Gold on the blockchain: how a traditional asset is entering the crypto industry
Gold is the world's largest asset by market capitalization. As of July 2026, gold's market capitalization exceeds $29.3 trillion, with a price of $4,225 per troy ounce*.
* A troy ounce is a unit of weight used for precious metals in international markets. One troy ounce is approximately equal to 31.1 grams. Exchange prices for gold, silver, platinum, and palladium are usually quoted in troy ounces.
At its peak in January of the same year, the price of gold exceeded $5,500 for the first time, while its market capitalization surpassed $30 trillion. According to the World Gold Council, global gold reserves are estimated at more than 216,000 metric tonnes.
Millions of traders and investors around the world trade exchange-traded instruments based on gold. It is therefore unsurprising that cryptocurrency exchanges are unwilling to miss out on this trend and are adding gold-related trading instruments to their platforms.
The emergence of gold in the cryptocurrency market
During the early years of the digital asset market, most cryptocurrency exchanges operated as unregulated platforms and focused exclusively on cryptocurrency trading.
Initially, cryptocurrency exchanges offered major cryptocurrencies such as Bitcoin (BTC), Ethereum (ETH), and various other altcoins, as well as stablecoins such as Tether (USDT) and USDC (USDC).
It was only after 2017 that some major cryptocurrency exchanges, such as Binance, began offering trading pairs with fiat currencies, including the US dollar (USD), euro (EUR), British pound (GBP), and others.
To launch gold-related instruments, cryptocurrency exchanges would have needed licenses, reliable infrastructure for storing and accounting for physical metal, as well as mechanisms for verifying the assets backing these instruments. Therefore, no gold-based trading instruments existed in the cryptocurrency market before 2019. This was due to two main reasons:
- First, the absence of gold from cryptocurrency exchanges was caused by low demand, as the cryptocurrency market was dominated by digital assets that primarily attracted a niche category of investors. Meanwhile, clients of traditional trading platforms showed little interest in trading cryptocurrency instruments.
- Second, the cryptocurrency market's infrastructure was still underdeveloped. Storing digital assets is a relatively straightforward process that requires only specialized wallets and private keys.
Gold, however, is different: it is a physical rather than a digital asset. Adding gold to cryptocurrency platforms would have required entirely different and considerably more complex infrastructure, including:
- Secure vaults;
- Clearing* mechanisms;
- Compliance with regulatory requirements.
* Clearing is a system for verifying and finally settling obligations between the parties to a transaction. During the clearing process, it is determined who must transfer money or assets, to whom, and in what amount. Such a mechanism is particularly important for gold trading because it ensures consistency between completed transactions, cash settlements, and the actual transfer of the precious metal from the seller to the buyer.
Types of gold-based instruments
Tokenized products
The first exchange-traded products based on gold appeared in the cryptocurrency market only in 2019. Paxos Trust Company, a well-known stablecoin issuer, launched a revolutionary product: tokenized gold called PAX Gold (PAXG). PAX Gold was pegged to the US dollar and fully backed by physical gold bars compliant with the London Good Delivery standard.
Bitfinex became the first cryptocurrency exchange to begin trading tokenized gold.
During the first years of its existence, tokenized gold remained a niche instrument available on only a limited number of cryptocurrency exchanges.
However, digital asset issuers recognized the potential of tokenized gold, and following Paxos, Tether launched its own tokenized product, Tether Gold (XAUt), in the first quarter of 2020.
By 2022, the market capitalization of PAXG had exceeded $500 million for the first time, while the capitalization of XAUt had surpassed $400 million. By the beginning of 2026, the number of tokenized gold-based products had exceeded ten, while their combined market capitalization approached $6 billion.
More than 90% of this figure was accounted for by just two tokenized products: PAX Gold and Tether Gold. According to data for the first quarter of 2026, tokenized gold trading volume exceeded $90 billion.
Tokenized gold became one of the fastest-growing segments of the RWA* market in 2025–2026. In addition, RWAs have also affected the physical gold market.
