Previous Attempts at Digitizing Gold

Efforts to digitize gold aim to make it more accessible, liquid, and easier to trade. A notable success in this area is gold-backed exchange-traded funds (ETFs), which allow investors to buy shares representing ownership of gold without needing to physically own the metal. Gold-backed ETFs have lowered barriers to entry, offering liquidity and the convenience of trading on stock exchanges. However, they still require physical gold storage, and investors face management fees, tracking errors, and counterparty risks.

Digital gold platforms offer another approach by enabling fractional ownership of gold stored in secure vaults, allowing users to buy and sell small amounts electronically. While these platforms could democratize gold investment, they face challenges like regulatory compliance, transparency, and security, limiting their widespread adoption. For example, PAX Gold has tokenized gold but includes transaction fees for peer-to-peer transfers, higher redemption fees, no option for redeeming smaller amounts directly, centralized smart contracts, and unfavorable jurisdictional choice, such as the NYDFS as the regulating authority, which discourages global investors. Similarly, Tether Gold offers more trading volume and liquidity but faces constraints that deter serious investors. Its gold is sourced from external suppliers without a vertically integrated supply chain, unlike XRB DAO, which controls its entire supply chain, directly benefiting XRB Gold token holders.

The quest to fully digitize gold continues, with emerging technologies like blockchain offering new possibilities. However, the complexities of physical gold and the need for strict security and authenticity standards remain challenges. XRB Gold stands out by offering a 3:1 reserve ratio, perfectly aligning with Basel III and ISO 20022 standards, which provides a higher degree of security and confidence for investors. As the market evolves, the balance between physical and digital gold will likely shift, driven by innovations that seek to overcome these barriers while preserving gold’s role as a trusted store of value.