Tokenization of Gold: Reshaping the On-Chain New Paradigm of Safe-Haven Assets

I. Introduction: The Return of Risk Aversion Demand in a New Cycle

Since the beginning of 2025, geopolitical conflicts have intensified, inflation pressures remain, and major economies are experiencing sluggish growth, leading to a renewed demand for safe-haven assets. Gold, as a traditional "safe asset", has once again become the focus, with gold prices repeatedly hitting new highs, breaking through the $3000 per ounce barrier, and becoming a haven for global capital seeking refuge. Meanwhile, as the integration of blockchain technology with traditional assets accelerates, "tokenized gold" has emerged as a new trend in financial innovation. It not only retains the value-preserving properties of gold but also possesses the liquidity, combinability, and smart contract interaction capabilities of on-chain assets. More and more investors, institutions, and even sovereign funds are beginning to include tokenized gold in their investment portfolios.

2. Gold: The "hard currency" that remains irreplaceable in the digital age

Despite the fact that humanity has entered a highly digitized financial era, with various financial assets continuously emerging, ranging from fiat currency, government bonds, and stocks to the digital currencies that have risen in recent years, gold has maintained its status as the "ultimate store of value asset" due to its unique historical depth, value stability, and cross-sovereign monetary properties. Gold is referred to as "hard currency" not only because of its natural scarcity and physical non-falsifiability but also because what it carries behind it is not the credit endorsement of a specific country or organization, but the result of a long-standing consensus of human society spanning thousands of years. In any macro cycle where sovereign currencies may devalue, fiat currency systems may collapse, and global credit risks accumulate, gold is always regarded as the last line of defense and the ultimate means of payment under systematic risk.

In the past few decades, especially after the collapse of the Bretton Woods system, gold was once marginalized, and its status as a direct settlement tool was replaced by the U.S. dollar and other sovereign currencies. However, it has been proven that fiat currencies cannot completely escape the fate of cyclical crises. Gold's status has not been erased; rather, it has been redefined as a value anchor in each round of monetary crisis. The 2008 global financial crisis, the wave of global monetary easing after the pandemic in 2020, and the high inflation and interest rate shocks since 2022 have all led to a significant increase in gold prices. Especially after 2023, multiple factors such as geopolitical frictions, the risk of U.S. debt default, and persistent global inflation have combined to push gold back to the important threshold of $3000 per ounce, triggering a new shift in global asset allocation logic.

The actions of central banks are the most direct reflection of this trend. According to data from the World Gold Council, global central banks have continuously increased their gold holdings over the past five years, particularly with "non-Western countries" such as China, Russia, India, and Turkey showing particularly active engagement. In 2023, the net purchase of gold by global central banks exceeded 1,100 tons, setting a historic high. This round of gold repatriation is essentially not a short-term tactical operation, but rather a deep-seated consideration for strategic asset safety, the multipolarity of sovereign currencies, and the increasingly declining stability of the dollar system. Against the backdrop of ongoing restructuring in the global trade pattern and geopolitical landscape, gold is once again regarded as the most trusted reserve asset. From the perspective of monetary sovereignty, gold is replacing U.S. Treasury bonds and becoming an important anchor point for the adjustment of foreign exchange reserve structures by several central banks.

More structurally significant is that gold's safe-haven value is regaining recognition in the global capital markets. Unlike credit assets such as U.S. Treasury bonds, gold does not depend on the issuer's ability to pay and carries no risk of default or restructuring. Therefore, against the backdrop of rising global liabilities and expanding fiscal deficits, gold's "counterparty risk-free" attribute is particularly prominent. Currently, the debt-to-GDP ratio of major global economies generally exceeds 100%, with the United States reaching over 120%. The increasing questioning of fiscal sustainability makes gold possess an irreplaceable appeal in an era of weakened sovereign credit. In practical operations, large institutions, including sovereign wealth funds, pension funds, and commercial banks, are raising their allocation of gold to hedge against systemic risks in the global economy. This behavior is changing gold's traditional role as a "counter-cyclical + defensive" asset, positioning it more as a "structurally neutral asset" in the long term.

Of course, gold is not a perfect financial asset; its trading efficiency is relatively low, physical transfer is difficult, and it is inherently hard to program. These natural flaws make it seem "heavy" in the digital age. However, this does not mean that it will be eliminated; rather, it prompts gold to undergo a new round of digital upgrades. We observe that the evolution of gold in the digital world is not a static preservation of value, but an active integration of financial technology logic towards "tokenized gold". This transformation is no longer a competition between gold and digital currencies, but a combination of "value anchoring assets and programmable financial protocols". The on-chain aspect of gold injects liquidity, composability, and cross-border transfer capability, allowing gold to serve not only as a vehicle of wealth in the physical world but also to become an anchor for stable assets in the digital financial system.

It is particularly noteworthy that gold, as a store of value, has a complementary rather than an absolute substitute relationship with Bitcoin, the "digital gold". The volatility of Bitcoin is far higher than that of gold, lacking sufficient short-term price stability, and in an environment of high macro policy uncertainty, it tends to be viewed as a risk asset rather than a safe-haven asset. Gold, with its large spot market, mature financial derivatives system, and broad acceptance at the central bank level, still maintains the triple advantages of anti-cyclical, low volatility, and high recognition. From the perspective of asset allocation, gold remains one of the most important risk hedge factors in constructing a global investment portfolio, holding an irreplaceable underlying "financial neutrality" position.

