SmartGold, a gold-backed Individual Retirement Account (IRA) provider, has partnered with tokenization platform Chintai Nexus to allow U.S. investors to tokenize their gold holdings and earn yield through decentralized finance (DeFi) protocols. This initiative tokenizes IRA-held gold on a one-to-one basis on Chintai's regulated platform, converting physical gold into digital tokens that can be used as collateral in DeFi lending markets such as Morpho and Kamino.
The structure enables investors to generate passive income while maintaining the tax-deferred status of their IRAs, addressing a historical trade-off where gold offered stability but no yield. SmartGold's managing director, Aaron Haley, stated, "We're turning the ultimate safe-haven asset into a powerful, productive tool for building wealth." The rollout covers $1.6 billion in vaulted assets, marking one of the largest tokenized gold deployments to date and the first tailored for U.S. retirement accounts.
Benefits include enhanced yield potential, increased liquidity, and transparency through blockchain technology. However, challenges involve market volatility, regulatory uncertainties, smart contract risks, and complexity in navigating DeFi. Investors are advised to consult financial advisors to assess risks and suitability.
