From distrustful BTC to tokenized gold, who is the true "digital gold"?

Have more and more people around you been discussing “gold” lately?

Yes, I’m talking about physical gold. As geopolitical risks and global macroeconomic uncertainties increase, the total market value of gold has once surged to $30 trillion, firmly holding the top spot among global assets.

Meanwhile, something interesting is happening in the crypto world. Beyond Bitcoin, widely regarded as “digital gold,” physical gold is accelerating its on-chain transformation: tokenized gold, represented by tokens like Tether Gold (XAUT), has gained new capabilities—divisibility, programmability, and even yield generation—through the RWA wave.

It is challenging a long-standing narrative almost monopolized by Bitcoin: “Who is the true digital gold?”

01, BTC: A Decade of Narrative Evolution

Is BTC a currency or an asset? Is its core function payments or store of value? Or is it more akin to a risk asset like tech stocks?

Since its inception in 2009, this question has nearly defined Bitcoin’s entire history.

Although Satoshi Nakamoto explicitly stated in the white paper that BTC has an “Electronic Cash” attribute, as its scale evolved over the past decade, this question has repeatedly shifted in community debates—from early payment methods to “store of value” and “alternative asset.”

Especially with the official approval of spot ETFs in 2024, this marked a turning point in the narrative. More people no longer see Bitcoin as a “global currency” for trading and payments. Instead, an increasing number view Bitcoin as a store of value with a consensus foundation—what is called “digital gold”:

Limited in total supply like gold, with predictable and stable production, yet possessing advantages gold cannot match: better divisibility (1 satoshi = 0.00000001 BTC), portability (instant cross-border transfer), and liquidity (markets open 24/7).

Because of this, Bitcoin is gradually becoming the third global store of value after the US dollar and gold within the macro monetary system.

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Source: companiesmarketcap.com

According to data from companiesmarketcap, currently, gold dominates the top 10 global assets, with a total market value of $28.4 trillion, far exceeding the combined value of the next nine assets ($26 trillion).

Even with Bitcoin surpassing $100,000, its total market value is only about $2 trillion—roughly 1/15 of gold’s total value. This underpins the core motivation behind the “digital gold” narrative emphasized by the BTC community: targeting the largest and oldest store of value in traditional finance.

Interestingly, as BTC strives toward the “digital gold” narrative, gold itself is also being “digitized.”

The immediate drivers are the repeated record highs of physical gold and the RWA wave this year, which have propelled tokenized gold products like Tether Gold (XAUT) and PAX Gold (PAXG) into rapid growth.

Since these tokens are backed by physical gold, with each issued token representing an equivalent amount of physical gold stored in secure vaults—mainly in Switzerland—these “digital gold” products are undoubtedly new financial entities in both Crypto and TradFi sectors.

( 02, The Rise of Gold RWA Wave

Using the term “rise” for tokenized gold might not be entirely precise.

Strictly speaking, neither XAUT nor PAXG, the largest and second-largest tokenized gold products, are recent “hot” launches. Instead, their current strategic significance and market attention are driven by the RWA wave and macro market conditions.

XAUT’s earliest roots trace back to late 2019. At that time, Bitfinex and Tether CTO Paolo Ardoino revealed plans to launch a gold-backed stablecoin, Tether Gold. The XAUT white paper was officially published on January 28, 2022.

The white paper clearly states that each XAUT token represents ownership of one ounce of physical gold, with Tether ensuring the backing of physical reserves equal to the issued tokens, stored in top-tier Swiss vaults.

As of this writing, XAUT’s total issuance exceeds $1.55 billion, backed by approximately 966 gold bars (totaling 11,693.4 kilograms).

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Source: Tether

In the XAUT white paper, its advantages are clearly outlined:

• Compared to physical gold, “gold stablecoins” can divide the precious metal into smaller denominations, making it easier to carry and transport, significantly lowering individual investment barriers;
• Compared to gold ETFs, they enable 24/7 trading, without custody fees, greatly improving transfer speed and efficiency;
• Tether Gold believes it can help users hold gold-backed assets while enjoying high liquidity and divisibility.

In other words, tokenization grants real gold the “digital attributes” unique to BTC, allowing it to be fully integrated into the digital world as a freely tradable, composable, and computable asset unit. This step transforms products like XAUT from mere “on-chain gold certificates” into a broad on-chain space.

Of course, this trend also prompts market reflection: when both gold and BTC become on-chain assets, are they competitors or symbiotic?

( 03, Reflection on Tokenized Gold and Digital Gold

Overall, if BTC’s core narrative is “a scarce consensus in the digital world,” then the main difference with tokenized gold (XAUT/PAXG) is “bringing scarce consensus into the digital realm.”

This is a subtle but fundamental distinction. BTC creates trust from zero, while tokenized gold digitizes traditional trust structures—similar to CZ’s recent tweet:

“Tokenized gold is not truly on-chain gold but relies on trust in the issuer’s ability to fulfill obligations. Even in extreme situations like management changes or war, users still depend on this trust system’s continuity.”

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This statement highlights the fundamental difference between tokenized gold and Bitcoin: Bitcoin’s trust is based on algorithmic consensus, with no issuer or custodian, whereas tokenized gold’s trust depends on institutional credit—trust that Tether or Paxos will strictly adhere to their reserve commitments.

This also means Bitcoin is a “trustless” product, while tokenized gold is an extension of “re-trusted” assets.

From an asset value perspective, in traditional finance, gold’s core value lies in hedging and preservation. But in the blockchain context, tokenized gold gains programmability:

• It can serve as collateral in DeFi protocols like Aave, Compound, lending stablecoins, leveraging, or yield management;
• It can be integrated into smart contract logic, becoming yield-bearing gold, with potential for gold to generate returns;
• It can be transferred freely across chains via cross-chain bridges, becoming a stable, multi-chain asset in the ecosystem.

This transformation essentially turns gold from a static store of value into a dynamic financial instrument. Through tokenization, gold is endowed with Bitcoin-like digital attributes—verifiable, liquid, composable, and computable. This means gold is no longer just a symbol of value stored in vaults but a “live asset” capable of participating in yields and generating credit on the chain.

Objectively, in today’s environment of tightening liquidity and weak ALT assets, the RWA wave has revived traditional assets like gold, bonds, and stocks in the crypto sphere. The popularity of tokenized gold precisely indicates that the market is seeking a more stable and certain on-chain value anchor.

From this perspective, the rapid development of tokenized gold under the RWA wave is not meant to (nor can) replace BTC but serves as a perfect complement to the “digital gold” narrative. It becomes a new financial asset that combines the high liquidity of digital assets with the hedging certainty of traditional gold.