Tokenised gold offers 3 key benefits over paper gold worth $3,500
Investors are increasingly turning to tokenised gold as an alternative to traditional paper gold products amid ongoing macroeconomic uncertainty and geopolitical tensions.
Representatives from Gold DAO (CRYPTO:GOLDAO), a decentralised autonomous organisation focused on tokenised gold, highlighted three main advantages of tokenised gold over gold exchange-traded funds (ETFs).
“When you buy an ETF, you are betting on the gold price going up, but you do not own any specific gold bar,” Melissa Song explained.
The first benefit is 1:1 redeemability, meaning token holders can exchange their tokens for a specific quantity of physical, serialised gold.
Second, tokenised gold can be used as collateral within decentralised finance (DeFi) applications, expanding its utility beyond traditional investment.
Third, tokenised gold offers transactional efficiency through on-demand liquidity, allowing holders to quickly buy or sell without the delays associated with physical gold.
Gold prices reached an all-time high of $3,500 per ounce in April 2025, driven by factors including US trade tariffs, high government debt, and geopolitical tensions disrupting risk asset markets.
This environment led traders to seek safe-haven assets like gold and gold-backed cryptocurrencies such as Paxos Gold (CRYPTO:PAXG) and Tether Gold (CRYPTO:XAUT), which also saw price increases.
Bitcoin (CRYPTO:BTC) advocate Max Keiser argued that gold-backed tokens could outperform fiat-backed stablecoins due to gold’s resistance to geopolitical risks and inflation.
“A stablecoin backed by Gold would out-compete a USD-backed stablecoin in world markets: Russia, China, and Iran should take note,” Keiser stated.
“The United States dollar has no volatility, but you are guaranteed to lose purchasing power,” he added.
The current gold rally may also influence Bitcoin’s role, potentially shifting investor perception of Bitcoin from a risk asset to a store of value counter-cyclical to stocks and other speculative investments.
According to Gold DAO, tokenised gold’s unique features position it as a more transparent and functional option compared to traditional paper gold products.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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