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Physical Gold-Backed Tokens

Category: Physical Gold-Backed Tokens

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Buying Gold-Backed Tokens

Gold-backed tokens are a controversial investment with many physical metals buyers – and indeed until summer 2022, they were a sub-category within the precious metals market that Bullion.Directory has always been reluctant to list.

We’ve been reluctant not because we’re Luddites or anti-crypto, but because it’s a new (mostly unregulated) market within which there’s a fairly low barrier to entry for creating new tokens.

Indeed, new gold-backed tokens have appeared and disappeared with alarming regularity. Between investigating the category in 2018 and adding it in 2022 – of the 30 gold tokens we were originally going to list, 17 have closed down, ceased trading or simply vanished from the web – domains dropped and once-buzzing social media accounts abandoned.

But now the market has matured. The scam artists, the dreamers and the wishful thinkers have been removed leaving a handful of very strong players – players with significant market backing and in some cases support from the biggest names in the precious metals industry.

So finally, after the initial hype, the rush – and the fear of missing out that made and lost fortunes – gold tokens have at last started to deliver on their initial promise behind all those initial offerings.

Gold can now be bought, sold and exchanged in moments with full traceability and clear chain of custody, combining the best of what physical metals can offer with cutting-edge technology.

Now that’s not to say all of these tokens will still be around in another few years, but those with the best backing and the strongest market connections could well be the future of gold trading.

Are Gold-Backed Token Sales Taxed?bullion sale tax

While physical bullion sales can often be free of sales tax and in some cases for specific products free of any Capital Gains Tax (CGT) – tokens are seldom treated by the tax office as the physical metals they represent.

Bear in mind that the market is still young and tax departments are typically far behind the curve when it comes to emerging technologies, but currently in most cases and most jurisdictions tax will be payable on purchases and sales and additionally CGT will be payable on any gains.

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IMPORTANT: The above tax details are listed for information purposes only and are believed correct at time of publication. Bullion.Directory are not tax experts. All inquiries about local and state taxes should be addressed to the appropriate local body. Taxes and taxation are subject to change.