Tokenized gold is a blockchain token that represents ownership of a set amount of physical gold held by a custodian. For Tether Gold (XAUT) and PAX Gold (PAXG), one token corresponds to one fine troy ounce in London Good Delivery bars. You can trade it 24/7 and in fractions, but you rely on the issuer and vault.
How does tokenized gold work?
Tokenized gold is one of the oldest forms of real-world asset tokenization. The issuer buys gold bars that meet the London Bullion Market Association's Good Delivery standard (bars of approximately 400 troy ounces), places them with a vault custodian, and creates tokens on one or more blockchains in proportion to the ounces held. When tokens are redeemed, they are removed from circulation.
- Custody: a third-party custodian holds the bars on behalf of token holders. Tether Gold's terms describe each XAUT as an undivided specific interest in one fine troy ounce in its gold reserves, and allow the issuer to reallocate that ounce to a different bar when tokens move on-chain.
- Issuance: tokens are created by the issuer's smart contracts. XAUT has been available on BNB Chain since March 2026, alongside other networks.
- Transparency: issuers publish reserve reports. Tether reported 707,747.139 fine troy ounces (about 22 tonnes) in XAUT reserves as of 30 June 2026, all vaulted in Switzerland, and offers a look-up service that links an address to specific bars.
- Redemption: verified customers can swap tokens back for metal or cash under the issuer's terms and fee schedule.
Tokenized gold vs physical gold vs gold ETFs: what's the difference?
All three track the gold price, but they differ in what you legally own, what it costs to hold, and who you depend on. Our full guide to tokenized gold vs physical bullion covers storage, tax and redemption in more depth.
| Feature | Tokenized gold | Physical gold | Gold ETF |
|---|---|---|---|
| What you own | A token that reflects a claim on gold held by the issuer's custodian | The coin or bar itself | Shares in a trust that holds gold |
| Storage cost to you | Usually none charged directly; issuer fees apply when buying or redeeming | Safe, vault or deposit-box fees and insurance | Annual expense ratio deducted by the fund |
| When you can trade | 24/7 on exchanges and on-chain | Dealer opening hours | Stock-exchange hours |
| Smallest practical amount | Fractions of an ounce | Small coins carry high dealer premiums | One share, or fractions at some brokers |
| Getting physical metal | Large minimums (about one bar for XAUT) | You already hold it | Generally not available to retail shareholders |
| Main dependency | Issuer, custodian and blockchain | Your own storage and security | Fund sponsor, custodian and broker |
Which tokenized gold products are the largest?
Tether Gold (XAUT) and PAX Gold (PAXG) are the two gold tokens most investors encounter. Both peg one token to one ounce of Good Delivery gold, but the issuers, vault locations and oversight differ. See our detailed XAUT vs PAXG comparison before choosing between them.
| Feature | Tether Gold (XAUT) | PAX Gold (PAXG) |
|---|---|---|
| Issuer | TG Commodities, S.A. de C.V. (Tether group) | Paxos Trust Company, N.A. |
| Oversight named by issuer | Authorised as a stablecoin issuer and digital asset service provider in El Salvador (National Commission of Digital Assets) | Paxos says it is regulated by the US Office of the Comptroller of the Currency (OCC) |
| One token represents | An undivided interest in one fine troy ounce in London Good Delivery bars | One ounce of London Good Delivery gold |
| Vault location | Switzerland | LBMA vaults in London |
| Physical redemption | About 430 tokens for one bar; delivery within Switzerland or sale via a broker; fees apply | Gold bars, or US dollars at market prices |
How can you invest in tokenized gold?
There are three practical routes into tokenized gold. They differ in cost, minimum size and how much control you keep.
1. Buy directly from the issuer
Issuers sell tokens to verified customers. Tether Gold asks for a non-refundable 150 USDT verification deposit and applies purchase minimums and fees from its fee schedule, so this route suits larger buyers rather than first-time investors.
2. Buy on an exchange and hold it yourself
Many crypto exchanges list XAUT or PAXG, and you can buy a fraction of an ounce. You can then withdraw the tokens to a self-custody wallet. Check the network before you withdraw: Tether's terms warn that gold tokens on one blockchain may not be readily exchangeable for those on another. You also become responsible for your private keys and for paying network fees.
