Tokenized gold tokens have seen a sudden surge, pushing the overall market capitalization of gold-backed crypto assets past $2.57 billion. The jump comes as two market leaders — Tether’s XAUT and Paxos’s PAXG — recorded fresh highs in supply and valuation, drawing notable inflows during August and the summer months.
XAUT experienced the biggest single boost. Tether’s gold token grew by about $437 million in supply to a record roughly $1.3 billion, after the Treasury minted 129,000 XAUT tokens on Ethereum in early August, according to on-chain data. The issuance reflects active demand for a blockchain-native way to own physical gold.
PAXG, Paxos’s tokenized-gold product, likewise expanded to a record market size near $983 million, driven by roughly $141.5 million of net inflows since June, per DefiLlama. Both tokens are structured to track the dollar price of gold and are reportedly backed by allocated physical bars held in custodial vaults.
The broader rally in tokenized gold coincides with the metal itself trading near recent peaks — around $3,470 — close to the April 22 high. Market observers point to a steepening U.S. Treasury yield curve and renewed safe-haven demand as key drivers that are lifting bullion and, by extension, gold-backed crypto instruments.
Why this matters: tokenized gold gives crypto investors a way to gain exposure to bullion while staying inside the digital-asset ecosystem. Greater market size can improve liquidity and trading depth on decentralized exchanges and custodial platforms, and may attract institutions seeking crypto-native diversification tools.
Risk considerations: while tokenized gold tracks bullion prices, it carries non-price risks — including custodial, audit and redemption procedures, counterparty guarantees, and regulatory uncertainty. On-chain ownership does not eliminate the need to verify custody arrangements or the processes to convert tokens back to physical metal.
Source: CoinDesk. Read the original coverage for full details.
