How blockchain is changing the rules in gold, grain, and gas markets

The tokenization of real-world assets (RWA) is one of the fastest-growing trends in the crypto industry. While digital assets were once abstract and "virtual," blockchain is increasingly becoming a bridge between the physical and digital worlds.

What is commodity tokenization?

Commodity tokenization is the process of issuing a digital token on a blockchain that represents ownership of a physical asset — such as a gold bar, a barrel of oil, a ton of copper, or a kilogram of coffee. These tokens can be:

• Fully-backed 1:1 tokens — physically stored in certified vaults and redeemable for the underlying asset;
• Functional derivatives — representing a share or a futures contract for the asset.

Real-world cases of commodity tokenization

Gold: Paxos Gold (PAXG) and Tether Gold (XAUT)

PAXG and XAUT are among the first and most recognized gold-backed stablecoins. Each token is backed by one troy ounce of gold stored in secure vaults in London and Zurich. These tokens are used for inflation hedging, collateral in DeFi platforms, and international settlements. As of 2025, the total market for tokenized gold surpassed $2.7 billion.

Diamonds: Diamond Standard Fund

The Diamond Standard Fund offers tokens backed by physical diamonds. Tokenized by Oasis Pro and available via the InvestaX platform, it enables investors to treat diamonds as a transparent and liquid asset class.

Natural gas: Tether

Tether, the issuer of the leading stablecoin USDT, is actively exploring energy tokenization. In 2025, it announced plans to launch tokens backed by natural gas to improve transparency and efficiency in energy trading.

Agricultural commodities: GrainChain

GrainChain is a U.S.-based agrotech company integrating blockchain and IoT into the agricultural sector. One of its key areas is the tokenization of crops like wheat, corn, and soy. Each token represents a specific volume of grain physically stored in certified elevators in the U.S., Mexico, Honduras, and other Latin American countries.

Challenges in commodity tokenization

Trust in backing

A significant issue is verifying the backing of tokens with physical assets. This requires:

• Independent auditors to verify storage inventories;
• Custodial services to secure the assets;
• Insurance against loss, damage, or force majeure;
• On-chain verification using oracles to link storage data to the blockchain.

Legal status

Globally, commodity-backed tokens are still not legally recognized as ownership documents in most jurisdictions. A 2025 BIS report noted:

• Only 7 of the 38 G20 countries have implemented frameworks recognizing RWA tokens as legally binding financial instruments.
• In the U.S., RWA status depends on the interpretations of the SEC and CFTC. In the EU, it is partially covered by the Markets in Crypto Assets (MiCA) regulation.
• In Latin America (e.g., Argentina, Brazil), RWAs are used in practice but lack clear legal standing in court.

Volatility and DeFi risks

Many RWA tokens are traded on decentralized exchanges (DEXs), which lack centralized investor protections and market oversight.

• According to Chainalysis (2025), 15% of RWA tokens launched in DeFi protocols faced critical vulnerabilities or hacks over the past two years.
• The volatility of commodity-backed tokens in DeFi is 3–5 times higher than that of the underlying assets in traditional markets (Kaiko, Q1 2025).

Outlook: will crypto transform the commodities market?

Commodity tokenization doesn't aim to replace traditional commodity exchanges or physical infrastructure. Instead, it introduces a technological layer that enhances global commodity markets.

One key advantage is the ability to access capital through physical assets. Stocks of gold, copper, grain, or platinum stored in vaults can be tokenized and used as collateral to obtain funding — either through traditional finance or DeFi protocols. This is crucial for producers and traders who possess assets but face liquidity constraints.

Another significant benefit is the democratization of participation in commodity markets. Tokenization allows retail investors to invest in commodities via fractional tokens. While buying physical platinum or oil was once the domain of large players, now individuals with any budget can participate.

Tokenization also improves settlement and delivery processes. Smart contract integration automates deal execution, reducing human error, delays, and default risk. This is especially valuable for cross-border transactions, where traditional methods can take weeks to complete. Digital tokens transfer instantly, and ownership is verifiable on-chain.

Finally, commodity tokens are increasingly used as collateral and hedging tools. In DeFi, they can be leveraged for loans, derivatives, or price risk insurance — offering new risk management models for farmers, exporters, and industrial firms.

In summary, commodity tokenization is not merely an optimization tool — it is shaping a new operating model for global markets, one that is more transparent, flexible, and inclusive.