World Gold Council Proposes “Gold as a Service” Framework Impacting Tokenized Gold Market

• The World Gold Council created “Gold as a Service” to facilitate standardized tokenized gold infrastructure and make markets more efficient.
• This framework has the potential to significantly change the competitive landscape of Tether Gold (XAUT) and Paxos Gold (PAXG).

The World Gold Council created a “Gold as a Service” framework to help modernize tokenized gold infrastructure worldwide. It does this by connecting physical gold custody and digital issuance systems, allowing companies to issue gold-backed products more efficiently. It is built on three levels of physical custody, digital issuance, and synchronization systems that connect assets and blockchain records.

The World Gold Council CEO, David Tait, said, “Financial services are undergoing a rapid and pervasive digital transformation.” He further added that shared infrastructure would help in improving accessibility, tradability, and integration of gold in modern financial systems worldwide.

Impact on Tether Gold and Paxos Gold Market Leaders

Currently, Tether Gold (XAUT) and Paxos Gold (PAXG) currently dominate the overall tokenized gold market. Also, they collectively command a large market share in the overall market worldwide. Both of these operate on different systems for custody, audit, and redemption, and this is causing fragmentation in the overall digital gold market worldwide. 

The new framework also outlines a set of standardized processes that include custody coordination, compliance checks, and redemption systems that are to be followed on all platforms globally. Such a framework would ensure that all platforms are aligned in terms of regulatory compliance. It has been noted that such a platform can enable hundreds of new issuances to happen in a more efficient manner.

The Potential and Development Mark

The platform can potentially lead to lower operational costs as well as better integration between tokenized gold assets on various blockchain platforms globally. This can further increase adoption rates among institutional investors as well as fintech companies that are entering the tokenized commodity space. Officials emphasized that the platform focuses on enabling growth. Rather than targeting existing issuers in the space.

The development marks a significant convergence between traditional gold markets and blockchain technology as the adoption of digital assets continues to gain momentum globally. Analysts noted that tokenized gold can act as a major growth driver in traditional gold markets globally.

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