Gold-backed token (commodity stablecoin)

Commodity-backed tokens link each unit to a physical asset kept by a custodian. In the most common case, one token equals one fine troy ounce of gold stored in a professional vault, often London Good Delivery bars with recorded serial numbers. The issuer mints tokens when it buys metal and burns them when holders redeem, either for physical delivery above a minimum size or for cash.

PAX Gold (PAXG) and Tether Gold (XAUT) are the largest examples. They let investors hold gold on a blockchain, move it around the clock, split it into small fractions and use it as collateral in some DeFi protocols. Other projects have tried oil, silver or carbon credits with far less traction.

Calling them stablecoins is loose: they track the price of gold, which moves every day, not a currency. Holders also take on custody and issuer risk, rely on periodic vault attestations and face fees, minimum amounts and jurisdiction limits when redeeming. In the EU, MiCA treats tokens referencing a commodity as asset-referenced tokens.