3. Hold it inside a multi-asset fund
Some crypto funds include a gold token as one holding among many. You get gold exposure without managing a wallet, but you own fund units rather than the token, so you cannot redeem for metal, and the fund's other assets usually drive most of its price movement. Pairing gold with crypto is covered in our guide to investing in Bitcoin and gold together.
What are the risks of tokenized gold?
Tokenized gold removes storage hassle but adds risks that a coin in your own safe does not have. The issuer's own terms are the best place to see them.
- Gold price risk: gold can fall in value; a token does not change that.
- Issuer and custodian risk: Tether Gold's terms state that the custodian's insurance is not expected to cover the full gold reserves, and that holders would need to pursue any claim against the custodian with their own resources.
- Freeze risk: the same terms allow Tether Gold to freeze tokens where required by law or where it decides this is prudent.
- Redemption limits: physical delivery needs roughly a full bar of tokens, and redemptions can take several business days.
- Technology risk: smart-contract bugs, bridge failures and lost private keys can all cause losses.
Does Wealtii hold tokenized gold?
Wealtii does not offer a gold-only fund. Tether Gold (XAUT) is one holding inside two multi-asset funds: 11.8% of the Wealtii Tech & Digital Asset Growth Fund and 19.1% of the Wealtii Multi-Asset Balanced Allocation Fund (target allocations as of 21 Oct 2026). The rest of each fund is crypto and tokenized stocks or ETFs. Fund assets are held 1:1 in a 3-of-3 multi-signature vault on BNB Smart Chain whose balances anyone can check; our guide on how to verify Wealtii's reserves on-chain shows how. Investors hold fund units, not XAUT, cannot redeem for gold, and withdraw in USDT. Wealtii is not regulated, and funds holding tokenized stocks may not be available in all jurisdictions, including the United States.
Frequently Asked Questions
Is tokenized gold backed by real gold?
Reputable gold tokens are backed by bars held by a custodian. Tether reported 707,747.139 fine troy ounces in its XAUT reserves at 30 June 2026, all vaulted in Switzerland, and Paxos says each PAXG represents one ounce of London Good Delivery gold. Backing depends on the issuer, so read its latest attestation before you buy.
Can I redeem tokenized gold for a physical gold bar?
Usually only in large amounts. Tether Gold's terms let verified customers redeem XAUT for a London Good Delivery bar, which typically means depositing around 430 tokens, with delivery inside Switzerland or a sale through a gold broker, and fees apply. Paxos offers redemption of PAXG for gold bars or US dollars.
How much money do I need to start investing in tokenized gold?
Gold tokens are divisible, so exchanges let you buy a fraction of an ounce. Buying directly from an issuer is different: Tether Gold asks for a non-refundable 150 USDT verification deposit and sets purchase minimums. On small purchases, network fees and exchange spreads can take a noticeable share of the amount invested.
What are the main risks of tokenized gold?
Gold prices still rise and fall, and you depend on the issuer, the vault custodian and the blockchain. Tether Gold's terms allow it to freeze tokens, warn that redemptions can take several business days, and state that the custodian's insurance is not expected to cover the full gold reserves.
Does Wealtii offer a tokenized gold fund?
No. Wealtii does not offer a gold-only fund. Tether Gold (XAUT) is 11.8% of the Wealtii Tech & Digital Asset Growth Fund and 19.1% of the Wealtii Multi-Asset Balanced Allocation Fund (target allocations, 21 Oct 2026). Investors hold fund units, cannot redeem them for gold, and withdraw in USDT.
Sources & References
- Tether Gold (TG Commodities, S.A. de C.V.) — Terms of Service: ownership, redemption, freezes and custodian insurance (accessed 21 Oct 2026)
- Tether — Q2 2026 Tether Gold reserves update (published 3 Aug 2026) (accessed 21 Oct 2026)
- Tether — XAUT available on BNB Chain (26 Mar 2026) (accessed 21 Oct 2026)
- Paxos — PAX Gold (PAXG) product page (accessed 21 Oct 2026)
- LBMA — About Good Delivery (London gold bar standard) (accessed 21 Oct 2026)
Disclaimer: This content is for educational purposes only and does not constitute financial, tax, or legal advice. Gold, digital assets and tokenized assets can fall in value and you can lose money. Wealtii is not licensed or registered with any financial regulator; see our regulatory status page.
