Tokenized Gold Could Unlock Liquidity, But Trust Remains Key Challenge: Gold Token SA CEO

According to Kurt Hemecker, CEO of Gold Token SA, the tokenization arm of MKS PAMP, digital gold has the potential to transform bullion into a more liquid financial instrument. Unlike traditional bullion markets that operate during business hours, tokenized gold can trade 24/7, providing continuous liquidity. More importantly, Hemecker said tokenization strengthens the case for gold to be recognized as a High-Quality Liquid Asset (HQLA) under banking regulations, which could allow institutions to use it in repo transactions and interbank settlements.

However, Hemecker emphasized that trust remains the biggest obstacle. Tokenized gold depends on confidence in the underlying physical metal, the custodian, legal ownership structure and storage jurisdiction. The industry also lacks standardized custody agreements and operational standards needed for central banks and large financial institutions to participate. Hemecker noted that market participants will increasingly scrutinize what backs tokens, property rights, sourcing and provenance.