If you read any newsletters that are more macro-oriented along with what you read from The Block, then perhaps you’ve been caught up with the fact that gold has continued to surge to record highs recently, continually boosted by geopolitical tensions.

Given the recent success of the safe-haven asset, it would perhaps be expected that this would translate to some more action in the gold stablecoin market.

However, the gold stablecoin market has historically been pretty bleak. The two major players are Tether, with XAUT, and Paxos, with PAXG, but compared to the two firms’ dollar stablecoins, USDT and USDP, these seem like just a blip. Even with the recent run-up in gold, XAUT has a market cap of $580 million, and PAXG’s even lower at just under $450 million.

XAUT’s supply has been constant, around 246,500 since March 2022, whereas PAXG’s supply has been declining from a peak of around 340,000 in August 2022 to just 182,650 now.

Looking at trading volume on centralized exchanges for these gold stablecoins, we have seen a bit of an uptick, but that can partially be attributed to the rising value of gold.

The 7-day moving average of trading volumes for both stablecoins climbed relative peaks in mid-March and began falling again despite gold continuing to climb. The peaks were also much lower than highs reached earlier in these stablecoins’ careers, like during the 2023 regional banking crisis.

Volumes have been on a slow rise since hitting a low in May. This weekend did prove pivotal for PAXG, though, as its volume (un-averaged) jumped up to $71 million on April 13, the highest level since May 2022, as reports of Iranian drone attacks on Israel stoked fears of broader conflict. XAUT volumes also picked up slightly, but not to the same degree.

That being said, $71 million of trading volume is still quite low for a crypto asset. The larger dollar-pegged stablecoins tend to do billions of dollars of volume a day on-chain alone. On CEXs, volumes for dollar stablecoins are naturally much higher since many exchanges that don’t support USD use these stablecoins as a main quote asset. They are even popular on exchanges with USD support to offer a crypto-native option for trading.

So it seems as though the gold-backed stablecoin market is still a pretty niche subsector, despite the recent popularity of gold in the broader market.

This is an excerpt from The Block's Data & Insights newsletter. Dig into the numbers making up the industry’s most thought-provoking trends.