What is tokenized gold and how does it work?

Tokenized gold combines the long-standing appeal of precious metals with the efficiency of blockchain technology. Here’s how tokenized gold works, how it compares with traditional gold investments and how investors can unlock access today.

Why investors are rethinking gold and other commodities

For centuries, gold and silver have been viewed as stores of value during periods of economic uncertainty. 

To an extent, they play the role of a stabilizer in times of inflation and geopolitical tension.

However, traditional ways of accessing gold have not always been convenient. Physical ownership brings storage and insurance considerations, while financial instruments such as ETFs come with market-hour constraints and structural limitations.

Tokenized gold has emerged as an alternative approach, one that aims to preserve the characteristics of physical bullion while enhancing accessibility and liquidity through blockchain.

Traditional vs digital: How investors usually get into gold

Historically, retail investors have relied on two main routes:

Physical bullion

Owning gold bars or coins provides direct exposure, but it also involves:

• Secure storage and insurance costs.
• Wider buy–sell spreads.
• Limited liquidity compared with financial markets.

Paper gold (ETFs and Derivatives)

Gold ETFs and futures track the price of gold and trade on traditional exchanges. While convenient, they:

• Don’t usually grant direct ownership of specific gold bars.
• Trade only during market hours.
• Can involve intermediaries and ongoing management fees.

What is tokenized gold?

Tokenized gold refers to digital tokens issued on a blockchain that are backed 1:1 by physical gold stored in secure vaults. Each token represents legal ownership of a specific quantity of gold, such as one gram or one troy ounce.

This model is may be described as a ‘third way’, sitting between physical bullion and paper gold as it combines:

• Physical backing.
• Digital transferability.
• Continuous market access.

As of early 2026, the tokenized gold market has grown to over US$4.3 billion in total market capitalization, accounting for more than 80% of the tokenized commodities sector.

How tokenized gold works

At a high level, tokenized gold involves three core components:

1. Physical custody

Gold bars are stored in professional vaults that typically meet LBMA standards.

2. Token issuance

Each token minted on a blockchain corresponds to a defined amount of vaulted gold.

3. On-chain transferability

Tokens can be transferred, traded, or held like other digital assets.

Some issuers provide Proof of Reserve (PoR) mechanisms, allowing users to verify bar serial numbers and allocations associated with the circulating token supply.

Settlement and liquidity

Unlike traditional bullion markets, tokenized gold:

• Trades 24/7 on digital asset exchanges.
• Settles near-instantly on-chain.
• Can be transferred globally without physical logistics.

Investors get to respond more quickly to macroeconomic developments with such continuous access.

Fractional ownership at scale

One key distinction between tokenized gold and traditional products is divisibility.

For example:

• Tether Gold (XAUT) can be divided into increments as small as 0.000001 troy ounces
• PAX Gold (PAXG) supports divisibility to 18 decimal places

Those who are more comfortable with a lower commitment get to participate with relatively small amounts, compared with buying physical bars or even a full ETF share.

Transparency and on-chain verification

Many tokenized gold issuers publish:

• Vaulting partner details.
• Independent attestations.
• Bar-level reserve data.

While transparency varies by issuer, blockchain records allow users to track token movements in real time — a feature not readily available in traditional gold markets.

Comparing tokenized gold with traditional gold products

Sources: LBMA, LPMCL, PAXOS, Tether

Risks to consider

While tokenized gold pose a more efficient means of investing in precious metals, it’s not risk-free:

• Custodial risk: Investors rely on issuers and vaulting partners to safeguard the underlying gold.
• Regulatory variation: Legal treatment differs across jurisdictions.
• Technology risk: Smart contract vulnerabilities and exchange security remain considerations.

How to trade tokenized gold on Crypto.com

Tokenized gold: What’s available on Crypto.com

Crypto.com currently supports two tokenized gold offerings:

• PAX Gold (PAXG): Issued by Paxos Trust Company, each PAXG token represents one troy ounce of investment-grade gold stored in LBMA-approved vaults. PAXG holders may be eligible to redeem tokens for physical gold bars, subject to issuer terms.
• Tether Gold (XAUT): Issued by Tether, XAUT is similarly backed 1:1 by physical gold, with each token corresponding to one troy ounce held in secure vaults. Redemption is available through Tether’s authorized partners.

