token corresponding to one troy ounce held in secure vaults. Redemption is available through Tether’s authorized partners.
Both tokens trade 24/7 on Crypto.com and can be purchased fractionally, so you can start with relatively small amounts of capital.
Ways to start trading tokenized gold on Crypto.com
Trading tokenized gold can be done through the Crypto.com App or Exchange, just like you would with regular crypto listings such as BTC and ETH. In addition to trading tokenized gold alongside other digital assets, you can also choose to open a dedicated tokenized gold trading account on Crypto.com.
Step-by-step: how to get started
Step 1: Create and verify a Crypto.com account
Download the Crypto.com App (iOS or Android) or visit the website to sign up. You’ll have to complete the Know-Your-Customer (KYC) verification process.
Step 2: Fund your account
Once verified, funds can be added using several methods, subject to regional availability:
- Bank transfer (e.g., SEPA or ACH)
- Debit or credit card
- Apple Pay or Google Pay
- Cryptocurrency deposits from external wallets
Processing times and fees vary by method and jurisdiction.
Step 3: Find tokenized gold markets
In the App, you can search for PAXG or XAUT directly, or browse via the ‘Markets’ section.
Step 4: Place a trade
You can choose between market orders, which execute immediately at current prices, or limit orders, which execute only at a specified price.
Step 5: Manage and monitor holdings
Tokenized gold held on Crypto.com can be viewed alongside other assets in the wallet, sold back to fiat at any time, or transferred to an external wallet (network fees may apply).
Trading fees and Level Up benefits
Tokenized gold trades on Crypto.com are subject to standard trading fees. However, users who join Crypto.com Level Up—either via subscription or CRO staking—may be eligible for reduced or zero trading fees on PAXG and XAUT, depending on their tier.
FAQs about tokenized gold
What is tokenized gold?
Tokenized gold is a digital asset issued on a blockchain where each token represents ownership of a specific amount of physical gold stored in secure vaults. The gold is typically held by professional custodians and backed on a 1:1 basis.
Is tokenized gold backed by real gold?
Reputable tokenized gold products are backed 1:1 by physical gold. Issuers usually publish custody details and, in some cases, Proof of Reserve data that allows holders to verify the gold backing their tokens.
How is tokenized gold different from gold ETFs?
Gold ETFs provide indirect exposure to gold through fund shares, while tokenized gold represents allocated ownership of physical bullion. Tokenized gold would usually trade 24/7 on digital asset platforms and can be transferred on-chain, whereas ETFs trade during market hours.
What are the risks of investing in tokenized gold?
Risks include reliance on the issuer and vaulting partners, regulatory differences across jurisdictions, and technology-related considerations such as smart-contract or exchange security. Tokenized gold prices can also fluctuate with broader market conditions.
How can I buy tokenized gold?
Tokenized gold can be purchased on supported digital asset platforms, such as the Crypto.com App and Exchange, using fiat or cryptocurrencies, subject to regional availability. Fractional purchases allow users to start with relatively small amounts.
The Level Up benefits mentioned are subject to your level in the program. Check the specific conditions and benefits for each level. Rewards and availability are subject to terms and conditions and jurisdiction. Certain rewards and benefits are available only in eligible markets and may vary by region. See https://crypto.com/en/levelup for details.