An organization behind one of the world’s most successful gold ETFs is now taking aim at the crypto-native gold market. The World Gold Council (WGC) has introduced a new framework designed to standardize tokenized gold, potentially disrupting dominant players like Tether Gold (XAUT) and PAX Gold (PAXG).
“Gold as a Service” — A New Standard
The WGC, which helped launch the first U.S. gold-backed ETF (SPDR Gold Shares), is proposing a system called “Gold as a Service.”
This framework would:
- Provide a shared infrastructure for custody and issuance
- Enable continuous auditing of gold reserves
- Create interoperability between different gold tokens
- Standardize how physical gold is managed and represented on-chain
The goal is to make tokenized gold more accessible and trustworthy—similar to how ETFs standardized gold investing decades ago.
Challenging Tether and Paxos Dominance
Today’s tokenized gold market—worth roughly $4.9 billion—is largely controlled by Tether and Paxos, each operating their own closed systems for custody, issuance, and redemption.
- Tether Gold stores reserves in private vaults
- Paxos uses London vault infrastructure
- Each product has its own audit and redemption processes
This fragmentation creates barriers to entry and limits interoperability between products.
The WGC’s framework aims to break that model by offering a shared backend that any issuer can use—potentially opening the door to hundreds of new gold-backed tokens.
Bringing ETF-Style Infrastructure On-Chain
The WGC is essentially applying the ETF playbook to blockchain.
Just as ETFs standardized access to physical gold in traditional markets, this framework aims to:
- Increase transparency and trust
- Lower costs for new issuers
- Expand market participation
- Improve fungibility across tokenized gold products
The council’s track record is significant—its flagship gold ETF now has a market cap exceeding $100B+, dwarfing the current tokenized gold market.
Why This Matters
This development signals a major shift in real-world asset tokenization:
- Traditional finance players are entering crypto-native markets with infrastructure advantages
- Tokenized gold could evolve from niche products into standardized financial instruments
- First movers like Tether and Paxos may face increased competition and reduced moat
More broadly, it shows that the future of tokenization may not be dominated solely by crypto-native firms—but by institutions bringing proven financial models on-chain.
