Could encrypted gold become the next standard for stablecoins?

In the context of increasing geopolitical instability and gold prices continuously reaching new highs, confidence in fiat-backed assets is gradually declining. This is driving the strong development of vàng mã hóa (tokenized gold), as major financial institutions and sovereign nations are successively launching or expanding gold token products.

This trend shows that gold encryption is gradually stepping out of its niche role to become a new generation digital value: stable, reliable, and capable of global application.

Five years searching for a safe haven

The recent violent fluctuations have strengthened gold's position as a safe-haven asset. Just two months ago, the price of gold reached a record high, surpassing the 4,000 USD per ounce mark.

This is not a temporary phenomenon. From 2020 to 2025, gold prices have more than doubled, reflecting the trend of investors seeking safety as the world faces the pandemic, inflation, war, sanctions, and prolonged geopolitical tensions.

Gold prices over the past five years | Source: Gold PriceAt the same time, the development of blockchain technology has completely changed the approach to gold. The encryption of assets, instant payments, and global liquidity 24/7 have made gold, which was once a static traditional asset, much more flexible in its digital form.

Recent developments indicate that this trend is spreading rapidly, not only in the field of cryptocurrencies but also in traditional finance.

The explosion of organizational gold tokens

Last month, Swiss precious metals group MKS PAMP – one of the largest gold refiners in the world – relaunched DGLD, a gold token dedicated to institutional investors.

In the field of cryptocurrency, Tether Gold (XAUt) continues to maintain a steady growth rate, while Pax Gold (PAXG) issued by the New York blockchain company Paxos is also continuously expanding its scale. The total market capitalization of these two tokens has now exceeded 3 billion USD, making them the most popular gold-backed digital assets in the market.

Traditional banks are also not left out. HSBC – one of the largest multinational banks and a major physical gold custodian in London – is testing a gold token product for its customers.

Although the scale of these digital gold products is still small compared to the total market value of gold ETFs, their rapid development shows an increasing trust in blockchain gold as a modern financial tool.

Even this trend has spread to the public sector.

In November, Kyrgyzstan issued USDKG – the first stablecoin backed by gold and pegged to the US dollar exchange rate. USDKG, based on the national gold reserves, provides a payment and cross-border trade solution against sanctions. This approach by Kyrgyzstan could pave the way for other major countries to participate.

Challenges from management

However, encryption gold still faces many challenges. Currently, there is no common standard for the industry, making it difficult for users to assess and compare the reliability of different products.

Transparency is also not uniform. Some issuers regularly publish independent audits, but many organizations only provide limited information about their reserves or redemption processes. Legal regulations also differ between countries, creating additional barriers for consumers and businesses.

These gaps are the reason many governments remain cautious. Regulators are concerned that the free circulation of gold-backed assets could undermine trust in national currencies, complicate the management of monetary policy, and facilitate the movement of money beyond the control of traditional banking systems.

The Future of Encryption Gold

Despite many challenges, the growth potential of encryption gold is undeniable. If legal regulations are improved and geopolitical pressures continue to rise, encryption gold could completely transform from a marginal position to become an important pillar of a stable, secure, and globally applicable digital currency ecosystem.

Mr. Teacher