Gold has seen wild swings over the last week, hitting record highs near US$5,600 per ounce before plunging nearly 10 percent to around US$4,700 in the sharpest drop in over a decade. The real story, though, isn’t just the price action, but how tokenized gold is modernizing one of the world’s oldest reserve assets for a new era.
Leading this charge is Gold Token SA (GTSA), the gold tokenization arm of Swiss precious metals giant MKS PAMP.
Under the leadership of CEO Kurt Hemecker, GTSA is transforming how institutions and individual investors interact with the world’s oldest reserve asset by placing it on modern rails.
As digital assets like Bitcoin struggle to maintain their safe-haven narrative amid high-profile fraud cases, institutions are seeking trusted assets on modern rails, where blockchain’s functional advantages — such as 24/7 liquidity and instant settlement — can upgrade low-volatility reserve assets via tokenization.
The infrastructure bridge: Legal title and institutional trust
MKS PAMP is a family-owned global powerhouse that operates one of the world’s most renowned refineries.
By launching the DGLD token on the Base network, Coinbase’s Layer 2 blockchain, in mid-December 2025, GTSA effectively bridged the gap between 60 years of Swiss precious metals heritage and US-centric blockchain technology.
Unlike speculative crypto tokens, “DGLD is designed to represent allocated physical gold rather than a claim on an issuer,” prioritizing the institutionalization of real-world assets through transparent governance, Hemecker said.
”That design approach is important in jurisdictions like the US, where regulators are still clarifying the boundaries between securities and other digital assets,” he added. Physical gold’s familiarity reduces ambiguity, giving institutions clear legal title to specific vaulted bars, not issuer promises or derivatives.
According to Hemecker, this structure earns policymaker support as “controlled tokenization, where digital representations of existing assets are well-governed and clearly backed, rather than creating new, untested monetary substitutes.” Investors gain direct property rights over high-security Swiss vaults, outpacing tech-first rivals.
Transparency serves as a competitive advantage in this new era of digital commodities. Gold investors, who are traditionally obsessed with provenance, can utilize GTSA’s Bar Mapper tool. This technology allows a digital holder to trace their token back to specific gold bars certified by the London Bullion Market Association
Users can view non-sensitive metadata, including the refiner, weight, purity and serial number of the bars, providing a level of auditability that was previously impossible in the gold market. This creates a transparent link between digital ownership and physical existence, ensuring that every token is backed by real, verifiable gold.
Overcoming hurdles
The operational hurdles once plaguing tokenization are rapidly fading. “Several early frictions are already easing,” Hemecker said. “Operational and technical uncertainty is declining as standards around custody, issuance and lifecycle management mature. Institutional access is improving, and credibility gaps are narrowing.
This maturity drives a shift from experimental pilots to institutional balance-sheet allocations.
“What we’re seeing from institutions and central banks is not a move away from traditional safe-haven assets, but a desire to modernize the infrastructure around them,” he explained. Blockchain’s 24/7 availability, near-instant settlement and efficient reporting keep gold exposure while accelerating infrastructure.
“Tokenized gold allows institutions to maintain exposure to a familiar reserve asset, while benefiting from faster settlement … This is about putting trusted assets on modern rails.”
Liquidity follows suit. “Liquidity will increasingly be judged by depth and reliability, not headline volumes,” Hemecker noted. “Custody quality will move to the foreground, with institutions favoring allocated, insured gold held with reputable vaulting partners.” DGLD delivers this via Base and Aerodrome DEX’s nonstop trading.
Finally, redemption seals the trust: “Redemption down to 1 gram expands accessibility and utility for collateral, lending, repos and beyond. Redemption builds trust, but tokenization is where the real utility comes from.”
The regulatory landscape
The regulatory landscape continues to play a pivotal role in the adoption of tokenized gold.
While GTSA is a Swiss-regulated entity supervised by FINMA-level standards, its presence on the Base network demonstrates a strategic navigation of global demand.
“Regulatory trends are likely to support tokenized gold adoption by rewarding transparent, well-governed structures that fit within existing financial and commodity frameworks,” Hemecker said. “Products with clear custody, governance and legal ownership are simply easier for institutions to assess and approve.”
The GENIUS Act, passed in the US in 2025, clarifies stablecoin rules, prioritizing 1:1 reserves and audits, which favor insured custody like MKS PAMP’s. The proposed CLARITY Act would split Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) purview, classifying some assets as “digital commodities.”
This past January, the SEC and CFTC held a joint harmonization event to align on digital asset oversight, while the CLARITY Act awaits Senate action after House passage in 2025.
Looking ahead
Looking ahead, Hemecker believes the trend favors “consolidation rather than proliferation.’
Tokenization can improve traceability and data continuity, aiding secondary markets like recycled gold. It connects the value chain from mine to vault to wallet, but needs “standards, audits, operational integration and regulatory alignment” for real transparency, according to Hemecker.
For mining and finance, DGLD modernizes the Swiss gold standard.
“Our focus … is building the foundations … so (it’s) ready to scale responsibly,’ said Hemecker.
Securities Disclosure: I, Meagen Seatter, hold no direct investment interest in any company mentioned in this article.
