Gold tokenization means digitizing real physical gold and converting it into tokens. Then these tokens are stored on the blockchain and they become secure, immutable, and easy to trade.
Blockchain technology will radically transform the way we invest in real assets. And gold is definitely one of them.
Tokenizing gold is the process of creating a blockchain token that represents a specific amount of gold, with the token’s value and ownership directly corresponding 1:1 with the value of the physical gold it represents.
Tokenization provides an opportunity to appeal to new investors and attract the next generation of gold investors looking for efficient options to store value in a world of economic uncertainty.
Here are 5 advantages of investing in tokenized gold:
Accessibility
Tokenization improves the accessibility of gold investments. Tokenization makes it easier for investors to buy and store gold, regardless of their location. Investors can buy and sell gold from anywhere in the world, simplifying the process for those who are unable to physically access gold investments. With tokenized gold, users can now easily diversify their investment portfolios. It will enhance market inclusiveness and attract more small and retail investors.
Transparency
All transactions are carried out on a blockchain infrastructure. It is secure by default — therefore, gold tokenization can boast increased transparency regarding both transactional and issuer data. Greater transparency also means improved traceability and allows a user to review the history of all transactions relating to the asset. Proof of origin is also a highly important aspect when investing in gold. When tokenized, all the data about gold is added to the distributed ledger. Thus, all stages of the supply chain can be traced: from the place of origin to transportation and processing details.
Stability
The value of a gold-backed token is pegged to the price of gold, thus it will not fall to zero. The value of gold has generally remained steady over time. Gold-backed tokens are very good solutions to store value on the long term and protect investors’ portfolios against currency devaluation.
Liquidity
Smart contracts are extensively used in the gold tokenization process. Tokenized gold is easy to convert and trade on a P2P basis. The tokenization of gold exempts you from storage fees and issues about quality and origin of the metal thanks to the blockchain application.
Simplicity
Tokenized gold allows the transfer of value without encumbrance or possible complication. The physical storage of the digitized gold in custody allows an exchange of property rights on the asset. With tokenized gold, no worries of transport, custody or securing a heavy asset and arousing curiosity. It is a more serene and reasonable way to own gold in a connected world.
Gold tokenization is still at an early stage of adoption but it will spread throughout the world as the blockchain application reaches mass adoption level.
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