Tokenized Gold Explained: PAXG and XAUT vs Gold ETFs and Bullion

Yes, for the two largest tokens, according to their issuers’ attested reports. Tokenized gold is a digital token on a blockchain that stands for a fixed weight of gold held in a vault. Pax Gold (PAXG) and Tether Gold (XAUt) each say one token equals one fine troy ounce of gold in London Good Delivery bars, the large bars (about 400 ounces) that banks trade. The token is how ownership is recorded and moved; the gold stays in the vault.

Paxos’s report for September 30, 2026 shows 435,306 PAXG outstanding and exactly 435,306 fine troy ounces held, and KPMG’s examination found that statement fairly presented (Paxos). Tether’s report for June 30, 2026 shows 707,747 ounces of gold held against 707,747 tokens minted, of which 612,824 had been sold to customers and the rest were held by the issuer for sale, with a reasonable-assurance report from BDO Advisory Services (Tether Gold). An attestation is a point-in-time check of one statement, not an audit of the company.

Scope: gold-backed tokens compared with physical bullion and US gold ETFs, for a US investor, as of October 26, 2026. It does not cover gold mining stocks, gold futures, or tokens that only track the gold price without metal behind them. Education, not advice; the wider picture of what a token can and cannot be is in tokenization explained.

Small. There is no official total for the category, so the figures below are issuer counts of ounces, valued at the gold price on each report date. The price is an Exent calculation from the SPDR Gold Trust’s published net asset value per ounce, which the trust sets using the LBMA Gold Price PM: $4,176.30 an ounce on September 30, 2026 and $4,026.05 on June 30, 2026.

One linear scale, gold in tonnes. PAXG outstanding tokens plus XAUt sold tokens represent about 1.05 million ounces (this excludes XAUt minted but not yet sold), roughly 3% of what GLD alone holds (the report dates differ by a quarter). Tether’s own report values the sold tokens at $2.46 billion using its price of $4,008.02; the small gap is the price source. Both tokens are growing, but the order of magnitude is what matters: tokenized gold is a niche next to the exchange-traded funds covered in GLD vs IAU vs GLDM.

You own a token whose terms give you a claim on gold held by the issuer’s custodians. Each layer is a party you depend on:

Paxos says each PAXG represents an allocated ounce of London Good Delivery gold, stored with Brink’s and ICBC Standard Bank in LBMA-approved vaults. Tether Gold’s terms say each XAUt reflects “an undivided specific interest” in one ounce of its gold reserves in Switzerland, and that the issuer may reassign which bar backs your token without notice. The SPDR Gold Trust holds allocated bars at JPMorgan and HSBC, publishes a daily bar list and has the vaults counted twice a year by an inspector (SPDR Gold Shares).

Same metal, different wrappers. Terms below are the issuers’ own, read on October 26, 2026.

Sources: Paxos fee page and PAX Gold terms (sections 11.4 and 14), Tether Gold fee schedule and terms (updated January 27, 2025 and September 9, 2025), the SPDR Gold Trust site, and the ETF fee figures used in GLD vs IAU vs GLDM. Paxos’s fees apply to buying and selling in the Paxos wallet; on an exchange you pay that exchange’s trading fee and spread instead. SIPC protects custody of securities at a failed member broker, never market losses (SIPC coverage).

Hold the gold price flat so only costs show. Fund and token fees are the published ones above. Physical gold has no published fee, so its row uses assumptions, labelled as such: a 2% premium over spot to buy coins or small bars and 1% below spot to sell, stored at home with no insurance. Replace them with your dealer’s quotes. Hypothetical illustration, not a quote.

The fund rows are real, not just theory: GLD’s gold per share fell from 0.09348 ounces on October 22, 2021 to 0.09165 ounces on October 23, 2026, a 1.96% loss of metal over five years, because the trust sells gold to pay its 0.40% fee (SPDR Gold Trust historical data). Three things the table leaves out: trading spreads, which can be wider for tokens on thin exchange markets; crypto network fees for every transfer; and taxes, below. A fee waiver can end, and Paxos changed its redemption schedule on September 1, 2026, so check the current page before relying on any row.

The IRS treats digital assets as property, and brokers report digital-asset sales on Form 1099-DA from 2025 (IRS). For non-fungible tokens it uses a “look-through” test: an NFT that certifies ownership of a gem is itself a collectible (Notice 2023-27). Gold tokens are fungible, so that notice does not cover them directly, and whether its reasoning extends to gold tokens has not been addressed. Short-term gains are taxed as ordinary income either way. This is unsettled: ask a tax adviser before you rely on any rate. The ETF rules are explained in GLD vs IAU vs GLDM.

The gold can be fine while the wrapper fails. The risks, with what each issuer’s own documents say:

The last row is the one a wrapper cannot fix. How gold behaved in past selloffs, and what a small position did to a stock portfolio, is in should I add gold to my portfolio? and is gold a good hedge?

It fits people who already keep money on blockchains: crypto traders who want gold exposure without leaving the crypto system, people who need to move value outside banking hours, and non-US holders for whom a US ETF is awkward. It is also one of the few tokenized assets where you can, in principle, take delivery of the real thing, if you hold at least 430 ounces.

Counterexample: a US saver with $10,000 in a brokerage account or IRA who wants a small gold slice. A low-cost gold ETF costs less than PAXG at that size once the purchase waiver ends, sits in the existing account with SIPC custody protection, and needs no wallet. XAUt is not offered to them at all. For that investor, the token adds steps, not value. Gold’s own role next to silver and stocks is in the gold/silver ratio history.