* RWA, or Real World Assets, are real-world assets whose ownership rights are converted into digital form and recorded on a blockchain using tokens. RWAs may include gold and other precious metals, real estate, shares, bonds, government securities, commodities, works of art, claims, fund shares, and other assets that exist outside the blockchain.
Issuers of tokenized gold-based products are actively increasing their precious metal reserves. For example, Tether's reserves already contain approximately 130 tonnes of physical gold, while its vault holdings are increasing by around two tonnes every week.
This is driven by growing demand for tokenized gold, which its underlying assets must fully back. Over the past year alone, XAUt's market capitalization has grown by more than one and a half times, from $1.5 billion to $2.5 billion.
Derivatives
At the beginning of 2026, Binance launched a range of perpetual contracts* linked to traditional assets and settled in the USDT stablecoin. One of the first instruments in this category was the XAUUSDT contract, whose value depends on changes in the price of gold.
* Perpetual contracts are derivatives, meaning financial instruments whose value depends on the price of an underlying asset, such as gold. They allow traders to profit or incur losses from movements in the price of the underlying asset without purchasing it directly. Perpetual contracts have no fixed expiration date, meaning a trading position can be held indefinitely, provided that the exchange's requirements are met.
In June 2026, OKX, one of the largest cryptocurrency exchanges, launched X-Perps, a perpetual contract-based trading instrument, for gold under the GoldUSD ticker.
In the same month, OKX launched a second gold trading product: XAU event contracts that track the price of tokenized gold.
Perpetual gold contracts are also available on other cryptocurrency exchanges, including Bybit, Bitget, and Hyperliquid.
Hybrid instruments
In addition to tokenized gold and perpetual contracts, cryptocurrency exchanges already offer solutions launched through integration with TradFi* infrastructure.
* TradFi, or Traditional Finance, refers to conventional financial institutions and services, including banks, brokers, stock and commodity exchanges, investment and insurance companies, payment institutions, and other participants in the traditional financial market. The term is commonly used to distinguish conventional financial products and services from cryptocurrencies, blockchain platforms, and decentralized finance.
Such solutions are implemented through specialised trading terminals such as MetaTrader and include CFDs* — contracts for difference — and other derivative financial instruments. For example, similar contracts are already available on the Bybit and Bitget cryptocurrency exchanges.
* A CFD, or Contract for Difference, is a contract that allows traders to speculate on changes in an asset's price without actually purchasing the asset. When a position is closed, the parties settle the difference between the opening price and the current price. For example, when trading a CFD on gold, an investor does not receive a physical gold bar but earns a profit or incurs a loss depending on movements in the gold price.
How cryptocurrency exchanges compete with brokers
With the emergence of tokenized gold-based products, cryptocurrency exchanges are now competing not only with one another but also with traditional service providers — brokers. Their ability to compete successfully is supported by the expansion of crypto platforms' audiences and the growth of their trading volumes.
The number of cryptocurrency exchange users is increasing alongside trading volumes. Since 2023, trading volume on cryptocurrency exchanges has grown by almost 80%, from $50 billion to $89 billion. In 2025, during a period of growth in the cryptocurrency market, this figure increased from $200 billion to a record $500 billion in just one day.
Growing demand for cryptocurrency exchange services, including tokenized gold trading, is driven by at least two factors:
- Settlement speed and accessibility. Cryptocurrency exchanges provide access to trading instruments around the clock. Standard gold-based products operate during the same hours as those offered by traditional brokers, while derivative financial instruments are available at all times;
- All instruments on a single platform. Some exchanges already allow their clients to trade both cryptocurrencies and traditional instruments, including gold, oil, shares, and stock market indices, eliminating the need to switch between multiple platforms.
Cryptocurrency exchanges are therefore gradually evolving into universal trading platforms. By expanding the range of available instruments, they are successfully attracting participants from the traditional financial market, particularly those interested in gold trading.