World Gold Council Challenges Tether and Paxos With New Tokenized Gold Framework

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.