Commodity-backed stablecoins are digital tokens pegged to tangible assets like gold and silver. In 2025, their market cap reached $1.9 billion, a 67.8% increase from 2024. Yet, they still make up just 0.8% of the fiat-backed stablecoin market. These tokens provide a stable, blockchain-based hedge during periods of economic uncertainty.
Tokenized commodities TVL | Source: RWA.xyz
Discover the top 5 commodity-backed stablecoins of 2025, including PAXG and XAUT, and learn how these gold and silver tokens bring real-world assets to the blockchain for secure, cost-effective investing.
What Are Commodity‑Backed Stablecoins?
Commodity-backed stablecoins are digital tokens pegged to the value of physical assets like gold, silver, or other raw materials. Each token represents a 1:1 claim on a tangible commodity stored securely in insured vaults. You can trade these tokens on blockchain platforms or, in many cases, redeem them for the underlying asset. This setup allows you to access real-world commodities without handling bars of gold or silver directly.
As of July 2025, CoinMarketCap lists nearly 40 commodity-backed stablecoins with a combined market cap of over $1.8 billion and a daily trading volume exceeding $102 million. According to CoinGecko’s 2025 RWA report, the market cap of commodity-backed tokens grew by 67.8% year-over-year, adding $773.9 million and reaching an all-time high of $1.9 billion. This growth was fueled largely by rising gold prices, as investors sought safe-haven assets during geopolitical tensions and economic uncertainty.
Commodity-backed tokens' market cap growth | Source: CoinGecko
However, these tokens remain a small segment of the stablecoin market, making up just 0.8% of the total market cap of fiat-backed stablecoins. Even with significant growth, commodity-backed tokens still lag behind fiat-backed ones (67.8% vs. 76.4% growth), reflecting their niche appeal. Tether Gold (XAUT) and Paxos Gold (PAXG) dominate this space, accounting for 84% of the market cap of tokenized precious metals.
While these stablecoins provide transparency through regular audits and digital access via DeFi platforms, there are also limitations. Storage fees, custodial risks, and lower liquidity compared to fiat-backed stablecoins can affect your ability to trade or redeem them efficiently. For beginners, it’s essential to understand these factors before adding commodity-backed tokens to your crypto portfolio.
Top 5 Commodity-Pegged Stablecoins in 2025
Here are the top five commodity-pegged stablecoins in 2025 that offer a secure way to gain exposure to precious metals without holding them physically.
1. PAX Gold (PAXG)
PAXG/gold-backed financial contracts | Source: RWA.xyz
PAX Gold (PAXG) is a regulated, investment-grade digital asset that gives you ownership of physical gold with all the speed and flexibility of blockchain technology. Each PAXG token represents one fine troy ounce of gold securely stored in LBMA-accredited vaults in London. Issued by Paxos Trust Company, regulated by the NYDFS, PAXG is fully backed, audited monthly by KPMG, and offers a cost-effective way to access gold with zero storage fees and no settlement risk.
Unlike traditional gold ETFs or futures, PAXG allows fractional ownership starting from as little as 0.01 troy oz (~$20) and near-instant settlement on Ethereum. Investors can redeem tokens for LBMA Good Delivery gold bars, unallocated Loco London Gold, or USD at market rates, making it one of the few gold tokens with physical redemption options. With a market cap of around $933 million and daily trading volumes of $45 million, PAXG is highly liquid and supported across multiple chains (Ethereum, BSC, Solana, and Arbitrum). However, keep in mind that redemption for physical gold incurs processing fees, and custody is centralized under Paxos.
2. Tether Gold (XAUT)
XAUT/gold-backed financial contracts | Source: RWA.xyz
Tether Gold (XAUt) is a digital token that gives you direct ownership of physical gold stored securely in Swiss vaults. Each XAUt token represents one fine troy ounce of LBMA-accredited gold, with a total backing of around 644 gold bars (7,667 kg) as of July 2025. Issued by Tether Ltd., XAUt combines the stability of gold with the flexibility of blockchain, allowing you to trade, transfer, and store gold effortlessly like any other crypto asset. It supports multiple chains, including Ethereum, TRON, and TON, and is highly accessible for both retail and institutional investors.
With a market cap of approximately $821 million and over 246,000 tokens in circulation, XAUt provides strong liquidity and is integrated into various DeFi platforms. Investors benefit from no custody fees, easy divisibility (down to 0.000001 oz), and 24/7 trading worldwide. You can even redeem your tokens for physical gold bars, though this is limited to deliveries within Switzerland and subject to additional fees and minimum redemption amounts. Unlike Paxos Gold (PAXG), Tether’s audits are less frequent, and its centralized custody model means users must rely on Tether’s operational integrity.
3. Kinesis Gold (KAU)
Kinesis Gold (KAU) is a gold-backed digital currency that gives you full legal ownership of physical gold stored in insured, independently audited vaults worldwide. Each KAU token represents one gram of fine gold (999.9 purity), fully allocated in your name and redeemable for LBMA-approved gold bars starting from 100 grams. With a market cap of around $156 million, KAU offers a unique blend of stability and utility, allowing you to spend, trade, and send gold globally through the Kinesis Virtual Card, usable anywhere MasterCard is accepted.
Users earn monthly yields in physical gold for holding, transacting, or minting KAU, with over $20 million already distributed to the community. The platform charges zero storage fees thanks to its partnership with Allocated Bullion Exchange (ABX), and conducts biannual independent audits to verify gold reserves. While KAU provides a cost-efficient way to use gold as money, it remains centralized under Kinesis and has limited redemption hubs, requiring minimum quantities for delivery.
