Gold-backed stablecoins have surged past $4 billion in total market capitalization, nearly tripling from about $1.3 billion at the beginning of 2025. The rapid expansion reflects both gold’s strong price performance and growing interest among crypto investors in tokenized exposure to precious metals, particularly through the use of a gold backed crypto stablecoin.

Gold prices are up roughly 66% year-to-date in 2025, driving increased inflows into blockchain-based gold assets. The rally has been supported by macroeconomic uncertainty, geopolitical risks, and sustained global demand, creating a favorable environment for both physical gold and its tokenized counterparts.

Tether Gold (XAUt) currently dominates the sector with an estimated market capitalization of $2.2 billion, accounting for roughly half of the gold-backed stablecoin market. Paxos Gold (PAXG) follows with around $1.5 billion. Together, the two tokens represent nearly 90% of the total tokenized gold supply, with XAUt recently surpassing PAXG after expanding its circulating supply aggressively throughout 2025.

The rise of gold-backed stablecoins highlights a broader trend of crypto participants seeking exposure to traditional safe-haven assets without leaving the blockchain. These tokens provide fractional ownership of physical gold stored in secured vaults, combining the stability of gold with the flexibility of on-chain assets.

Meanwhile, Tether has positioned itself as a major institutional gold holder. The firm added 26 tons of gold in the third quarter alone—outpacing most individual central banks during the same period. By the end of September, Tether’s total gold holdings reached approximately 116 tons, placing it among the world’s top 30 gold holders, ahead of countries such as Greece, Qatar, and Australia.

Gold-Backed Stablecoins Near $4 Billion as On-Chain Demand for Safe Havens Grows