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Galaxy Digital's Tokenized Gold Play: How Tenbin Is Rebuilding Commodity Markets from the Ground Up

· 9 min read
Dora Noda
Dora Noda
Software Engineer

Gold just broke $5,000 per ounce. The tokenized gold market hit $5 billion for the first time in history. And Mike Novogratz's Galaxy Digital just led a $7 million investment into a startup that wants to do something no one else has tried: rebuild the entire infrastructure for trading gold and foreign exchange on-chain.

This isn't another wrapped asset play. Tenbin Labs is betting that the current approach to tokenized commodities—custody wrappers that bolt blockchain rails onto legacy market structure—has hit its ceiling. The company's solution uses CME futures contracts instead of physical custody to deliver something the $35+ billion tokenized RWA market desperately needs: deep liquidity, tight pricing, and yield that actually makes sense for DeFi users.

The Tokenized Gold Boom: $5 Billion and Growing​

The numbers tell a compelling story. Tokenized gold's total market cap surged 177% in 2025 to surpass $4.4 billion, then broke through $5 billion in January 2026. Tether Gold (XAUT) and Pax Gold (PAXG) command roughly 89% of the market, with XAUT alone representing over 12.7 metric tons of vaulted gold.

But here's what's more interesting: trading volume. The tokenized gold market recorded $178 billion in trading activity during 2025, with $126 billion in Q4 alone. That volume surpasses all but one U.S. gold ETF—a remarkable achievement for an asset class that barely existed five years ago.

The demand driver is obvious. When Bitcoin dropped below $88,000 during January's geopolitical tensions around Greenland sovereignty and Denmark's Treasury selloff, tokenized gold decoupled completely from the crypto bloodbath. XAUT climbed 10% while major cryptocurrencies tanked. Gold isn't just a hedge anymore—it's becoming a core DeFi primitive.

Meanwhile, physical gold continues its historic run. J.P. Morgan forecasts prices averaging $5,055/oz by Q4 2026, with Goldman Sachs projecting $5,400/oz. Central bank buying hit record levels, with gold now representing a larger share of central bank reserves than U.S. Treasuries for the first time since 1996.

Why Current Tokenization Models Hit a Wall​

So if tokenized gold is booming, why does anyone need Tenbin?

The answer lies in infrastructure limitations that current market leaders can't solve. As Tenbin's team puts it: "Today's tokenization models wrap assets without rebuilding the market infrastructure that gives these assets utility."

The problems are measurable:

  • Shallow liquidity: Wrapped gold tokens often trade with significant slippage outside major centralized exchanges
  • Settlement delays: On-chain gold transfers don't benefit from the instantaneous settlement blockchain enables when bridging to fiat redemption
  • Price distortions: On-chain prices frequently diverge 1-3% from spot gold prices, creating friction that institutional players won't tolerate
  • Yield gap: PAXG and XAUT holders get zero yield—they're just holding gold with extra steps

That last point matters more than it might seem. In a world where U.S. Treasuries yield 4-5% and stablecoin yields hover around 5-8%, holding non-yielding tokenized gold represents a significant opportunity cost. DeFi users demand yield. The current model doesn't deliver.

The Tenbin Approach: Futures, Not Custody​

Tenbin's architecture takes a fundamentally different approach. Instead of wrapping physical gold in a custody wrapper, the protocol uses CME futures contracts for pricing and exposure management.

This isn't just a technical choice—it's a philosophical one. CME futures are the most liquid gold market in the world, with billions in daily volume and tight bid-ask spreads. By building on this infrastructure rather than competing with it, Tenbin can offer:

Futures basis yield: The price difference between futures contracts and spot gold (called "basis" or "carry") typically ranges from 2-6% annualized. Tenbin captures this yield and passes it through to token holders. Users get gold exposure plus yield—something impossible with current custody-based models.

Price integrity: CME CF Reference Rates serve as transparent, replicable benchmarks that institutional participants already trust. No more guessing if your tokenized gold actually tracks real gold prices.

Deep liquidity access: Rather than fragmenting liquidity across multiple blockchain venues, Tenbin inherits the depth of the CME market while offering 24/7 DeFi composability.

Will Nuelle, General Partner at Galaxy Ventures, summarized the opportunity: "They're not wrapping assets, they're rebuilding the entire issuance and liquidity stack for on-chain markets."

Beyond Gold: The FX Opportunity​

Tenbin's gold product launches first, but the team has bigger ambitions. Following the gold launch, the protocol will expand to high-yield foreign exchange tokens tied to emerging market currencies—Brazilian Real (BRL), Mexican Peso (MXN), Japanese Yen (JPY), and others.

This is where things get interesting for DeFi users seeking alternatives to USD stablecoins.