4. Kinesis Silver (KAG)
Kinesis Silver (KAG) is a digital currency fully backed by one troy ounce of fine silver (999 fineness) stored in insured, independently audited vaults around the world. Issued by Kinesis Money and managed through its strategic partner, Allocated Bullion Exchange (ABX), KAG offers holders full legal ownership of physical silver that can be redeemed from as little as 200 ounces at localized hubs across six continents. Designed to make silver a usable form of money again, KAG allows you to spend, trade, send, and earn silver globally using the Kinesis Virtual Card, which converts your assets in real time at the point of purchase.
Investors also benefit from a fee-sharing model that pays monthly yields in physical silver for holding, spending, or minting KAG. While it provides a cost-efficient and accessible way to integrate silver into a portfolio, especially for those seeking diversification beyond gold, KAG’s lower liquidity and silver’s historically higher price volatility make it a slightly riskier option for beginners.
5. Matrixdock Gold (XAUM)
Matrixdock Gold (XAUm) is a tokenized gold asset that brings 99.99% pure LBMA-accredited gold onto the blockchain, offering fractionalized ownership and easy on-chain access to physical gold stored in trusted vaults across Asia, including Singapore and Hong Kong. Each XAUm token represents one troy ounce of gold, with a total supply of 13,534 tokens backed by 421 gold bars held in secure, LBMA-approved custodial facilities.
With a market cap of approximately $45.3 million and a 24-hour trading volume of $181,900, XAUm appeals to investors seeking a flexible, Asia-centric alternative for gold exposure. It supports ERC-20 and BEP-20 standards, allowing for high accessibility and seamless integration with DeFi platforms, while also offering a unique feature: the ability to "pack" XAUm tokens into NFTs that represent specific gold bars for fixed allocations. Redemption options include physical delivery for qualifying amounts and dynamic allocation audits for transparency. However, as a newer platform, XAUm faces challenges with smaller liquidity and limited global awareness compared to larger gold tokens like PAXG and XAUT.
How to Trade Commodity Tokens on BingX: A Step-by-Step Guide
Getting started with commodity-backed stablecoins on BingX is simple. Whether you’re looking to buy PAX Gold (PAXG), Tether Gold (XAUT), or other tokens, follow these steps:
1. Search for Your Commodity Token: Once you register and complete your KYC, log in to your BingX account and go to the Spot Market. Use the search bar to find your desired token, such as PAXG/USDT or XAUT/USDT. Click on the trading pair to open the token’s trading page.
2. Deposit Funds: Add funds to your account by depositing fiat currencies like USD or EUR using supported payment methods (e.g., bank transfer, Visa/Mastercard). You can also deposit cryptocurrencies like USDT or BTC if you already hold them.
3. Buy Your Commodity-Backed Token: Once your account is funded, place a buy order for the token. You can choose a market order for instant purchase at the current price or a limit order to set your preferred price. After the trade is complete, your tokens will appear in your BingX spot wallet.
4. Redeem or Convert Back: When you’re ready, you can sell your tokens back into fiat or crypto on the Spot Market. For some tokens, you may also have the option to request physical redemption of the underlying gold or silver. Keep in mind that redemption is subject to minimum amounts, processing times, and applicable fees.
🛡️ Tip: Before trading, review the token’s redemption terms, storage and custody fees, and supported blockchain networks. This ensures you can move or redeem your tokens securely when needed.
Benefits of Commodity‑Backed Stablecoins
Commodity‑backed stablecoins offer unique advantages for crypto users who want exposure to precious metals without the hassle of physical ownership. Here are some of the key benefits of commodity-backed tokens you need to know:
• Stable Value Linked to Gold and Silver: These tokens mirror the price of gold or silver, providing a hedge against inflation and currency volatility.
• Digital Access to Real-World Assets: You can trade or hold gold-backed assets on-chain without needing vault storage or delivery logistics.
• DeFi Compatibility: Many tokens like PAXG and XAUT can be used as collateral, added to liquidity pools, or staked for rewards in DeFi ecosystems.
• Global Accessibility: Buy, sell, and transfer these assets 24/7 across borders without relying on traditional banks or brokers.
• Fractional Ownership: Start small - own a fraction of a gold bar or silver ounce, making it more accessible to beginner investors.
Key Considerations Before Investing
While commodity-backed stablecoins provide an easy gateway to precious metals, they also come with risks. Centralized custody means you’re trusting issuers and vault operators to safeguard reserves. Smart contract vulnerabilities could expose your holdings to technical exploits. Liquidity varies widely; while PAXG and XAUT are highly liquid, smaller tokens like XAUM or KAG may have lower trading volumes. Lastly, physical redemption can involve high minimum amounts, processing delays, and extra fees, which may limit flexibility for small investors.
Should You Add Commodity Stablecoins to Your Portfolio?
Commodity-backed stablecoins bring together the value of physical assets like gold and silver with the flexibility of blockchain technology. They offer a way to hedge against inflation and market volatility while staying within the crypto ecosystem. Leading options like PAXG and XAUT dominate trading volumes and provide strong liquidity, making them ideal for beginners. Meanwhile, XAUM, KAU, and KAG appeal to investors seeking niche exposure or diversification into regional and alternative assets.
However, these tokens are not without risks. Custodial centralization, smart contract vulnerabilities, and varying levels of liquidity can affect your ability to trade or redeem. As institutional interest grows and more commodities like platinum or oil get tokenized, transparency and regulatory oversight are also likely to increase. Before adding them to your portfolio, always check custody terms, redemption conditions, and platform support. Stay informed and balance your exposure carefully to avoid unexpected surprises.