The ‘paper gold’ trap: Why your gold investment might just be a worthless piece of paper
Most gold investors hold 'paper gold' (like ETFs) which lacks direct proof of ownership, posing a systemic risk during a crisis.Summary
Björn Schmidtke, CEO of Aurelion, warns that approximately 98% of gold exposure is in 'paper gold'—such as gold ETF shares—which are essentially IOUs without specific proof of ownership over a physical bar. While this system works when few demand delivery, a 'seismic event' causing fiat devaluation could trigger mass redemption demands, leading to a logistical bottleneck and potential market rupture, as physical delivery of unallocated gold cannot happen instantly. Schmidtke argues that tokenized gold, like Tether Gold (XAUT), solves this by linking each token to a specific, allocated bar in a Swiss vault, providing a traceable 'title deed' transferable instantly on the blockchain. Aurelion has shifted its treasury to hold XAUT because durable ownership, not just owning gold, is crucial for long-term stability.
(Source：CoinDesk)