Emerging market currencies have always offered attractive carry trade opportunities. The Brazilian Real, in particular, serves as the "ultimate destination currency" for Latin American carry trades, with institutional investors actively seeking BRL exposure through derivatives. Mexico's peso offers liquidity and accessibility that makes it the most freely tradable LatAm currency.

But accessing these yields typically requires:

  • Local banking relationships
  • Regulatory complexity
  • FX settlement delays (3-5 hours for BRL, longer for others)
  • Counterparty risk with correspondent banks

Tokenized FX on Tenbin's infrastructure potentially solves all of this. A DeFi user in Singapore could gain BRL carry trade exposure through a smart contract, earning yields that previously required institutional infrastructure and local market access.

The timing aligns with broader market shifts. Circle launched StableFX in November 2025, targeting the $10 trillion daily currency market with 24/7 on-chain conversion. The institutional interest is clearly there—the question is who builds the infrastructure that captures it.

The Backing: Why This Investor Roster Matters​

Galaxy Ventures leading the round sends a signal. Mike Novogratz's firm has been building institutional crypto infrastructure since 2018, with deep relationships across traditional finance and crypto. Galaxy understands what institutions need to get comfortable with tokenized assets.

The supporting investors reinforce the market-making story:

  • Wintermute Ventures: One of crypto's largest market makers, critical for ensuring liquidity on day one
  • GSR: Another major institutional market maker with deep derivatives expertise
  • FalconX: Institutional-grade trading infrastructure provider
  • Hidden Road and StoneX: Prime brokerage partners already integrated for the gold launch
  • Ripple Prime: Interesting inclusion suggesting potential XRP Ledger integration

This isn't a typical crypto VC round where investors hope the token pumps. This is infrastructure capital from firms that understand what it takes to build institutional-grade markets.

The Bigger Picture: RWA Tokenization's Moment​

Tenbin's timing coincides with a broader institutional awakening to tokenized real-world assets. The market exceeded $36 billion in late 2025 (excluding stablecoins), with projections ranging wildly—from McKinsey's conservative $2 trillion by 2030 to BCG's ambitious $16 trillion.

The asset mix is evolving rapidly:

  • Tokenized U.S. Treasuries: $8.7 billion on-chain, roughly 45% of total RWA
  • Private credit: Dominating at 52% of the market
  • Commodities: Growing but still fragmented across multiple approaches

What's missing is standardization and infrastructure that institutions trust. BlackRock's BUIDL fund, Franklin Templeton's on-chain offerings, and JPMorgan's Canton Network experiments all point toward serious institutional interest. But fragmentation creates measurable inefficiency—1-3% pricing gaps for identical assets across chains and 2-5% friction for cross-chain capital movement.

Tenbin's approach—building on CME infrastructure rather than reinventing it—could provide the kind of price integrity and liquidity depth that finally brings institutional capital off the sidelines.

Risks and Open Questions​

No investment thesis is complete without acknowledging what could go wrong:

Regulatory uncertainty: Using futures for exposure instead of physical custody is novel. Regulators might view this differently than custody-based models, potentially creating compliance challenges.

Futures roll costs: Maintaining exposure through futures requires rolling contracts, which introduces costs that could erode yield during certain market conditions.

Competition from incumbents: Tether bought 27 metric tons of gold in Q4 2025 alone and now holds 140+ tons. If XAUT or PAXG add yield mechanisms, Tenbin loses its differentiation.

Execution risk: Rebuilding market infrastructure is hard. The team needs to deliver on-chain products that actually work as promised, which countless projects have failed to do.

Market correlation: If gold prices correct 5-20% as some analysts warn (driven by rate hikes or dollar strength), early Tenbin adopters could face losses regardless of protocol performance.

What to Watch​

Several milestones will determine whether Tenbin's approach succeeds:

Q1 2026: Gold product launch with Hidden Road and StoneX integration. Early liquidity and pricing accuracy will set the tone.

Mid-2026: FX token launches. The BRL and MXN products will test whether DeFi users actually want EM currency exposure.

Trading volume: Will Tenbin's model attract meaningful volume, or will users stick with the liquidity and familiarity of PAXG and XAUT?

Institutional adoption: Galaxy's involvement suggests institutional interest, but actually onboarding hedge funds and asset managers requires more than good technology.

The Bottom Line​

Galaxy Digital's investment in Tenbin represents a bet on infrastructure over wrappers—on rebuilding market structure rather than bolting blockchain rails onto legacy systems. In a tokenized RWA market approaching $40 billion with trillion-dollar projections, the companies that solve liquidity, yield, and price integrity will capture disproportionate value.

The tokenized gold market just proved it can hit $5 billion and $178 billion in annual volume. The question is whether that's the ceiling for custody-based models or just the beginning of something much larger. Tenbin is betting it's the latter—and building the infrastructure to prove it.

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