Both tokens trade 24/7 on Crypto.com and can be purchased fractionally, meaning you can start with relatively small amounts of capital.

Ways to start trading tokenized gold on Crypto.com

Trading tokenized gold can be done through the Crypto.com App or Exchange, just like how you would with regular crypto listings like BTC and ETH. In addition to trading tokenized gold alongside other digital assets, you can also choose to open a dedicated tokenized gold trading account on Crypto.com.

Step-by-step: How to get started

Step 1: Create and verify a Crypto.com account

Download the Crypto.com App (iOS or Android) or visit the website to sign up. You’ll have to complete the Know-Your-Customer (KYC) verification process.

Step 2: Fund your account

Once verified, funds can be added using several methods, subject to regional availability:

• Bank transfer (e.g., SEPA or ACH)
• Debit or credit card
• Apple Pay or Google Pay
• Cryptocurrency deposits from external wallets

Processing times and fees vary by method and jurisdiction. 

Step 3: Find tokenized gold markets

In the App, you can:

• Search for PAXG or XAUT directly, or;
• Browse via the ‘Markets’ section.

Step 4: Place a trade

You can choose between:

• Market orders, which execute immediately at current prices, or
• Limit orders, which execute only at a specified price.

Step 5: Manage and monitor holdings

Tokenized gold held on Crypto.com can be:

• Viewed alongside other assets in the wallet.
• Sold back to fiat at any time.
• Transferred to an external wallet (network fees may apply).

Trading fees and Level Up benefits

Tokenized gold trades on Crypto.com are subject to standard trading fees. However, users who join Crypto.com Level Up — either via subscription or CRO staking — may be eligible for reduced or zero trading fees* on PAXG and XAUT, depending on their tier.

FAQs about tokenized gold

What is tokenized gold?

Tokenized gold is a digital asset issued on a blockchain where each token represents ownership of a specific amount of physical gold stored in secure vaults. The gold is typically held by professional custodians and backed on a 1:1 basis.

Is tokenized gold backed by real gold?

Reputable tokenized gold products are backed 1:1 by physical gold. Issuers usually publish custody details and, in some cases, Proof of Reserve data that allows holders to verify the gold backing their tokens.

How is tokenized gold different from gold ETFs?

Gold ETFs provide indirect exposure to gold through fund shares, while tokenized gold represents allocated ownership of physical bullion. Tokenized gold would usually trade 24/7 on digital asset platforms and can be transferred on-chain, whereas ETFs trade during market hours.

What are the risks of investing in tokenized gold?

Risks include reliance on the issuer and vaulting partners, regulatory differences across jurisdictions and technology-related considerations such as smart-contract or exchange security. Tokenized gold prices can also fluctuate with broader market conditions.

How can I buy tokenized gold?

Tokenized gold can be purchased on supported digital asset platforms, such as the Crypto.com App and Exchange, using fiat or cryptocurrencies, subject to regional availability. Fractional purchases allow users to start with relatively small amounts.

* Other transaction fees and spread may apply. Zero trading fees up to the transaction limit specified per Level Up tier. 

The Level Up benefits mentioned are subject to your level in the Level Up program. Check the specific conditions and benefits for each level. Rewards and availability are subject to terms and conditions and jurisdiction. Certain rewards and benefits are available only in eligible markets and may vary by region. See https://crypto.com/us/levelup  for details.

Important Information: This is informational content sponsored by Crypto.com and should not be considered as investment advice. Trading cryptocurrencies carries risks, including price volatility. Past performance may not indicate future results. There is no assurance of future profitability. Consider your risk appetite before trading cryptocurrencies.

Services, features, and benefits referenced may be subject to eligibility requirements and may change at Crypto.com’s discretion.