Author: Mauricio Di Bartolomeo, Co-founder of Ledn
Compiler: AididiaoJP, Foresight News
Gold is experiencing its strongest rally since 1979. In January, the price of gold briefly touched a record high of nearly $5,600 per ounce. Unlike previous asset booms driven by retail frenzy, the primary drivers of this rally are the world's most conservative institutions—central banks.
In 2025, global central banks had a net increase in gold holdings of 863 tons, and an increase of approximately 850 tons is anticipated for 2026, nearly double the average annual growth rate before 2022. The latest survey of 76 reserve managers by the World Gold Council shows that 89% of respondents expect global official gold holdings to continue growing over the next 12 months, with a record 45% planning to increase their national reserves.
Gold has existed for thousands of years, and there are various ways to invest in it, but each involves significant trade-offs.
Physical gold (coins, bars) is difficult to store, transport, and transact. It either requires third-party custody or involves risks if self-custodied. Gold ETFs (like GLD) provide convenient price exposure but are only accessible to a minority of investors who can open tradable international market brokerage accounts; they cannot be directly spent, transferred, sent to others, or redeemed for physical metal, and they carry an annual management fee of 0.40%.
Technology has introduced a third way: tokenized gold. A digital token representing one ounce of gold, backed by physical gold bars stored in professional vaults in Zurich or London, can be transferred globally in seconds. Anyone with a mobile phone can receive it, and it can be redeemed for physical bars.
To understand its potential impact, consider what happened when the US dollar was tokenized.
What Stablecoins Did for the Dollar
A US dollar stablecoin is a digital token backed by an equivalent reserve of US dollars. It can be transferred via blockchain over the internet and can be used and spent just like dollars. Anyone, anywhere, with a digital wallet on their phone can send and receive stablecoins without needing a bank account. Cross-border transfer fees are just a few cents, settlement takes seconds, and it operates 24/7. It can be exchanged for dollars or local fiat currency at any time.
Following the pandemic, demand surged for a digital dollar rail offering 24/7, minute-by-minute settlement at minimal cost, leading to a rapid explosion of stablecoins. According to DefiLlama data, stablecoin supply grew from about $27 billion at the end of 2020 to over $300 billion today, representing more than a tenfold increase in just over five years. Trading volume reached a record $28 trillion in Q1 2026 (CEX.IO data). A significant portion of this is automated trading, but even filtered data from a16z excluding bot activity still recorded $4.5 trillion for the quarter, approaching the annual processing volume of major card networks. After the signing of the GENIUS Act in July 2025, the US established a federal regulatory framework for dollar tokens, requiring 1:1 backing by cash and short-term Treasury reserves. Stablecoins have evolved from a novel technology into regulated settlement infrastructure.
Stablecoins did not change the US dollar itself; they changed how dollars move, how they are stored, and who can access them.
Gold's Form Problem
The problem with gold has never been the asset itself, but its form.
Physical gold is difficult to verify, costly to store and insure, its liquidity and convertibility depend on location, it is almost indivisible, and large-scale cross-border transfers are nearly impossible. ETFs solve some of these issues, but ETF shares are only indirect claims, tradable only during market hours. Retail investors cannot redeem for physical metal, cannot self-custody, cannot transfer directly to others, and find it difficult to use as collateral outside the brokerage system. More notably, US-listed gold ETFs saw a record $13 billion outflow in March 2026, even as demand for physical bars and coins surged 42% year-over-year and US retail bar purchases increased. Funds were selling while investors clearly wanted gold but were increasingly dissatisfied with the existing "packaging."
Tokenized gold has emerged as a response. Tokens like Tether Gold (XAUt) or Pax Gold (PAXG) represent ownership of specific, allocated physical gold bars: real gold, verifiable, redeemable for physical metal. Unlike a physical bar, the token can be divided down to fractions of an ounce, transferred anywhere globally in minutes, traded 24/7, and used as collateral to obtain dollar liquidity without needing to sell.
The Adoption Curve is Already Accelerating
If the stablecoin analogy holds, the usage curve for tokenized gold should be accelerating like dollar tokens did around 2020. This is precisely what is happening.
In Q1 2026, tokenized gold trading volume reached $90.7 billion, already exceeding the full-year 2025 volume of $84.6 billion. Its market capitalization surpassed $6 billion in February. Its growth rate in Q1 was 5.5 times faster than that of physical gold holdings, setting a record, and it added over 44,500 new holder wallets.
$6 billion is still a fraction compared to gold's total market cap of approximately $30 trillion. But that is precisely the point: in 2019, stablecoins were also just a fraction relative to the money supply. Each new form starts small, wins by being more useful, and the benefits compound over time.
Counterparty Risk
The most common objection to tokenized assets is counterparty risk: "If you don't hold it in your hand, you don't really own it." This view has merit. Some are willing to take full responsibility for their savings and accept the associated costs. But the vast majority of gold investors have long accepted intermediaries—through ETFs, custody services, or unallocated gold accounts (paper claims, holding an IOU from a bank rather than specific bars). Well-structured gold tokens represent a claim on specific, allocated bars, backed 1:1, and redeemable for physical metal. It's a clear, transparent right. The two main issuers provide quarterly proof-of-reserve reports, and Tether recently underwent a KPMG audit.
The Path Forward
Bitcoin emerged because it was the first to create digital value that could be moved and settled 24/7 over the internet without intermediaries, accessible to anyone globally. Stablecoins emerged because they placed the US dollar on that same online rail, albeit through intermediary issuers. Today, those same intermediaries that tokenized the dollar are tokenizing gold, and they possess massive distribution networks. More importantly, tokenized gold addresses the accessibility problem for a huge global population—it's a more practical form.
I've seen firsthand what happened when Venezuelans discovered Bitcoin, and later, stablecoins. It solved our problems, so we adopted it. That's why I've devoted my career to this industry. When you find something that works better, you keep using it. It's that simple.
Technology may not change your desire to hold gold, but it has just provided billions of people with a new way to hold this 5,000-year-old asset.
