Musk's scrutiny of Fort Knox gold reserves spurs tokenisation debate

Amid growing concerns about the transparency of U.S. gold reserves, Elon Musk has voiced scepticism about the unaudited status of Fort Knox, sparking discussions about tokenising commodities like gold.

This comes as the tokenisation of real-world assets (RWAs) is gaining traction, driven by institutional demand for U.S. dollar-denominated yield products.

Musk, through his Department of Government Efficiency (DOGE), has questioned whether the gold at Fort Knox is "still there" and has called for a "live video walkthrough" of the facility.

Sen. Rand Paul has responded positively to the idea of auditing Fort Knox.

The heightened scrutiny follows a reminder that Fort Knox, Kentucky, hasn’t been fully audited in over 50 years.

The last partial audit took place in 1974.

As the leader of DOGE, Musk is spearheading efforts to eliminate what is seen as wasteful government expenditures while also examining various components of the federal budget.

These concerns about federal gold reserves have amplified the discussion around the potential of blockchain technology to enhance the security and transparency of gold reserves.

Michele Crivelli, founder and COO of digital asset issuer NexBridge, suggests that tokenising bullion on the blockchain enables "continual verification of gold's ownership," rendering issues of trust obsolete.

The U.S. Bullion Depository in Fort Knox, Kentucky, holds 147.3 million troy ounces of gold, or about 59% of the Treasury’s total supply, according to the U.S. Mint.

With gold trading at more than $2,930 per troy ounce, the Fort Knox gold has a market value of $435 billion.

However, the government denotes the value of this gold at Fort Knox as just $6 billion based on the government-set book value for gold of $42.22 per troy ounce.

While an inspection could reveal discrepancies in the purity and weight of the gold stored at Fort Knox, a detailed examination of each gold bar, checking its weight and purity against official records would be an enormous undertaking.

The current reviews of Fort Knox's documentation occur fairly regularly.