Gold-Backed Crypto Minting Soars Amid Trade Turmoil

Gold-Backed Crypto Sees Minting Surge

Commodity-backed cryptocurrencies, particularly those backed by gold, experienced a significant surge in minting this week, reaching levels not seen in at least five years. This increase is primarily attributed to recent volatility in the gold market.

The surge in minting comes amidst trade turmoil and uncertainty in the precious metals market.

Triggered by Tariff Concerns

The spike coincided with gold futures briefly exceeding $3,500, an all-time high. This price movement was fueled by a warning from the Swiss Precious Metals Association regarding the potential impact of proposed U.S. tariffs on Swiss gold exports. The association suggested that a 39% tariff could negatively impact the international flow of physical gold.

Although gold prices retreated following a White House statement clarifying that gold bar imports would be exempt from tariffs, the initial surge triggered considerable activity in the gold-backed crypto market. Gold-backed tokens, including Tether Gold and Paxos Gold (PAXG), briefly topped $3,390.

Minting Volumes Double Previous Record

Data from RWA.xyz indicates that minting volumes for commodity-backed tokens reached $439 million this week. This figure more than doubles the previous record of $195 million, set in 2021.

These tokens, backed by physical gold reserves in vaults, offer investors exposure to gold that can be transferred on-chain.

Switzerland's Role

Switzerland is a key player in the global gold market, refining a significant portion of the world's gold. The country exported over $61 billion worth of gold to the U.S. in the past year.

The proposed tariffs sparked political debate in Switzerland, with some advocating for the gold sector to bear some of the economic burden. Gold accounts for over a quarter of Switzerland's exports, according to data from the Swiss National Bank.