Since the start of 2026, persistent global inflationary pressures and geopolitical uncertainties have significantly boosted investor preference for physical assets. While traditional investors typically opt for physical bullion or gold ETFs, crypto-native users—accustomed to 24/7 trading and on-chain operations—find that tokenized gold and silver products offer a much more attractive bridge.
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High Liquidity and Accessibility
Traditional physical gold trading is often restricted by banking hours, complex storage requirements, and high minimum purchase thresholds. In contrast, tokens like XAUT and PAXG divide gold into tiny units, allowing users to hold gold positions for as little as a few dozen dollars. This "fractional ownership" drastically lowers the barrier to entry.
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Cross-Platform Trading and DeFi Integration
Most of these tokens are issued on major public chains like Ethereum, meaning users can exchange them on Decentralized Exchanges (DEXs) at any time or even use them as collateral in lending protocols. During periods of intense market volatility, users can quickly pivot to precious metal-pegged tokens to hedge their positions without needing to exit into fiat currency.
Comparison of Leading Gold Tokens: XAUT vs. PAXG
In the current tokenized gold market, XAUT (issued by Tether) and PAXG (issued by Paxos) hold the vast majority of market share. While both claim to be backed 1:1 by physical gold, there are subtle differences in their regulatory attributes and operational mechanisms.
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| Feature | PAXG (Pax Gold) | XAUT (Tether Gold) |
| Regulatory Body | Regulated by the NYDFS | Issued by a Tether affiliate (Switzerland-based) |
| Underlying Audit | Regular third-party audits with high transparency | Provides gold bar lookup tools and quarterly reports |
| Transaction Fees | 0.02% fee on-chain (plus Gas fees) | No additional on-chain management fees (only Gas) |
| Primary Advantage | High compliance; suitable for institutional users | High ecosystem activity and superior liquidity on some platforms |
The Rise of Tokenized Silver: Opportunities Amid Volatility
Compared to gold, silver’s performance in 2026 has been particularly aggressive. Driven by a surge in industrial demand—especially in the renewable energy sector—silver's price gains have occasionally outpaced gold. The surge in silver token trading volume reflects crypto traders' appetite for high-volatility safe-haven assets. Tokenization not only captures the price appreciation of the metal but also eliminates the storage and logistics costs typically associated with silver's bulk.
Non-Negligible Potential Risks
While tokenized gold and silver assets are performing exceptionally well in the current market, they are financial innovations and are not without risk.
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Centralized Custody Risk: Regardless of the technology, the value of these tokens ultimately depends on the issuer actually holding the equivalent amount of physical metal. If the custodian faces financial distress, security breaches, or legal disputes, users may face redemption risks.
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Regulatory Uncertainty: In 2026, the legal definitions for RWA (Real-World Assets) are still evolving. If certain tokens are classified as unregistered securities, they could face delisting or liquidity droughts.
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Smart Contract Vulnerabilities: Like all on-chain assets, these tokens rely on code. Any undiscovered vulnerability in the underlying contract could lead to asset loss via hacking.
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Price De-pegging Risk: During periods of extreme market stress, if liquidity cannot keep up with trading demand, the secondary market price of the token may temporarily deviate (de-peg) from the spot price of the physical metal.
Conclusion
The rise of tokenized gold and silver marks a deep integration between crypto assets and traditional finance. Driven by safe-haven demand, XAUT, PAXG, and silver tokens provide crypto users with convenient hedging tools. However, when engaging in these trades, users should remain fully aware of the centralized custody and technical risks involved, avoiding impulsive moves during price peaks.
As the RWA sector matures, future tokenized metals may introduce more decentralized auditing mechanisms and more transparent Proof of Reserves.