Tokenization of gold breaks the spell of "zero interest": cryptofinance re-enscribes the ancient wisdom of jewelers to realize interest-bearing physical gold.

As the global gold price climbs to historic highs driven by risk-off sentiment, a financial innovation that integrates ancient business logic with cutting-edge blockchain technology has become a market focus. Singapore's famous jewelry retailer Mustafa Gold, asset management company FundBridge Capital, and the tokenization platform Libeara supported by Standard Chartered Bank have jointly launched an interest-bearing gold token named thGOLD (backed by the MG999 fund). The core breakthrough of this product lies in successfully replicating the centuries-old "gold leasing" mechanism that has been circulating in the Dubai and Indian gold-silver markets, by lending investors' gold assets in physical form to jewelers for production. This allows gold, originally considered a "dead asset," to generate stable internal returns in the digital age. The operational logic of this model aligns closely with the risk management needs of the physical industry. In traditional jewelry trade, craftsmen and retailers typically choose to borrow physical gold instead of using cash directly to hedge against fluctuations in gold prices affecting profits. Under this mechanism, jewelers' repayment obligations and inventory values are both denominated in physical gold, ensuring that assets and liabilities remain aligned regardless of how gold prices fluctuate. Mustafa Gold, the jewelry retailer in Singapore, diversified its financing channels through this initiative, garnering a more risk-mitigating ability than traditional bank USD loans with its physical gold reserves. Meanwhile, FundBridge Capital allows global investors to participate by tokenizing this debt, enabling them to earn approximately 1% to 2.3% net annualized returns after deducting fees from the around 2.5% loan interest paid by jewelers, marking a groundbreaking development in the gold investment sector. For investors, they not only gain exposure to gold, but also receive additional income from the loan interest paid by Mustafa. After deducting management fees, FundBridge pays token holders a 1% return. There are various ways to invest in gold without holding physical gold, including ETFs, futures, options, mutual funds, and also digital options like gold-backed tokens issued by Tether and Paxos. However, FundBridge's Chief Investment Portfolio Manager John Bao Vu points out that these products do not directly provide returns, and some, such as ETFs, generate costs in the form of management fees. "Gold investments usually face a negative return dilemma," John Bao Vu said. "We were thinking about how to further mitigate this negative return and thus came up with the idea of collaborating with Mustafa." Gold lending or leasing businesses have become increasingly institutionalized and complex. Jewelers can manage risks through gold loans, forward contracts, hedging plans, etc., but smaller retailers rely more on traditional bank financing. For Mustafa, FundBridge provides an alternative source of funding. "Our primary source of borrowing is banks," said Ivan Hoo, the Executive Director of Mustafa Gold Jewelry. "However, these loans are denominated in USD rather than in gold. This diversification of funding is beneficial for us, opening up a new pool of investors and significantly expanding our business funding channels." Over the past four years, amidst increased geopolitical uncertainties, investors have been seeking safe-haven assets, driving gold prices nearly tripling, with cryptocurrency companies responding to the demand by issuing more tokenized gold products. FundBridge does not need to hold gold to maintain the token's value, as its value is supported by contractual debt rights from Mustafa. At maturity, regardless of market price fluctuations, token holders have the right to receive cash return equivalent to a specific quantity of gold. To ensure that the token is pegged to the price of gold, the token issuance quantity must be maintained at a fixed ratio to the outstanding loan amount. "Price risk is transferred to fund investors," explained John Bao Vu. "They earn returns as an upward return, while also bearing the risk of gold price fluctuations, which is the gold exposure that investors are looking for." FundBridge has raised $15 million and aims to raise $100 million in the initial stage. Collaborating with retailers like Mustafa, who require a large amount of gold annually, ensures rapid deployment of funds. "We're just bringing this gold-denominated lending model into the digital age," Ivan Hoo summarized. "Old things are being brought back in new forms." From the perspective of industry evolution, the outbreak of this news in April 2026 marks the transition of Real World Asset (RWA) tokenization from simple "digital storage" to a new stage of "capital operation." Compared to traditional products like Tether Gold (XAUt) or PAX Gold (PAXG) that only provide price pegging, thGOLD introduces an active income mechanism, addressing the high holding costs and absence of dividends in a long-standing pain point in gold holdings. Furthermore, by integrating with decentralized finance protocol Pendle and other secondary market platforms, the token also supports yield-stripping transactions, providing institutional investors with more sophisticated income management tools. According to the latest analysis by Bloomberg and MoneyControl, this attempt to precisely match industrial demand with on-chain liquidity sets a mature paradigm for the digitization of more commodities in the future. However, in an environment where gold prices are fluctuating at high levels, this innovative product also demands a higher level of risk identification from investors. As the value of thGOLD depends not only on international gold prices but is also deeply tied to the credit rating of borrowers like Mustafa Gold, investors are effectively transferring from pure market price risk to credit risk. Although the project has technical support and compliance audit protection from Standard Chartered Bank, the underlying assets are fundamentally contractual debt rights against jewelers, not static gold bricks stored in a vault. In the current complex geopolitical context, whether this interest-bearing model can maintain stability and liquidity in long-term fluctuations will determine its ability to eventually dominate the trillion-dollar gold market. In addition, through integration with decentralized finance protocols like Pendle and other secondary market platforms, the token also supports yield-stripping transactions, providing institutional investors with more sophisticated income management tools. According to the latest analysis from Bloomberg and MoneyControl, this attempt to accurately match industrial demand with on-chain liquidity provides a mature paradigm for the digital transformation of more commodities in the future. However, in an environment where gold prices are fluctuating at high levels, this innovative product also requires investors to have a higher level of risk identification. As the value of thGOLD is not only dependent on international gold prices but also deeply connected to the credit level of borrowers like Mustafa Gold, investors are effectively transitioning from pure market price risk to credit risk. Despite having technical support and compliance audit protection from Standard Chartered Bank, the underlying assets are essentially contractual debt rights against jewelers, not static gold bricks stored in a vault. In the current complex geopolitical environment, whether this interest-bearing model can maintain stability and liquidity in long-term fluctuations will be the key to determining whether it can eventually dominate the mainstream position in the trillion-dollar gold market.