From BTC to tokenization of gold, who is the real "digital gold"?

Have you noticed that more and more people around you are discussing “gold” lately?

Yes, I am referring to gold in its physical sense. With the increase in geopolitical risks and global macroeconomic uncertainties, the total market value of gold once reached 30 trillion USD, firmly securing its position as the top asset in the world.

At the same time, an interesting thing is happening in the Crypto world. Beyond Bitcoin, which is widely regarded as “digital gold,” physical gold is accelerating its transition onto the blockchain: tokenized gold represented by Tether Gold (XAUT) has gained new capabilities through the RWA wave, becoming divisible, programmable, and even interest-bearing.

It is challenging a narrative that has been almost monopolized by Bitcoin for a long time: “Who is the real digital gold?”

BTC: The Narrative Evolution Over a Decade

Is BTC a currency or an asset? Is its core function payment or value storage? Or is it a risky asset similar to tech stocks?

Since its inception in 2009, this issue has nearly permeated the entire history of Bitcoin.

Although Satoshi Nakamoto clearly stated the “Electronic Cash” attribute of BTC in the white paper, the evolution of its scale over the past 10 years has turned this topic into a narrative that has undergone several reversals, with continuous debates within the community—from an early payment method to “store of value” and “alternative asset.”

Especially the formal approval of the spot ETF in 2024 will become a narrative turning point, where more people no longer see Bitcoin as a “global currency” for trading and payments. Instead, an increasing number of people are beginning to view Bitcoin as a value storage asset with a consensus foundation, namely “digital gold”:

Like gold, it is scarce in total supply, predictable and stable in production, but at the same time possesses advantages that gold cannot match: better divisibility (1 satoshi = 0.00000001 BTC), portability (cross-border transfers in seconds), and liquidity (24/7 market).

For this reason, Bitcoin has gradually become the third global store of value logic after the US dollar and gold in the macro monetary system.

Source: companiesmarketcap.com

According to statistics from companiesmarketcap, gold is currently in an absolute leading position among the global Top 10 assets, with a total market capitalization of 28.4 trillion, far exceeding the sum of the next nine (26 trillion).

It is important to know that even when BTC breaks the $100,000 mark, its total market value is only around $2 trillion, which is merely about 1/15 of the total market value of gold. This is actually the underlying motivation for the BTC community to continuously emphasize the narrative of “digital gold,” aiming at the largest and oldest value storage asset in the traditional financial world.

Interestingly, while BTC is striving to align itself with the narrative of “digital gold,” gold itself is also being “digitized.”

The most direct incentive is the continuous new highs of gold in the real world, along with the RWA wave since the beginning of this year, which has led to the rapid rise of tokenized gold represented by Tether Gold (XAUT) and PAX Gold (PAXG).

Since they are anchored to physical gold, each token issued is backed by an equivalent amount of physical gold reserves. Therefore, this batch of “digital gold” products undoubtedly represents a new financial species in both the Crypto and TradFi fields.

The Rising Gold RWA Wave of “Unexpected Forces”

Actually, using the term “emerging suddenly” for tokenized gold might not be very accurate.

Because strictly speaking, neither the current largest XAUT nor the closely following PAXG are newly launched popular products; on the contrary, it is the current RWA wave and macro market conditions that have helped them gain new strategic significance and market attention.

Taking XAUT as an example, its early beginnings can be traced back to the end of 2019. At that time, Paolo Ardoino, the Chief Technology Officer of Bitfinex and Tether, revealed that Tether was planning to launch a gold-backed stablecoin product called Tether Gold, and the XAUT white paper was publicly released on January 28, 2022.

The white paper clearly states that each XAUT token represents ownership of one ounce of physical gold. Tether guarantees that it has prepared physical reserve gold corresponding to the issued quantity, and all gold is stored in “Swiss vaults with top-notch security.”

As of the time of writing, the total issuance of XAUT has exceeded 1.55 billion USD, representing approximately 966 gold bars in physical reserves (a total of 11,693.4 kg).

Source: Tether

In fact, we can see a clear positioning of its advantages in the Tether Gold white paper:

• Compared to physical gold, “gold stablecoins” can divide the hard-to-split precious metal into smaller denominations, making it easier to carry and transport, and greatly lowering the threshold for individual investment;
• Compared to gold ETFs, it enables 24/7 round-the-clock trading of assets without custody fees, significantly improving the speed and efficiency of asset transfers.

Tether Gold believes it can help users achieve high liquidity and divisibility while holding gold that is anchored behind it.

In other words, tokenization has given real gold the unique “digital properties” of BTC, allowing it to be fully absorbed into the digital world for the first time, becoming an asset unit that can flow, combine, and be calculated freely. It is this step that has transformed tokenized gold products like XAUT from mere “gold certificates on the blockchain” into a gateway to a vast space on the blockchain.

Of course, this trend has also led the market to reconsider: when gold and BTC both become on-chain assets, what is the relationship between them—competition or symbiosis?

Speculation on Tokenized Gold and Digital Gold

Overall, if we say that the core narrative of BTC is “the scarce consensus of the digital world,” then the biggest difference of tokenized gold (XAUT/PAXG) lies in “bringing the scarce consensus into the digital world.”

This is a subtle yet essential difference, where BTC creates trust entirely from scratch, while tokenized gold digitizes the traditional trust structure, just as CZ recently tweeted:

“Tokenized gold is not true on-chain gold, but rather based on trust in the issuer's ability to perform. Even in extreme cases, such as management changes or wars, users still need to rely on the continuity of this trust system.”

This sentence highlights the fundamental difference between tokenized gold and Bitcoin, namely that Bitcoin's trust is based on algorithmic consensus, with no issuing party or custodian, while tokenized gold's trust relies on institutional credit – it requires trust that Tether or Paxos will strictly adhere to their reserve commitments.

This also means that Bitcoin is a product of “trustlessness,” while tokenized gold is an extension of “re-trust.”

Of course, if we only look at the value of assets from the perspective of appreciation, the core value of gold in the traditional financial system lies in its hedging and value preservation. However, in the context of blockchain, tokenized gold has for the first time gained programmability:

• It can be used as collateral for DeFi protocols to borrow stablecoins on platforms like Aave and Compound, for leverage or yield management;
• It can be integrated into smart contract logic, becoming yield-bearing gold, with the hope of achieving yield-bearing gold;
• It can also circulate freely across different networks through cross-chain bridges, becoming a stable liquid asset in a multi-chain ecosystem;

The essence of this change is that gold transforms from a static store of value into a dynamic financial unit, endowed with Bitcoin-like digital attributes through tokenization technology—verifiable, liquid, combinable, and computable. This means that gold is no longer just a symbol of value lying in the vault, but has become a “living asset” in the on-chain world that can participate in profits and generate credit.

Objectively speaking, in the current context of tightening liquidity and weak Alt assets, the rise of RWA has brought traditional assets like gold, bonds, and stocks back into the crypto spotlight. The enthusiasm for tokenized gold precisely indicates that the market is seeking a more robust and certain on-chain value anchor.

From this perspective, tokenized gold, which is accelerating under the RWA wave, is not meant to (nor can it) replace BTC, but rather serves as a perfect complement to the BTC “digital gold” narrative, becoming a new financial species that combines the efficient liquidity of digital assets with the hedging certainty of traditional gold.