Tokenized Gold Surges as Central Banks Fuel Demand
Gold's value has surged to a record near $5,600 an ounce in January, driven by Central banks adding 863 tonnes of gold in 2025 and on pace for roughly 850 more in 2026. The World Gold Council's survey found that 89% expect official gold holdings worldwide to grow over the next twelve months.
The problem with investing in physical gold is its format, not the asset itself. Physical gold is hard to store, move, and verify, making it expensive to insure and sell. ETFs offer price exposure but come with annual fees of 0.40% and have liquidity and saleability issues.
Tokenized gold has emerged as a solution. It represents a digital token backed by a physical bar of gold in a vault, transferable globally in seconds, and redeemable for the physical metal. Tokenized gold traded $90.7 billion in Q1 2026 alone, exceeding the $84.6B traded in all of 2025.
The adoption curve is already bending, similar to what happened with stablecoins. While some object to tokenized assets due to counterparty risk, the two main issuers offer quarterly proof of reserves reports and have undergone audits by reputable firms like KPMG.