Managing financial assets, embracing innovation amid a chaotic world
Finance directors (FDs), wealth managers and private investors are seeking reliable ways to protect and grow the value of their financial assets, as global markets face heightened volatility, geopolitical tensions and persistent inflation. Gold—alongside its digital counterparts, gold-backed blockchain tokens and select cryptocurrencies (stablecoins) —has reemerged as a cornerstone of financial resilience.
Gold: a timeless hedge against uncertainty
Gold’s appeal as a safe-haven asset is stronger than ever. In 2025, gold prices have surged, with recent forecasts from J.P. Morgan, Bank of America and Goldman Sachs projecting new record highs. J.P. Morgan expects gold to average $3,675 per ounce by the end of 2025, potentially rising toward $4,000 per ounce by mid-2026. These bullish outlooks are driven by robust central bank demand, economic uncertainty and a weakening faith in fiat currencies.
Central banks worldwide—including China—are accelerating gold purchases, with China’s central bank adding gold to its reserves for five consecutive months in early 2025. This trend underscores a broader shift toward gold as a strategic reserve asset in a multipolar world, where traditional reserve currencies face mounting scepticism.
Gold-backed tokens: digital stability and accessibility
Gold-backed blockchain tokens offer the best of both worlds: the stability of gold and the efficiency of digital assets. Each token is backed by physical gold held in secure vaults, providing transparency, security and liquidity. Investors can trade these tokens 24/7 on digital exchanges, bypassing the logistical challenges of physical gold ownership.
Key benefits include:
- Stability: tokens are less volatile than most cryptocurrencies, as their value is anchored to gold
- Transparency: blockchain technology ensures auditable reserves and immutable transaction records
- Accessibility: fractional ownership opens gold investment to a wider audience
- Inflation hedge: gold’s intrinsic value protects against the erosion of fiat currencies
Stablecoins: fiat currencies’ digital stability
Stablecoins are cryptocurrencies pegged primarily to stable fiat currencies. Some are pegged to commodities (such as gold and silver). They are all designed to minimise price volatility and offer fast, low-cost and accessible digital payments, making them popular for everyday transactions and cross-border transfers. However, they face increasing regulatory scrutiny and competition from emerging central bank digital currencies (CBDCs).
While gold-backed tokens and gold stablecoins share the goal of linking digital assets to gold’s value, their legal treatment can differ markedly. Gold-backed tokens often carry clearer ownership rights and may be regulated as securities or commodities, requiring compliance with investment laws. Gold stablecoins, depending on their design, may be treated more like payment tokens, with a focus on transactional use.
FDs, wealth managers and private investors should carefully review the legal framework, rights and regulatory status of any gold-linked digital asset before investing, using it in financial operations or recommending it.
The rise of CBDCs: who’s leading the charge?
The advent of CBDCs is reshaping the digital payments landscape. China’s central bank is currently the most advanced in the CBDC space, leading with its digital yuan (e-CNY). The e-CNY is already in real-world use across transport, retail and government payments in dozens of cities, and China is actively expanding its international reach with operational hubs and cross-border partnerships.
The European Central Bank (ECB) is also progressing rapidly, with the digital euro in an advanced development phase. The ECB aims to finalise its scheme rulebook and technical features by October 2025, potentially moving to rollout soon after. European commercial banks are already testing digital euro integrations. The Bank of England is in the design phase for a potential digital pound, but has not yet committed to a launch date.
Other notable central banks making significant strides include the central banks of Brazil, India and Nigeria have launched CBDC initiatives focused on financial inclusion and reducing the shadow economy.
CBDCs and stablecoins: competition or coexistence?
While CBDCs may compete with stablecoins—especially in retail payments and cross-border transactions—stablecoins are unlikely to become irrelevant. They remain essential for global accessibility, integration with decentralised finance (DeFi), and offering privacy features that CBDCs may not provide. However, increased regulatory scrutiny and the rise of CBDCs could reshape the stablecoin market, particularly in jurisdictions with advanced digital currency infrastructure.
