Gold stablecoins: an alternative to investing in gold

What are

In 2025, gold posted record growth: during this period, the price of the precious metal increased by more than 50%, the best result since 1979.

This attracted investors' attention to the so-called "gold stablecoins", whose capitalization has also increased several times over the past year.

What are "gold stablecoins"?

"Gold stablecoins" are cryptocurrencies that are pegged to the price of physical gold.

Gold stablecoins are also called tokenized gold. The only difference between gold stablecoins and regular stable cryptocurrencies is that their price is pegged to the value of gold rather than to a national currency, as in the case of Tether (USDT) or USDC (USDC). In addition, gold stablecoins are backed by physical gold reserves.

Owners of gold stablecoins can exchange these cryptocurrencies for gold at a 1:1 ratio. As a rule, the reserves of gold stablecoin issuers are verified and confirmed by third-party auditing companies. The value of each gold-backed token corresponds to 1 troy ounce of real precious metal.

The issuance mechanism of gold stablecoins is directly connected to the collateral backing the cryptocurrency. New assets are issued when reserves of physical gold increase. When reserves of real gold decrease, the issuer removes an equivalent amount of gold stablecoins from circulation. This process is managed through specialized smart contract functions.

Gold stablecoins attracted investors' attention in 2025 because gold itself outperformed many cryptocurrencies, including the main digital assets, Bitcoin (BTC) and Ethereum (ETH), in terms of growth rates.

Over the past year, the value of gold stablecoins has increased by almost 20%, placing them among the top 30 digital assets by growth. For comparison, Bitcoin lost 20% of its value over the year, while Ethereum lost more than 30%.

Why are gold stablecoins attractive?

Gold stablecoins have several advantages over traditional gold, whether in physical or digital form. Among these advantages are:

The ability to trade 24/7 and store them securely in a wallet alongside other digital assets.
Access to a wide range of services in the decentralized finance market: gold stablecoins can be used as collateral for lending, added to liquidity pools, and used for farming to generate additional income.
Maintaining anonymity when using gold stablecoins (except when trading on centralized exchanges that require customer identification).
The ability to purchase, use, and transfer gold stablecoins without restrictions.

At the same time, gold stablecoins lack the main disadvantages of the traditional asset:

High costs associated with storage, transportation, and security;
Legal complexities arise when transferring the asset to another owner or moving it to another account.
Possible account freezes, including those caused by mistakes on the part of the custodian.

However, the risks of gold stablecoins, including the need to trust their issuers, should also be considered. It is important to understand that issuers centrally control the smart contracts for gold stablecoins and may restrict certain operations if necessary. Another risk is the still underdeveloped regulatory framework, which prevents a more active inflow of capital.

Another disadvantage of gold stablecoins is their relatively low liquidity, compared with many major cryptocurrencies. As of March 2026, the share of gold-based crypto assets accounts for less than 1% of the entire stablecoin market.

With significant trading volumes, there is a risk that gold stablecoins may deviate substantially from the price of the underlying asset. However, it should be noted that over the past year, amid the growing popularity of gold stablecoins, their liquidity has also increased significantly.

Which gold stablecoins are circulating on the market

The leader among gold stablecoins is the first asset in this segment, Tether Gold (XAUT), which appeared on the market back in early 2020. XAUT was issued by Tether — the same issuer of the largest stablecoin on the market, USDT.

The market capitalization of XAUT as of March 2026 is $2.9 billion. Over the past year, this figure has increased more than fourfold.

Following XAUT in the gold stablecoin category is PAX Gold (PAXG), issued by the company Paxos, which is also responsible for issuing the major stablecoins PYUSD and USDP. The market capitalization of PAXG has reached almost $2.6 billion, and over the past year it has grown more than 4 times.

There are also other gold stablecoins on the cryptocurrency market, but their market capitalization is significantly smaller compared with the leading digital assets in this segment:

Matrixdock Gold (XAUM) — $63.4 million;
Comtech Gold (CGO) — $23.4 million;
Tether Gold Tokens (XAUT0) — $22.3 million.