By Henry Zhang, Founder & Group CEO, DigiFT

At the recent Hubbis Gold 360 webinar, participants raised practical questions about tokenised gold: how it fits into existing portfolios, whether lenders will accept it as collateral, and what investors gain from holding gold exposure on-chain.

These are useful questions for those of us building the infrastructure. Investors already have several established ways to access gold. A new format has to earn its place through the experience and capabilities it provides.

At DigiFT, we work with financial institutions and asset managers to bring investment products onto blockchain infrastructure. Earlier this year, we worked with OCBC and Lion Global Investors on the launch of a tokenised physical gold fund.

That work reflects our view that investment products should be accessible within the environments where investors increasingly hold and manage their capital.

Start With Where the Capital Sits

An investor with cash in a brokerage account may already find it convenient to buy a gold ETF. Their funding, custody and trading arrangements are in place.

An investor holding stablecoins starts elsewhere. To use a fiat-funded investment account, they may first need to convert those stablecoins into cash and transfer the proceeds. Bringing gold exposure into their digital environment can shorten that journey, where direct stablecoin payment is supported.

For this investor, the benefit is tangible: fewer funding movements and less coordination between separate accounts and providers.

This helps explain the relevance of tokenised gold to digitally active investors. Two people can seek the same gold allocation while needing different ways to acquire and manage it.

For fiat-funded investors, adoption will depend on other useful capabilities, such as trading access or a supported financing arrangement. Where their existing route meets their needs, there may be little reason to change.

Understand the Investment Behind the Token

Tokenised gold can take different forms. A token may represent rights relating to gold held in a vault, fund units, or a separate instrument providing exposure to a gold fund. The fund may itself hold physical gold.

Those arrangements determine the investor’s ownership rights, custody relationships and redemption options. They also determine whether physical delivery is available.

I see this as the foundation for a useful conversation with an allocator. Once the investment structure is understood, we can explain how the digital format changes the way that exposure can be accessed and used.

Consider a Saturday Allocation Decision

Imagine deciding on Saturday to increase your gold allocation while your chosen conventional market is closed.

If your brokerage account is funded, you can buy when that market next opens. Now suppose you also have access to a tokenised secondary market operating that weekend. With eligible access, a supported payment asset and sufficient liquidity, you may be able to buy an existing token from another holder before the conventional market reopens.

That gives you more flexibility over when to implement the decision.

The transaction takes place at the available secondary-market price. When the underlying market is closed, its last reference price may be stale, while the token market continues to respond to news, supply and demand.

The distinction between trading and redemption matters here. A secondary market can operate outside an issuer’s dealing windows. Creating new tokens, redeeming with the issuer and moving cash through banks can each retain their own schedules.

The example shows how digital infrastructure can extend access, with the actual experience depending on the market and services supporting it.

Connect the Holding to Other Financial Services

Gold exposure can also support financing and other portfolio activities. Tokenisation creates opportunities to connect these activities more closely.

Payment and token delivery can be linked within a coordinated exchange, reducing exposure to paying without receiving the asset. A lender that accepts a gold token could provide financing against it. Connected systems could then release the collateral after repayment and the required checks, reducing manual instructions.

The BIS has described these mechanisms in its work on tokenised financial infrastructure. Their usefulness depends on compatible payment, custody and lending arrangements.

Early lending applications already use tokenised gold as collateral for stablecoin borrowing, giving investors a way to access liquidity while retaining their gold exposure. Available liquidity remains modest compared with conventional markets.

The experience we gain from these applications helps us refine the borrowing process and identify where further capacity and integration would benefit investors.

Financing Utility Has to Work for the Client

One attendee asked how tokenised gold could receive borrowing value comparable to conventional gold exposure within a private-bank relationship.

For investors who regularly borrow against their portfolios, this deserves serious attention. They will assess borrowing capacity, interest costs, currency, collateral requirements and liquidation terms alongside the investment itself.

An on-chain facility may serve one need, while a private-bank lending relationship serves another. Broader collateral acceptance requires work with lenders, custodians and risk teams so they can evaluate the asset, its legal structure and the process for managing it.

I regard that work as an important part of making tokenised assets more useful. The same applies to liquidity: investors need executable prices at a size and cost that suit their intended transaction.

Build Around a Useful Investor Experience

My view is that tokenised gold will develop through specific, practical improvements: a simpler funding journey, more flexibility over when to transact, and connections to services investors can actually use.

Gold-price risk remains, and the token structure brings its own operational and legal considerations. Clear rights, reliable custody and suitable liquidity belong alongside the technology from the outset.

For wealth managers and allocators, I would start with the client’s existing arrangements and identify what they would like to do more easily. That gives providers a concrete requirement to build towards and investors a clear basis for comparing alternatives.

If you have questions about tokenised gold, are assessing it for your clients, or would like to explore a potential partnership, my team and I would welcome a conversation.

Reach us at [email protected] or through our contact form.

You can also watch the Gold 360 discussion and view our presentation.

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