What You Need to Know

• SmartGold has formed a partnership with Chintai Nexus to enable U.S. IRA account holders to tokenize their gold investments and earn yield using decentralized finance (DeFi) protocols.
• This initiative allows $1.6 billion in gold, held within IRAs, to actively participate in DeFi markets while keeping its tax-deferred status intact.
• The project is indicative of a growing trend towards the tokenization of tangible assets.

Overview

SmartGold, a provider of gold-backed individual retirement accounts (IRAs), is collaborating with Chintai Nexus, a tokenization platform, to assist U.S. investors in utilizing their gold assets on a blockchain and benefiting from yield-generating opportunities in DeFi.

The established framework allows for 1:1 tokenization of IRA-held gold on Chintai’s regulatory-compliant platform, which can then be leveraged as collateral in DeFi lending markets like Morpho and Kamino. This arrangement unlocks liquidity for investors, permitting reinvestment elsewhere while the physical gold remains secured and insured, ensuring that tax advantages of the IRA stay unaffected, according to a press release.

Historically, retirement savers have faced the dilemma of choosing between the security of gold and the potential for income. Now, to address this longstanding issue, Aaron Haley, Managing Director at SmartGold, stated: “For decades, gold investors have faced a difficult choice: security or yield. We’re turning the ultimate safe-haven asset into a powerful, productive tool for building wealth.”

This rollout taps into SmartGold’s $1.6 billion in secured assets, marking one of the most extensive implementations of tokenized gold, particularly aimed at U.S. retirement accounts, and highlights the increasing interest in transitioning physical assets into the digital economy.

Read more: Tokenized Gold Market Tops $2.5B as the Precious Metal Nears Record Highs