Ethical gold and responsible investment
As gold demand rises, so does the importance of ethical sourcing. Ethical gold ensures that mining practices minimise environmental harm, support local communities, and uphold labour rights. Certifications from organisations like the London Bullion Market Association (LBMA) and the World Gold Council help investors identify responsibly sourced gold.
Blockchain energy consumption: balancing innovation and sustainability
Blockchain technology, while transformative, can be energy-intensive, especially networks using proof-of-work consensus. Investors and businesses should consider the environmental impact of the underlying blockchain when choosing gold-backed tokens or other digital assets. Many new projects are adopting energy-efficient consensus mechanisms, such as proof-of-stake, to address these concerns.
Comparing Gold, Tokens, Stablecoins and CBDCs
Here’s a comparison of select options available for protecting and growing wealth, highlighting their key features and differences.
| Feature / Aspect | Physical Gold | Gold-Backed Blockchain Tokens | Stablecoins | Central Bank Digital Currencies (CBDCs) |
|---|---|---|---|---|
| Underlying Asset | Physical gold bars or coins | Physical gold held in vaults | Fiat currencies or assets (sometimes gold-backed) | Fiat currency issued by central banks |
| Ownership | Direct ownership of a physical asset | Digital ownership via blockchain token | Digital ownership of pegged stablecoin | Digital fiat currency, government-backed |
| Liquidity | Lower liquidity requires physical transfer and storage | High liquidity, tradable 24/7 on exchanges | High liquidity, widely accepted in crypto markets | High liquidity, accepted within the domestic economy |
| Volatility | Low volatility | Low volatility (pegged to the gold price) | Generally low volatility (pegged to fiat) | Very low volatility, stable by design |
| Accessibility | Requires physical purchase, storage, and security | Accessible globally via the internet, fractional ownership | Accessible globally, easy to transfer digitally | Access may be limited by jurisdiction and regulations |
| Transparency | Limited, depending on the seller and custodian | High transparency via blockchain ledger | Varies, depending on the issuer and audits | High transparency, regulated by the central bank |
| Inflation Hedge | Strong inflation hedge | Strong inflation hedge | Limited, depends on peg stability | Limited, tied to fiat currency inflation |
| Regulatory Environment | Well-established, regulated market | Emerging regulation varies by jurisdiction | Increasing regulatory scrutiny | Fully regulated and government-backed |
| Environmental Impact | Mining has an environmental footprint | Depends on the blockchain protocol (PoS preferred) | Depends on the blockchain protocol | Minimal, operated by central banks |
| Use Cases | Wealth preservation, portfolio diversification | Investment, trading, inflation hedge, digital gold exposure | Digital payments, DeFi, remittances | Retail & wholesale payments, monetary policy tools |
| Privacy | High privacy | Moderate, transactions recorded on blockchain | Varies, often less private than cash | Low privacy, subject to government oversight |
| Cross-Border Payments | Difficult, costly | Efficient, low-cost | Efficient, low-cost | Improving, but still developing |
| Ethical Considerations | Depends on sourcing and certification | Can be certified as ethically sourced | Depends on issuer | Governed by national policies |
| Examples | Gold bars, coins | Pax Gold (PAXG), Tether Gold (XAUT) | USDT, USDC, DAI | China’s e-CNY, ECB’s Digital Euro |
Final thoughts
Gold and gold-backed blockchain tokens provide businesses and investors with a robust hedge against market volatility and fiat currency devaluation. With central banks, including China’s, ramping up gold reserves and CBDCs gaining traction, the financial landscape is evolving rapidly. Stablecoins remain relevant, but their role may shift as CBDCs expand. By prioritising ethical sourcing and sustainable blockchain solutions, you can protect your assets while supporting responsible and innovative financial practices in an increasingly uncertain world.
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