Overall, whether from the perspective of macro financial security, the reconstruction of the monetary system, or the restructuring of global capital allocation, gold's status as hard currency has not diminished with the rise of digital assets. Instead, it has been further enhanced by the strengthening of global trends such as "de-dollarization", geopolitical fragmentation, and sovereign credit crises. In the digital age, gold is both a stabilizing force in the traditional financial world and a potential value anchor for future on-chain financial infrastructure. The future of gold is not to be replaced, but to continue its historical mission as the "ultimate credit asset" through tokenization and programmability, bridging the old and new financial systems.

3. Tokenization of Gold: On-chain Representation of Assets

Tokenization of gold is essentially a technology and financial practice that maps gold assets as encrypted assets on a blockchain network. It represents the ownership or value of physical gold as on-chain tokens through smart contracts, allowing gold to move beyond the static records of vaults, warehouse receipts, and banking systems, and to circulate and combine freely on-chain in a standardized and programmable form. Tokenized gold is not the creation of a new type of financial asset but a reconstruction method that injects traditional bulk commodities into the new financial system in digital form. It embeds gold, a hard currency that transcends historical cycles, into the "decentralized financial operating system" represented by blockchain, giving rise to a whole new value-bearing structure.

This innovation can be understood on a macro level as an important part of the global asset digitization wave. The widespread adoption of smart contract platforms like Ethereum provides the underlying programmable foundation for the on-chain representation of gold; meanwhile, the development of stablecoins in recent years has validated the market demand and technical feasibility for "on-chain value-backed assets." Tokenization of gold, in a sense, extends and elevates the concept of stablecoins, as it not only seeks price anchoring but also has real, non-credit default risk hard asset support behind it. Unlike stablecoins pegged to fiat currencies, gold-backed tokens are naturally freed from the volatility and regulatory risks of a single sovereign currency, possessing cross-border neutrality and long-term resistance to inflation. This is particularly significant in the current context where the dollar-dominated stablecoin landscape increasingly raises regulatory and geopolitical sensitivities.

From a micro-mechanism perspective, the generation of tokenized gold typically relies on two paths: one is the custodial model of "100% physical collateral + on-chain issuance," and the other is the protocol model of "programmatic mapping + verifiable asset certificates." The former, like certain projects, has physical gold custodial institutions behind them, ensuring that each Token corresponds one-to-one with a certain amount of physical gold, and regular audits and off-chain reports are conducted. The latter, like some projects, attempts to enhance the verifiability and liquidity of Tokens by binding programmable asset certificates with gold batch numbers. Regardless of the path taken, the core goal is to construct a mechanism for the trustworthy representation, liquidity, and settlement of gold on-chain, thus achieving real-time transferability, divisibility, and combinability of gold assets, breaking the traditional gold market's issues of fragmentation, high thresholds, and low liquidity.

The greatest value of tokenized gold lies not only in the technological advancements it represents but also in its fundamental transformation of the functionality of the gold market. In the traditional gold market, the trading of physical gold is usually accompanied by high transportation, insurance, and storage costs, while paper gold and ETFs lack true ownership and on-chain composability. Tokenized gold attempts to provide a new form of gold that is splittable, can be settled in real-time, and is capable of cross-border movement through on-chain native asset forms, transforming gold from a "static asset" into a "high liquidity + high transparency" dynamic financial instrument. This characteristic greatly expands the available scenarios for gold in DeFi and global financial markets, allowing it not only to exist as a store of value but also to participate in multi-layered financial activities such as collateral lending, leveraged trading, yield farming, and even cross-border clearing and settlement.

Furthermore, tokenization of gold is driving the transition of the gold market from centralized infrastructure to decentralized infrastructure. In the past, the value circulation of gold heavily relied on traditional centralized nodes such as the London Bullion Market Association (LBMA), clearing banks, and vault custodians, leading to numerous issues such as information asymmetry, cross-border delays, and high costs. Tokenized gold, utilizing on-chain smart contracts, has constructed a permissionless and trustless intermediary system for the issuance and circulation of gold assets, making the processes of rights confirmation, settlement, and custody of traditional gold transparent and efficient, significantly lowering market entry barriers, allowing retail users and developers to access the global gold liquidity network on equal terms.

Overall, tokenized gold represents a profound value reconstruction and system integration of traditional physical assets in the blockchain world. It not only inherits the safe-haven properties and value storage functions of gold but also expands the functional boundaries of gold as a digital asset in the new financial system. In the context of the global trend of financial digitization and the multipolarization of the currency system, the on-chain reconstruction of gold is destined to be not a temporary attempt but a long-term process accompanied by the evolution of financial sovereignty and technological paradigms. Whoever can build a tokenized gold standard that combines compliance, liquidity, composability, and cross-border capabilities in this process may have the potential to grasp the discourse power of "on-chain hard currency" in the future.

4. Analysis and Comparison of Mainstream Tokenization Gold Projects

In the current crypto financial ecosystem, tokenized gold has emerged as a bridge connecting the traditional precious metals market with the new on-chain asset system, giving rise to a number of representative projects. These projects explore various dimensions such as technical architecture, custody mechanisms, compliance paths, and user experience, gradually constructing a market prototype for "on-chain gold." Although they all adhere to the basic principle of "physical gold collateral + on-chain mapping" in their core logic, the specific implementation paths and focal points differ, reflecting that the tokenized gold sector is still in a stage of competition and undefined standards.

Currently, the most representative tokenization gold projects include multiple projects. Some of these projects can be regarded as the twin heroes of the current industry, leading not only in market value but also in liquidity.