ETF Giant Targets Tether and Paxos With Gold Token Plan

The World Gold Council's tokenized gold framework, released Thursday alongside a Boston Consulting Group white paper, is a direct shot at Tether and Paxos — two companies that have spent years building their own custody and issuance infrastructure for gold-backed tokens. The Council wants to replace all of that with a shared platform. Whether the market listens is another question.

Gold as a Service — What the World Gold Council Is Actually Proposing

What is Gold as a Service?

Gold as a Service is a shared-infrastructure concept the World Gold Council laid out Thursday in a white paper co-written with Boston Consulting Group. The idea: companies that want to issue gold-backed tokens shouldn't have to reinvent the wheel on custody, auditing, and reserve management. Instead, they'd plug into a common network that handles all of it.

Right now, that's not how the market works. Paxos built its own pipeline — reserves held in London vaults managed by Brink's, a security services provider. Tether went a different direction, housing the physical gold backing its token in a Swiss vault that reportedly once functioned as a Cold War-era nuclear bunker. These are bespoke arrangements, expensive to build, and not designed with interoperability in mind.

The Council's pitch is fungibility across products, continuous audits to build investor trust, and a simplified cost structure that makes the business case viable for smaller issuers. Mike Oswin, the Council's Global Head of Market Structure and Innovation, compared it to something you've probably seen on the bottom of a laptop.

If you see that little symbol, you know that it's Intel inside. You're getting the best processor, so you know you're walking out with what you need.

Tether Gold and PAX Gold Have a $4.9 Billion Head Start

Tether Gold and PAX Gold together reached a combined market cap of $4.9 billion as of this week, according to CoinGecko data — and they got there without any shared infrastructure. Both tokens launched roughly five years ago and have dominated the tokenized gold space ever since, building their custody arrangements independently and creating the market largely on their own terms.

That's the part the World Gold Council's framework has to reckon with. Incumbents with $4.9 billion in combined market cap aren't going to abandon working custody pipelines because a trade association published a white paper. The Council's angle is less about pulling existing players into a new system and more about lowering the barrier for the next wave of issuers — the companies that haven't launched yet because the build cost was too high.

Oswin put it plainly: physical gold is a fundamentally awkward asset to tokenize. It comes in different sizes, different shapes, different forms, stored across different locations. That's always been the friction point for digital gold products, and it's something software alone can't fully abstract away.

At the end of the day, [gold] is a physical asset that comes in different sizes, shapes, forms, locations. It's always been an inhibitor to these kinds of initiatives.

Why Does the World Gold Council Care About Crypto?

Fair question. The World Gold Council is a trade association funded by the world's largest gold mining companies — its mandate is to promote gold demand globally. Tokenization is just the latest frontier for that mission.

The Council launched SPDR Gold Shares back in 2004 — the first U.S.-listed exchange-traded fund backed by physical gold. That fund now carries a market cap of $126 billion. Establishing an equivalent foothold in tokenized gold, before the space matures and entrenches different players, is clearly the strategic play here. The 'Gold as a Service' brand functions like a certification mark — an 'Intel inside' for gold tokens that the Council hopes will become the default trust signal for the category.

The timing isn't random either. Tokenization platform Theo just raised $100 million to launch thUSD, a self-described 'gold-powered stablecoin' backed by thGOLD rather than cash or U.S. Treasuries. Unlike most stablecoins, it targets dollar parity through gold reserves rather than cash and government debt. Experimentation in this space is clearly accelerating, and the Council wants to be the standards body that sets the terms before the market locks in.

There's also a cost problem baked into gold that doesn't apply to cash-backed stablecoins. Physical gold stored in a vault generates no yield — it just sits there, accumulating storage and insurance costs. That drag on economics has historically made gold-backed token business models harder to justify. A shared Gold as a Service infrastructure, the Council argues, compresses those costs enough to make hundreds of new products economically viable where only a handful exist today.

Instead of a handful of successful products, this will potentially lead to hundreds of products that can now come to market. The business case stands up much better because of the way they can access the physical gold in a simplified, more cost-effective way.