Tokenized gold poised for further growth as World Gold Council pushes market standardization, says Gold Token SA CEO

In an interview with Kitco News, Hemecker explained that the industry does not suffer from a lack of demand for gold, but rather from structural inefficiencies that have limited the growth of tokenized products.

“I don't think gold in general… has a demand problem,” he said. “It's more about market structure.”

According to a recent analysis, blockchain-based gold tokens grew 2.6 times faster than their physical counterparts, with the market cap for tokenized gold surpassing $5 billion in the first quarter of the year.

Despite this growth, Hemecker said that there are still some challenges holding back tokenized gold, including the fact that the market remains highly fragmented, with each product operating under different custody models, legal frameworks, and redemption terms. This lack of standardization has created barriers to trust and liquidity, preventing digital gold from functioning as a unified asset class.

He pointed out that not all digital gold products are created equal.

Since MKS relaunched its Gold Token in November, Hemecker said he has seen significant appetite for digitized real-world assets, and gold continues to lead the way. He added that even the recent market volatility hasn’t diminished interest in digital gold.

“In general, we're still feeling a pretty bullish attitude from institutions, as they're diving into this market,” he said.

However, he added that institutional players still have many questions regarding issues like custody, issuance, redemption, and jurisdiction.

The World Gold Council’s proposed “Gold as a Service” model aims to address these issues by building shared infrastructure that connects the physical and digital gold ecosystems. The framework would standardize key elements such as custody, issuance, reconciliation, and redemption, allowing issuers to plug into a common system rather than building their own from scratch.

“They’re really fixing the plumbing,” Hemecker said. “The idea there is that issuers don’t have to rebuild everything from scratch.”

According to the WGC’s recent white paper, the model proposes a coordinated structure that links physical gold custody with digital issuance and lifecycle management, helping reduce complexity while improving trust and interoperability.

Hemecker said that the most important benefit he sees in this approach is its potential to unlock fungibility across tokenized gold products. He pointed out that currently, investors must evaluate each token individually due to inconsistent standards.

He explained that a shared infrastructure could enable different tokens to become interchangeable, much like physical gold trades based on standardized purity and weight.

“That limits trust and liquidity quite a bit today,” he said. “If we can get some standards in place, you move trust away from a centralized issuer to trusting the system.”

He explained that broader participation and standardized infrastructure could expand the overall market by improving liquidity and usability, adding that a more interoperable system would allow tokenized gold to be more easily transferred, used as collateral, or integrated into financial products—capabilities that remain limited today.

The WGC’s vision explicitly highlights this goal, noting that shared infrastructure could transform digital gold from a collection of isolated products into a “coherent, interoperable asset class” within modern financial systems.

Hemecker said that for established players like MKS PAMP, which already has a long history in the gold market as a major refiner and custodian, the benefits are less about building infrastructure and more about scaling the market.

“It starts to create a more fungible market, and the overall size of that market just grows,” Hemecker said. “Then it leads to innovation.”