Gold Council Proposes Framework for Tokenised Gold

The World Gold Council, working in partnership with Boston Consulting Group, has introduced a proposed framework aimed at standardising tokenised gold products, which could reshape competition with existing issuers such assuch as Tether and Paxos.

Outlined in a jointly authored white paper, the framework, branded “Gold as a Service,” is designed to create a shared infrastructure for digital assets backed by physical gold. The initiative aims to address longstanding operational challenges in the sector and promote greater consistency and trust across issuers.

Founded in 1987, the World Gold Council represents 29 members from across the global gold mining industry and has historically played a central role in expanding institutional access to gold investment products.

Shared Infrastructure and Market Access

At the core of the proposal is a platform that would enable token issuers to rely on a shared network to manage their underlying gold reserves. By abstracting away the complexities of custody, storage, and verification, the council aims to lower barriers to entry for firms seeking to launch gold-backed digital assets.

The model includes features such as continuous auditing and standardised processes, which are intended to improve transparency and enhance fungibility between different tokenised gold products – an issue that has fragmented the market to date.

Currently, the sector is dominated by crypto-native firms that have built vertically integrated systems. Both Paxos and Tether operate proprietary custody arrangements and issuance pipelines, effectively controlling the full lifecycle of their gold-backed tokens.

Building Trust Through Standardisation

In discussing the initiative, Mike Oswin, the organisation’s Global Head of Market Structure and Innovation, drew a parallel to consumer technology branding.

“If you see that little symbol, you know that it’s Intel inside,” he said. “You’re getting the best processor, so you know you’re walking out with what you need.”

The comparison underscores the council’s objective: to establish a recognisable standard that signals quality and reliability across tokenised gold offerings, regardless of issuer.

The move also reflects a broader strategic effort to extend the council’s influence into digital asset markets. The organisation previously supported the launch of SPDR Gold Shares in 2004, the first U.S.-listed ETF backed by physical gold, which today has a market capitalisation of $126 billion.

Market Landscape and Structural Constraints

Despite that legacy, tokenised gold remains a relatively small segment. Tether Gold and PAX Gold have reached a combined market capitalisation of $4.9 billion since launching roughly five years ago, according to CoinGecko.

Both products rely on dedicated storage infrastructure. Paxos holds reserves in London vaults operated by Brink’s, while Tether stores gold in a Swiss facility that previously functioned as a Cold War-era nuclear bunker.

The need for bespoke custody arrangements remains a key constraint. Unlike cryptocurrencies such as Bitcoin, which can be self-custodied digitally, gold is a physical asset with inherent logistical complexities.

“At the end of the day, gold is a physical asset that comes in different sizes, shapes, forms, and locations,” Oswin said. “It’s always been an inhibitor to these kinds of initiatives.”

Research from the World Gold Council suggests that investors who prefer self-custody in digital assets often lean toward direct ownership of physical gold, in part due to these structural limitations.

Cost Dynamics and Growth Potential

Tokenised gold also differs from other real-world assets, such as stablecoins, which are typically backed by yield-generating instruments such as cash or U.S. Treasuries. Gold, by contrast, does not produce income and incurs storage and security costs.

The proposed “Gold as a Service” model is intended to mitigate these challenges by streamlining access to physical reserves and reducing operational overhead for issuers.

Oswin argued that simplifying these processes could significantly expand the market.

“Instead of a handful of successful products, this will potentially lead to hundreds of products that can now come to market,” he said. “The business case stands up much better because of the way they can access the physical gold in a simplified, more cost-effective way.”

If adopted broadly, the framework could reshape how tokenised gold products are issued and managed, potentially opening the market to a wider range of participants while introducing greater standardisation across the asset class.