Gold just reclaimed its place at the top of global reserves. Tokenized gold is emerging as the infrastructure layer that follows.

Gold now represents a larger share of global official reserves than U.S. Treasury holdings, according to the ECB’s latest report on the international monetary system. The numbers are not subtle. The ECB’s June 2, 2026 report, “The International Role of the Euro,” shows the share of gold in total official foreign reserves rising to 27% at the end of 2025, up from 20% a year earlier, surpassing both U.S. Treasuries at 22% and the euro at 15%. For anyone paying attention to the future of tokenized gold, this is not a footnote. It is the headline.

What the ECB Data Actually Shows About Gold’s Rise in Global Reserves

The ECB is careful about the mechanics. Much of the shift reflects valuation effects rather than a wholesale restructuring of central bank portfolios. Gold prices rose roughly 30% in 2024 and approximately 60% in 2025, which mechanically lifted gold’s market-value share relative to fixed-income holdings priced in nominal terms. That distinction matters for analytical honesty, but it does not diminish the broader signal.

Central bank buying has been sustained at historically elevated levels. Official-sector purchases reached approximately 850 tonnes in 2025, below the record pace of more than 1,000 tonnes annually from 2022 through 2024, but still high by any recent standard. Since Russia’s full-scale invasion of Ukraine, China has acquired more than 350 tonnes, Poland 320 tonnes, Turkey 220 tonnes, and India 130 tonnes. The ECB links this accumulation directly to geopolitical risk and the desire to hold assets outside the reach of dollar-denominated sanctions. ECB President Christine Lagarde wrote plainly in the report: “Geopolitical tensions continue to drive strong central bank demand for gold.”

One data point worth flagging: stablecoin issuer Tether purchased more than 100 tonnes of gold in 2025, making it one of the largest single buyers globally that year. The ECB flagged this directly, noting that stablecoin growth could carry broader macroeconomic implications. Its inclusion in a central bank reserve report highlights how digital asset infrastructure is becoming increasingly relevant to global precious metals markets.

One important nuance: dollar-denominated assets still represented the largest share of global reserves at 42%. This is a re-ranking of individual asset classes, not a dismantling of the dollar reserve system.

Why Gold Surpassed U.S. Treasuries: Three Forces Driving the Shift

Three converging forces explain how gold moved from 20% to 27% of global reserves in a single year.

Price appreciation compounding over fixed income. Gold’s multi-year rally rewrote the math on reserve portfolios. When an asset appreciates 60% in a year, its share of any diversified portfolio rises sharply even without new purchases. U.S. Treasuries, priced in nominal terms with yields that do not move in the same direction, lost relative ground on a market-value basis.

Sanctions risk reshaping reserve strategy. The freezing of Russian dollar reserves in 2022 sent a clear message to every central bank watching: sovereign debt held in a foreign jurisdiction carries political risk that domestically stored gold does not. The shift reflects a broader effort by many countries to diversify away from the U.S. dollar, and that process has accelerated rather than stabilized.

Private demand reinforcing the move. Beyond central banks, private investment demand for gold nearly doubled from 2024 to almost 2,200 tonnes, while gold-backed ETFs drew a record $89 billion in inflows. Seeing institutional investors, retail investors, and sovereign reserve managers move in the same direction simultaneously is rare. That alignment is worth noting.

Tokenized Gold Is Already Responding

Markets rarely wait for confirmation. By the time the ECB published its data, tokenized gold had already staged one of the more striking growth stories in the real-world asset sector.

Spot trading volume for tokenized gold products reached approximately $90.7 billion in Q1 2026 alone, surpassing the $84.6 billion recorded across the entire year of 2025, according to CoinGecko’s latest RWA report. The market is heavily concentrated in two products: Tether Gold (XAUT) and Paxos Gold (PAXG), which together accounted for roughly 89.1% of the growth in tokenized commodities over the period. XAUT holds a market capitalization of approximately $2.52 billion, with PAXG close behind at $2.32 billion. Combined, the tokenized gold market crossed $6 billion in total value, adding roughly $2 billion in 2026 alone. Gold briefly traded above $5,500 per ounce during that period before pulling back to the $4,400 to $4,600 range through the spring.

These numbers reflect something beyond a price rally. Investors are reaching for tokenized gold as a 24/7, on-chain alternative to allocated bars in a vault, and the volume data suggests institutional participation is growing alongside retail demand.

What Tokenized Gold Offers That Physical Gold Cannot

As gold becomes increasingly important in reserve portfolios, institutions face a practical challenge: physical gold was never designed for an always-on financial system. Around-the-clock trading is not possible with allocated bars. Settlement is not instant. Collateral use in a lending protocol outside of traditional market hours is not an option. For a fund manager hedging a gold position on a weekend, or a treasury officer needing continuous pricing on the asset now sitting above sovereign debt in reserve rankings, these are operational constraints, not theoretical ones.

Tokenized gold addresses them directly. On-chain settlement removes clearing delays. Continuous trading means no gap risk between market sessions. Fractional ownership removes the minimum size constraints that keep smaller institutions out of the allocated gold market. Beyond access, composability opens a second layer of utility. Tokenized gold can be deployed as collateral, wrapped to generate yield, or embedded in programmable custody arrangements that traditional vaults cannot replicate. Several of these use cases are already active across digital asset markets, though adoption remains concentrated among crypto-native participants. The path to broader institutional use runs through regulatory clarity and custody standards.

The Infrastructure Requirements That Will Define the Sector

Credibility in tokenized gold rests on a narrow but non-negotiable foundation. Allocated physical gold in insured, third-party vaults, transparent governance, and regular independent audits are not optional features. They are the threshold requirements for institutional adoption. Both PAXG and XAUT are backed 1:1 by physically allocated gold with regular third-party audits, and that auditability is precisely what has allowed them to capture the dominant share of institutional trading volume. Newer entrants across the tokenized gold sector, including Ubuntu Tribe’s GIFT token, Kinesis Gold (KAU), and other emerging gold-backed digital assets, are increasingly adopting the same custody, audit, and proof-of-reserve standards that helped establish market leaders such as PAXG and XAUT. What were once competitive differentiators are becoming baseline expectations.

Regulatory clarity is the remaining constraint. Tokenized gold sits at the intersection of securities law, commodities regulation, and payments infrastructure. Institutions require clear legal frameworks and defined counterparty protections before vault-to-chain rails can scale beyond the current leaders. That clarity is developing, but uniform application across jurisdictions is not yet there. The sector’s growth will track the pace of regulatory development as much as it tracks the gold price.

The Bigger Picture for Tokenized Gold

Gold’s rise above U.S. Treasuries in reserve portfolios does not guarantee the success of tokenized gold. What it does establish is something more important: the underlying asset has regained strategic relevance at the highest levels of global finance. The forces behind that shift, geopolitical fragmentation, reserve diversification, and sustained central bank demand, show little sign of reversing.

The next question is not whether institutions want gold exposure. The question is how they will access it.

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Benzinga Disclaimer: This article is from an unpaid external contributor. It does not represent Benzinga’s reporting and has not been edited for content or accuracy.