Mining and technology groups are developing crypto tokens linked to metals including gold, copper and uranium, as executives look to capitalise on ballooning metals prices and fuse investor excitement about the crypto and minerals worlds.
The projects are being billed as an easier way for retail investors to gain exposure to physical metals than traditional commodity trading, as a route into the metals sector for crypto enthusiasts looking to diversify into “real world” assets and as a novel way to fund mining projects.
The flurry of interest in tokenising metals is the latest attempt to bring the fervour of crypto traders into a new asset class. Stocks and bonds are already being tokenised. Under US President Donald Trump, Wall Street is rushing to embrace blockchain technology.
In the UK, regulators are preparing a framework for digital gold amid efforts to encourage tokenisation of financial markets and protect London’s dominance of global bullion trading.
But some experts say the complexities of tokenisation and of the mining industry present risks for non-specialists and note that tokenising metals is in its early stages.
“The trend for tokenised gold is far more about the trend for trying to launch tokenised gold than it is about the demand,” said Adrian Ash, director of research at online trading platform BullionVault. “We’ve seen dozens of gold-backed tokens come and go. There just isn’t the appetite.”
Investors can already bet on gold without the storage costs and other issues of physical ownership by using gold-backed exchange traded funds. Such funds had a combined market value of $530bn last month, according to industry body the World Gold Council, backed by more than 4,000 tonnes of bullion.
But while owning shares in an ETF offers exposure to movements in the price of gold, it does not equate to ownership of the metal itself.
For that, proponents say, investors should turn to tokenised gold. The largest gold-backed crypto tokens are Tether Gold, from the issuer of the world’s largest stablecoin, and Pax Gold, from blockchain payments and blockchain infrastructure company Paxos. With both, each token represents one troy ounce of bullion that holders can redeem for physical gold. Yet they have so far achieved only a fraction of the uptake of gold-backed ETFs, with market values of about $2.7bn and $1.9bn, respectively.
“Anyone investing in gold is probably a traditional investor and will go direct to the means they know,” said Caitlin Barnett, director of regulation and compliance at blockchain analysis group Chainalysis.
Nevertheless, several companies are developing tokens linked to gold and to other metals that have seen strong demand and rising prices, including the battery metals cobalt and nickel, and uranium, used in nuclear fuel.
Trading platform Metals.io has issued uranium, nickel and cobalt tokens that holders can redeem for physical metal if they have the right approvals. No buyers have so far taken delivery of uranium, which is highly regulated.
The tokens gave investors “direct commodity exposure without the cost and complexity of futures”, said Ben Elvidge, head of alternative assets at Trilitech, the software company that built Metals.io.
Much cobalt and uranium trading is traditionally done through bilateral and long-term deals, while nickel trading on the London Metal Exchange is not designed for retail investors.
Elvidge said demand for the tokens had come from “crypto-native capital that wants diversification through real-world assets with growth potential”, as well as from institutional groups.
Yet volumes remain small. Metals.io’s cumulative trading has reached just $24mn since December 2024, with about 9,000 holders of its tokens.
Then there are more esoteric ideas. Nasdaq-listed gold miner Blue Gold promises to deliver the metal “from the mine to your [crypto] wallet”. To help fund its operations it has issued “thousands” of tokens, according to chair and chief executive Andrew Cavaghan. However, it is currently looking for new long-term prospects while locked in a dispute with the Ghanaian government, which revoked the licence for its only mine in 2024.
Nasdaq-listed Datavault AI plans to tokenise metals such as copper and antimony — used in missiles, batteries and flame retardants — while they are still in the ground to fund their extraction.
“Think of it like a future,” said chief executive Nathaniel Bradley. The company — which went public in 2018 as a supplier of audio semiconductor chips and wireless sound technology — will work with existing metals producers who need cash to scale up. Investors will be able to trade the tokens or hold them until redeeming them for physical metal, once it has been mined.
“Traditional instruments come with an enormous amount of paperwork: transfer agents, chain of custody, wire transfers. Tokens collapse that entire stack into software,” said Bradley. The group hopes to launch its inaugural tokens in the coming months.
Some industry figures are sceptical, given the complexity of mining processes that are not easy for non-specialist investors to assess.
“Are retail investors expected to understand the process of funding part of the gold value chain?” asked Mike Oswin, global head of market structure and innovation at the World Gold Council, which is itself developing a digital form of gold for which it plans to run a pilot that has been pushed back from the first to the third quarter of this year.
Others have questioned whether each tonne of an industrial metal is fungible in the same way that gold is, given that end users often have specific requirements for their inputs, such as purity and provenance.
Elvidge said Metals.io expected that “as market demand moves on-chain, you absolutely could end up with different pricing for the different specifications and qualities of metal. Our infrastructure set-up makes this scalable.”
Another issue is accessibility. Major metals such as copper, aluminium and nickel are traded on global exchanges such as the LME and the CME Group’s Comex. But the emerging tokens are not all found and traded in the same place.
Blue Gold said its tokens were currently only available on its app, rather than on third-party exchanges. Datavault said its planned rollout would start with trading on the UpsideOnly platform run by fintech group Perpetuals.com. Metals.io’s uranium token is traded on exchanges including Kraken, Gate and KuCoin.
“The area where we need more development is interoperability,” said Barnett at Chainalysis. “For a while you could only get certain assets on certain exchanges or platforms and that continues to be an issue.”
That said, she added: “I think everything eventually comes on to the blockchain, because of the way you can record things.”
Data visualisation by Ray Douglas
