Tokenised gold attracts two equally unhelpful reactions: that it is a scam, and that it makes physical ownership obsolete. Neither survives contact with the product. This edition is a diligence framework rather than a recommendation — we are not licensed to give investment advice and this is not any.
What the product is
A well-structured gold token is a transferable claim on a specific quantity of allocated bullion held in a segregated, audited vault. Allocated means specific bars, identified by serial number, refiner and assay, held for the token holder rather than owed to them. Segregated means those bars are not on the issuer's balance sheet and are not available to its creditors.
That structure is what distinguishes the category from two things it is often confused with. It is not a synthetic price exposure — nobody is writing you a derivative payoff. And it is not an unallocated account, where you are an unsecured creditor of the institution holding the metal. If a token cannot demonstrate allocation and segregation in its legal documentation, it is a different product with a similar marketing page.
What MiCA changed
Europe's Markets in Crypto-Assets regulation, phased into full application through 2024 and 2025, is the first comprehensive regime anywhere to treat asset-referenced tokens as a regulated category rather than an unclassified oddity. It imposes authorisation, reserve composition and custody requirements, disclosure obligations in a published white paper, and ongoing reporting.
The effect has been to raise the floor rather than pick winners. Compliance costs pushed some issuers out of the European market entirely. The ones that stayed now clear a documentation bar that most institutional treasuries need before they can even open a diligence file. Whether that translates into better outcomes for holders is a question the regime has not yet been stress-tested on.
Elsewhere the picture is more fragmented. Several US-facing platforms have taken money-transmitter or trust-charter routes while federal treatment remains unsettled. Singapore, Switzerland and the UAE each have workable frameworks with materially different emphases. The practical implication for an allocator is that jurisdiction selection is upstream of product selection, not downstream of it.
The seven questions
- Who holds the metal, and where? Name the vault operator and the jurisdiction. A logo is not an answer.
- Is it allocated and segregated, in the legal documents rather than the marketing? Ask for the custody agreement, not the FAQ page.
- Who audits, how often, and to what standard? An annual PDF is weaker than a continuous attestation reconciling bar list to on-chain supply. Ask what the auditor is actually attesting to — existence, ownership, or both.
- What happens on redemption? Minimum size, fees, delivery locations, lead time, and what a redemption gate looks like if one exists. Read the gate clause before you need it.
- Who can upgrade the smart contract, and can they freeze or seize balances? Almost every token has an administrative key. Knowing who holds it and under what governance is not optional.
- What is the fee structure over a decade, not a year? Storage fees compound. A published annual rate is easy to compare; the transaction, minting and redemption fees around it usually are not.
- What is the issuer's own solvency situation? Segregated metal survives issuer failure in theory. In practice you are relying on a legal structure holding up in an insolvency court in a specific jurisdiction. Which one?
What tokenisation does not fix
Tokenised gold relocates counterparty risk; it does not remove it. Holding a token means depending on an issuer, a custodian, an auditor, a chain, and a smart contract, in place of depending on a vault operator or on your own storage. That trade can be entirely rational — the operational convenience is real, divisibility is genuinely useful, and settlement is faster than any physical alternative — but it is a trade, not an upgrade.
The clearest way to think about it: a token is an ownership wrapper, and every wrapper adds a link to the chain between you and the metal. Count the links. Ask what happens if each one fails.
On the programme
Tokenisation is discussed on 10 October in the allocation workshop and in the roundtable tracks, from a position we will state plainly in advance: it will not replace physical gold, and its more interesting effect is onboarding investors who later graduate to allocated storage.
The Academy course on digital and tokenised gold walks through the checklist above with worked examples of documentation to request.