Why 98% of Gold Holdings Are ’Paper’ — Aurelion Moves Treasury to Tether Gold (XAUT)
Aurelion CEO Björn Schmidtke warns that roughly 98% of global gold exposure is held as ’paper gold’—IOUs such as ETF shares or unallocated claims—rather than allocated, physical bars with provable title. He said this creates systemic delivery and ownership risks if a large-scale rush for physical metal occurs, potentially driving physical premiums sharply above paper prices as seen historically in silver. To address the vulnerability, Aurelion has restructured its treasury to hold Tether Gold (XAUT), a tokenized, allocated-gold token with each XAUT linked to a specific bar in Swiss vaults and fully redeemable for physical metal. The firm holds 33,318 XAUT (about $153M) and plans further capital raises to expand its allocated-gold holdings. Schmidtke framed gold and bitcoin as complementary long-term stores of value and said the move is intended to build a durable, transparent gold exposure rather than pursue short-term arbitrage. Key points: 98% estimate for unallocated ’paper gold’; systemic redemption/delivery risk; XAUT offers on-chain proof of allocated ownership and faster global transfer; Aurelion holds ~33,318 XAUT (~$153M) and seeks to scale its gold treasury.
Neutral
This development is neutral for crypto markets overall but relevant for traders in tokenized-asset and safe-haven sectors. Moving a corporate treasury from traditional exposures into XAUT highlights demand for tokenized, allocated gold as a transparency and settlement-risk hedge. Short-term market impact: limited on broad crypto prices (BTC/ETH) because the story concerns gold custody mechanics and a corporate treasury decision, not liquidity or token issuance that would materially change crypto market flows. It could spur modest inflows into XAUT and other tokenized precious-metal products, raising trading volumes for those tokens. Long-term impact: positive for tokenized-asset ecosystems — demonstrating real-world treasury adoption may increase institutional confidence in on-chain tokenized commodities, potentially increasing demand for regulated tokenized assets and improving liquidity and market infrastructure. Comparable events: physical-precious-metal premiums and delivery squeezes in silver (e.g., 2011 episodes) raised attention to allocation; more recently, institutional treasuries adding bitcoin/gold influenced demand but had mixed effects on prices. Traders should monitor XAUT supply, redemption activity, and flows into tokenized-gold products; sudden large-scale redemptions or regulatory shifts could affect token pricing and premiums relative to spot gold.