Key Takeaways
Tether’s gold-backed stablecoin, XAUT, saw its market capitalization surpass $3.3 billion in the first quarter of 2026, backed by 154 tons of gold as investors increasingly seek refuge in hard assets amid geopolitical and economic uncertainty.
In its latest quarterly report, Tether attributed the token’s 36% growth to a broader “flight to hard assets” as investors hedge against global instability and shifting expectations for Federal Reserve monetary policy. The company confirmed that 707,741 XAUT tokens were in circulation, each backed by one troy ounce of physical gold held in its reserves.
The expansion comes as the total market for tokenized real-world assets approaches $31 billion, according to industry data from RWA.xyz. XAUT now accounts for more than half of the tokenized gold market, with its closest competitor, PAX Gold (PAXG) from Paxos, holding a market cap of nearly $2.2 billion. Unlike XAUT, PAXG is regulated by the New York State Department of Financial Services (NYDFS).
This growth highlights a rising demand for tokenized commodities, which provide investors exposure to physical assets without the logistical complexities of storage and security. By bringing traditional safe-haven assets like gold onto blockchain rails, these tokens offer around-the-clock trading and global settlement, features unavailable in conventional bullion markets.
The surge in XAUT’s market cap coincides with a volatile period for gold. Prices for the precious metal climbed early in the year as geopolitical tensions, including the conflict in Iran, drove investors toward safe-haven assets. Shifting expectations around potential interest rate cuts by the U.S. Federal Reserve also contributed to the demand.
While gold prices later pulled back from a peak above $5,500 per troy ounce as the U.S. dollar strengthened, the underlying demand for a reliable store of value remains strong. Gold-backed tokens like XAUT provide a liquid, crypto-native solution for traders looking to hedge against market instability without leaving the digital asset ecosystem.
The rise of XAUT and PAXG signals a structural shift in how investors access gold. These tokens blend the security of physical bullion with the efficiency of blockchain technology, removing the friction associated with buying, storing, and transferring physical gold bars or coins.
This model offers distinct advantages over traditional instruments like gold ETFs, which are bound by market hours and can involve counterparty risk. Tokenized gold, by contrast, can be traded 24/7 on global cryptocurrency exchanges and settled on-chain, providing greater flexibility and accessibility. The verifiable nature of the gold reserves, often confirmed through third-party audits, adds a layer of trust that is critical for attracting cautious capital. As the tokenized real-world asset market continues to expand, gold-backed tokens are positioned to capture a growing share of investor demand for stable, digitally-native assets.
This article is for informational purposes only and does not constitute investment advice.
