ETF Giant Challenges Tether and Paxos with Framework for Tokenized Gold
Cryptocurrencies like Bitcoin give users full control over their assets, but this level of control does not extend to gold-backed digital tokens, where management and custody are more complex. The World Gold Council, supported by major gold mining companies, has proposed a framework to standardize tokenized gold, aiming to boost industry confidence and ensure greater fungibility through features like continuous audits. Their “Gold as a Service” concept would create a shared network for managing physical reserves, streamlining processes for companies issuing gold-backed tokens. Currently, leading firms like Paxos and Tether rely on bespoke custody arrangements for their tokens, storing gold in secure vaults, often in London or Switzerland. Investors interested in self-custody face obstacles due to the physical nature of gold and its associated storage costs, unlike more income-generating or digital assets. The Council’s initiative seeks to lower barriers for market entry and foster broader adoption, allowing more firms to easily and cost-effectively launch gold-backed digital products. This effort is aimed at expanding gold’s presence in the growing digital asset market, beyond its successful SPDR Gold Shares ETF.
