Digital Gold Transformation: Tokenized Bullion Reaches $2.1 Billion as Inflation Rises and DeFi Booms

In the third quarter of 2025, Tether’s tokenized gold holdings climbed above 11.6 tons, mirroring a broader upswing in gold prices and heightened interest from both institutions and individual investors in digital forms of physical gold. The company’s

Gold (XAUT) token, which is backed one-to-one by a fine troy ounce of gold, now boasts a market cap of over $2.1 billion, rising from $1.44 billion at the close of Q3, as reported by . This expansion is supported by more than 375,000 ounces of actual gold stored in Swiss vaults that comply with London Good Delivery standards, and token holders have the option to redeem their tokens for physical gold, according to .

XAUT’s rise in value aligns with gold reaching unprecedented levels above $4,500 per ounce, fueled by ongoing global inflation, geopolitical instability, and central banks increasing their gold reserves. Tether CEO Paolo Ardoino described this achievement as proof that tokenized assets can “flourish on-chain without compromise,” and pointed out that institutional demand for digital gold is gaining momentum, as noted by Crypto.news. The tokenized gold sector, now worth $3.72 billion, is led by Tether Gold’s $2.1 billion share, surpassing rivals such as

($1.31 billion), according to .

Investors from both retail and institutional backgrounds in developing regions have played a significant role in XAUT’s expansion. Ardoino credited the token’s strong performance to “soaring demand from retail investors in Central and South America and Asia,” who are increasingly turning to tokenized gold as a hedge and a tradable asset, according to

. This momentum has been further boosted by XAUT’s integration into decentralized finance (DeFi) platforms. , a universal collateralization service, recently began accepting Tether Gold as collateral for issuing its stablecoin USDf, allowing users to earn returns while benefiting from gold’s value retention, as detailed in . This development highlights the merging of traditional assets with DeFi, with Falcon’s founder Andrei Grachev describing it as an “important milestone” in connecting blockchain liquidity with tangible assets, according to .

Tether’s audit for the third quarter, published in October, verified that XAUT is fully backed, with 375,572 ounces of gold valued at $1.44 billion as of September 30, according to the audit. The company has also increased its gold reserves, anticipating a $15 billion profit for 2025, driven by high-yield conditions and a stablecoin sector now worth $316 billion, as reported by

. Investor Empires also highlighted Tether’s leading position, with its USDT stablecoin reaching a $182.96 billion market cap and 500 million verified users.

With gold’s total global market value nearing $27 trillion, tokenization is bringing new possibilities to the precious metal. The integration of XAUT with platforms like Falcon Finance enables round-the-clock trading, fractional ownership, and yield opportunities, helping to overcome traditional barriers to gold investment, as mentioned by ZyCrypto. As uncertainty and inflationary pressures continue worldwide, Tether Gold’s unique blend of physical security and digital convenience places it at the forefront of a fast-changing market, according to Crypto.news.