Tokenized Gold Weathers DeFi Stress Test, Collateral Use Stays Below 2%

Tokenized gold converts claims on physical bullion into blockchain-based assets that can trade around the clock and plug into decentralized finance. Products led by Paxos’ PAXG and Tether Gold (XAUT) have become a major segment of the real-world asset market, with spot trading volume reaching $90.7 billion in the first quarter of 2026. The key test is whether that liquidity can support lending and orderly liquidations during sharp price moves, rather than merely provide a digital wrapper for bullion.

RedStone’s Tokenization & RWA Standards Report, dated March 26, said the market withstood a major stress event after gold fell 4% on Jan. 30 and tokenized bullion products including XAUT dropped more than 7%. The selloff drove roughly $120 million of liquidations across blockchain-based metals markets and forced liquidations of gold-backed collateral on Aave, which continued operating without a system failure. Still, less than 2% of tokenized gold is used as DeFi lending collateral, underscoring the gap between trading growth and productive onchain adoption.