Professor Lin Chen from the University of Hong Kong: Digital gold is shifting from an "hedge asset" to a "programmable financial primitive"

ME News Report, April 19 (UTC+8), jointly hosted by ME Group and the University of Hong Kong Business School Executive Education, the "Crypto Finance Forum" was held today in Hong Kong. Professor Lin Chen from HKU Business School revealed that tokenized gold has become the core bridge connecting physical assets and decentralized finance by 2026.

Research Highlights:

• Market size and liquidity explosion: As of February 2026, the total market value of tokenized gold reached $6.1 billion. PAXG and XAUT account for approximately 95% of the market share. The trading volume growth rate in 2025 was as high as 1,550%, with decentralized exchanges (DEX) reaching $4.4 billion in trading volume, demonstrating extremely high asset activity.
• Stability under extreme stress: Professor Lin Chen's research covers the "10-σ gold crash," macro shocks, and geopolitical crises (such as the situation in February 2026). Data shows that tokenized gold is highly anchored to spot prices, and during traditional market closures, its 24/7 trading feature provides the only global price discovery channel.
• Financial integration and RWA innovation: The study indicates that tokenized gold has evolved beyond simple "physical backing" to become "programmable financial primitives." It is widely used as collateral in protocols like Aave, supporting interest accrual and lending, enabling a leap from "store of value" to "interest-earning asset."
• Frontier application prospects: Professor Lin Chen discussed emerging fields such as the tokenization of unexploited gold reserves, the World Gold Council (WGC) promoting a "wholesale digital gold" architecture, and gold tokens enabling cross-border payments through virtual asset cards.

Conclusion:

Tokenized gold, through fractional trading with 18 decimal places, ultra-fast settlement within 12 seconds, and cryptographic verification mechanisms, addresses the issues of high costs, difficulty in carrying physical gold, and slow liquidity in traditional physical gold. It is opening an era of "optional digital gold standard," providing global investors with a robust, transparent, and efficient digital asset option. (Source: ME News)