Tokenization of Real-World Assets a Key Driver of Digital Asset Adoption: Bank of America

The tokenized gold market reached over $1 billion in value last month, the report said.

AccessTimeIconApr 14, 2023 at 9:10 a.m. UTC
Updated May 9, 2023 at 4:12 a.m. UTC

The tokenized gold market surpassed $1 billion in value last month as the tokenization of real-world assets gathers pace, Bank of America (BAC) said in a research report Thursday.

Tokenization is the process of putting ownership of tangible assets, such as precious metals, on the blockchain, and offers the convenience of buying and selling these assets around the clock because the transactions do not involve traditional brokers.

Bank of America sees the tokenization of real-world assets, such as commodities, currencies and equities, as a “key driver of digital asset adoption.”

Before the advent of tokenized gold, investors seeking exposure to the gold market could buy exchange-traded-funds (ETF) and futures, or those looking for exposure to physical gold could buy it through dealers, “but these investment vehicles come with drawbacks related to cost and/or liquidity,” the report said.

“Tokenized gold provides exposure to physical gold, 24/7 real-time settlement, no management fees and no storage or insurance costs.” The low minimum investment increases accessibility and “fractionalization enables the transfer of physical gold ownership and value that was not previously possible,” analysts Alkesh Shah and Andrew Moss wrote.

Tokenizing the precious metal could increase liquidity and enable investors to rebalance portfolios quickly and efficiently, the note said.

Tokenization of the gold supply chain could benefit ESG-focused investors that need proof that gold came from a specific mine or from a specific region, the report added.

Edited by Oliver Knight.


Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.

Author placeholder image

Will Canny is CoinDesk's finance reporter.

Learn more about Consensus 2024, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to to register and buy your pass now.