Tokenized Commodities Move Beyond Gold Toward Lending, Silver, and Oil Markets

Table of Contents

• You might want to know
• Main Topic
• Key Insights Table
• Afterwards...

You might want to know

• How could lending and leasing give tokenized commodities a role beyond tracking the prices of physical assets?
• What practical obstacles must be resolved before tokens representing silver, oil, and natural gas can reach broader markets?

Main Topic

Tokenized commodities may be developing from a relatively narrow market centered on gold into a wider system for financing metals, trading energy, and borrowing against physical assets. Executives at Paxos Labs, Theo, and Energy Substantiation (EnSub) see potential for blockchain-based products to serve more than investors seeking price exposure. In their view, tokens could also connect people and institutions holding capital with businesses that need financing for commodity inventories and operations.

The concept involves issuing blockchain-based tokens that represent ownership of, or exposure to, physical assets such as gold, silver, and oil. In principle, tokenization can make those interests easier to transfer and use in digital financial markets. But the broader opportunity depends on more than putting an asset’s value on a blockchain. Products must be linked to dependable physical holdings, workable custody and settlement arrangements, and reliable counterparties.

The market has grown, but it remains relatively small and concentrated. CoinGecko reported that tokenized commodities’ market capitalization reached $5.55 billion at the end of March 2026, compared with $1.43 billion at the beginning of 2025. Gold-backed tokens from Paxos and Tether accounted for almost 90% of that growth. The figures highlight both the category’s expansion and its reliance on gold as the leading use case.

Gold lending as a new use case

Paxos Labs is looking to lending as a way to extend the utility of gold tokens. Its PAXGy token is backed by PAX Gold (PAXG), whose quoted price in the source is $4,184.11. The reserves are deployed to institutional borrowers. The product is designed so that, as borrowers repay lending rates in ounce terms, each token can become redeemable for more PAXG. Holders may therefore have the potential to accumulate more gold while retaining exposure to its price.

Paxos Labs co-founder Bhau Kotecha described the central proposition as access. Historically, gold lending has tended to require both scale and established relationships, factors that can make the market difficult for many investors to enter. A token-based structure could broaden participation to individuals, family offices, and institutions. Borrowing against PAXGy could be a possible next step, though it is not presented as a guaranteed feature or outcome.

Importantly, lending introduces risks that are different from simply holding a token designed to track a commodity. Returns are not guaranteed, and a borrower’s failure to repay could reduce the value of the token. The structure’s potential benefits therefore depend on the quality of borrowers, the terms of the lending arrangements, and the safeguards protecting the underlying assets. Access alone does not eliminate the credit risks inherent in lending.

Silver and productive collateral

Silver could offer another way to combine commodity exposure with income. Theo’s thSLVR product passes income from institutional silver leases to holders while maintaining exposure to the metal’s price. Rather than treating a commodity solely as something to buy and hold, the approach seeks to connect its use in established leasing markets with a tokenized investment structure.

Theo Chief Investment Officer Iggy Ioppe sees potential demand from people and organizations that already own or use commodities. These include institutions looking to make collateral productive, refiners that need financing for inventory, and corporate treasuries seeking assets that can settle quickly. Such demand would make tokenization relevant not just to investors, but also to businesses operating within commodity supply chains.

Ioppe called silver “the natural second” after gold, pointing to industrial demand and an established leasing market. However, silver presents complications. Its greater volatility can make exposure less predictable, while a tighter supply of metal available for leasing may constrain how rapidly the market can grow. The existence of a familiar commodity and a leasing market does not by itself guarantee that a tokenized product will be easy to scale.

Ioppe forecasts that the tokenized commodities market could be worth tens of billions within five years and more than $100 billion within a decade. Looking further ahead, he expects tokenization to become part of ordinary commodity settlement and financing within 15 years. These are forecasts rather than established outcomes, and their realization would depend on adoption, dependable infrastructure, and the ability to address risks associated with the underlying assets.

Oil and the challenge of physical delivery

Oil may represent a larger opportunity, but it also brings significant logistical demands. EnSub expanded its WTIC token from Ethereum to Solana on Oct. 2. According to the company’s announcement, each token represents one barrel of West Texas Intermediate (WTI) crude and is backed by verified physical inventory. The relationship between tokens and inventory is especially important in this market because crude oil must be stored, transported, and tracked in the physical world.

EnSub co-founder and CEO JP Thieriot said that natural gas and Brent tokens are under development. He expects possible demand from energy buyers seeking to hedge costs, investors seeking commodity exposure, and suppliers needing working capital. Thieriot also predicted that oil tokens could account for a quarter of the oil market within 10 years. This is an ambitious projection, not a report of current market share.

Executives do not agree on how quickly energy products can follow the path of metals. Ioppe argued that the storage and transport requirements of energy make it harder to create tokens that generate income. Thieriot emphasized the practical conditions he considers essential: “verifiable inventory, workable custody and settlement.” Because commodities such as oil are continually moving through supply chains, a token must be connected to systems capable of confirming what is held, where it is held, and how the asset can be transferred or settled.

These concerns reveal a central distinction between tokenizing an asset’s price exposure and building a product that can function within physical commodity markets. A price-linked token may be easier to understand as an investment, but a token intended to support inventory finance or commodity settlement needs credible links to the asset and the businesses handling it. Custody, logistics, borrower risk, and the reliability of inventory verification remain material challenges.

The wider market could therefore develop in stages. Gold may remain the largest category while lending products test whether token holders can access income-generating arrangements. Silver may build on existing lease activity, provided volatility and metal availability can be managed. Energy products may take longer to scale because their physical supply chains are complex, even if they offer new possibilities for hedging, investment, and working-capital finance.

In each case, a token’s usefulness depends on whether it gives holders and commodity businesses a clear reason to use it. Faster digital transfer could be valuable, but it must work alongside asset verification, custody, settlement, and risk controls. The most durable products are likely to be those that connect blockchain systems to reliable physical markets rather than treating token issuance as an end in itself.

The source also pointed readers to the report “Blockchain finance platform Theo launches tokenized silver backed by $40 million in active leases.” CoinDesk describes itself as an award-winning media outlet covering the cryptocurrency industry and says its journalists follow a strict set of editorial policies. It states that it has adopted principles intended to support integrity, editorial independence, and freedom from bias. CoinDesk is part of Bullish (NYSE:BLSH), described as an institutionally focused global digital asset platform providing market infrastructure and information services. Bullish owns and invests in digital asset businesses and digital assets; CoinDesk employees, including journalists, may receive Bullish equity-based compensation.

Key Insights Table

Afterwards...

Tokenized commodities could become more than digital representations of gold, but their next phase will depend on practical performance in real markets. Lending and leasing may show how commodity holdings can support income or business financing, while energy tokens will test whether digital systems can keep pace with assets that must be stored and transported. The path forward will require trusted custody, transparent inventory verification, sensible risk controls, and settlement processes that work for both token holders and commodity businesses. If those foundations develop, tokenization may gradually become a useful part of commodity finance; if they do not, expansion may remain concentrated in simpler, gold-linked products.