We audit popular gold tokens against five trust tests, then compare them with BTC ETFs and native BTC settlement.
Saying the obvious. Most people “in crypto” know this, most people “not in crypto” may not understand yet.
Tokenizing gold is NOT “on chain” gold.
It’s tokenizing that you trust some third party will give you gold at some later date, even after their management changes, maybe decades later, during a war, etc.
It’s a “trust me bro” token.
This is the reason no “gold coins” have really took off.
When a user self-custodies BTC, the Bitcoin base layer confers final settlement for the thing the user actually owns, spendable BTC.
For a U.S. spot BTC ETF, the share settles at the securities depository on T+1, while the fund’s underlying BTC settles on the Bitcoin network inside the custodian’s wallets.
For tokenized gold, the public chain settles the token, but legal title to metal sits in an issuer’s vault and documentation stack, and redemption requires the issuer, the custodian and physical logistics.
Redemption paths make the distinction concrete. BTC can be withdrawn permissionlessly by paying a fee and waiting for confirmations.
Admin-key exposure adds another layer. Paxos retains freeze and upgrade controls for PAXG and has frozen addresses when directed by U.S. law enforcement, including about 11,184 PAXG linked to FTX in 2022.
Tether Gold and Comtech Gold also operate token contracts and redemption desks under issuer terms, which means balances can be immobilized at the contract or at the redemption step.
Bitcoin has no issuer key for user UTXOs. ETF shares can be halted within securities rules, and the underlying BTC remains on-chain at a qualified custodian.
Several BTC ETF issuers have moved to more frequent reserve transparency.
Bitwise uses daily third-party proof of reserves for its spot BTC ETF holdings, and ARK 21Shares pushes reserve data on-chain through Chainlink Proof of Reserves fed by Coinbase.
A simple trust-stack scorecard helps compare where settlement happens, how redemption works, and who can intervene.
The ETF side has tightened the link between shares and on-chain BTC. The SEC signed off on in-kind creations and redemptions for spot BTC ETFs on July 29, 2025, allowing authorized participants to deliver or receive BTC rather than cash only, which reduces frictions between the ETF’s share register and the underlying coin balances.
If prices stretch and token holders try to redeem in size, the first bottleneck is not the chain, it is the redemption desk and vault logistics. Bar-size minimums, KYC throughput and bar availability can create queues and slippage, which can show up as token premiums or discounts to spot during stress.
By comparison, in-kind ETF windows give APs a direct lane to move BTC for shares, which can help the fund track net asset value more tightly than a cash-only model when the market is gapping.
The core finding across these cases is consistent.
Tokenized gold settles tokens on public chains, while final ownership of metal rests in off-chain vault and custody systems controlled by issuers and their partners.
BTC in self-custody settles natively on-chain. BTC spot ETFs settle shares at DTCC while the fund’s coin balances settle on L1 within custodians, and several issuers now expose reserve data through daily attestations or on-chain oracles.
If tokenized gold is a ticket, the chain records who holds the ticket, not who holds the bar.
