Commodity tokenization
Commodity tokenization: how to tokenize gold, metals, energy and agricultural commodities
Commodity tokenization issues digital tokens that represent a claim on a physical commodity, such as gold in a vault or grain in a warehouse, or on the income it produces. The commodity stays with a custodian or warehouse; the token records who holds the claim, moves on a blockchain and can carry rules on who may hold it. A legal structure, set up with counsel, ties each token to the asset.
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Educational overview, not legal, tax or investment advice. Whether a commodity token is a security, a fund unit or another regulated instrument depends on its structure and where it is offered. Consult qualified counsel.
What is commodity tokenization?
It is the same idea as tokenizing property or a fund, applied to physical goods. A legal owner of the commodity (often a special-purpose vehicle) issues tokens that give holders a defined right: a share of the stored commodity, a right to redeem it, or a share of the income from selling it. The token is only as good as that right, the custody behind it and the records that prove the commodity exists.
Which commodities can be tokenized?
- Precious metals, such as allocated gold or silver held in a vault, where each token maps to a weight of metal.
- Industrial metals, such as copper or aluminium in a warehouse, usually through a warehouse receipt or an owning entity.
- Energy, such as stored fuel or the output of a production asset, typically through an entity that owns the asset or offtake contracts.
- Agricultural commodities, such as coffee, cocoa or grain, often tokenized per harvest, lot or warehouse receipt.
- Environmental commodities, such as carbon credits, where the token must stay consistent with the registry that issued the credit.
Each type has its own storage, insurance, quality and delivery questions. Those are answered by the structure and the custodian, not by the token.
How does commodity tokenization work?
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01
Secure the commodity
Place the commodity with a vault, warehouse or custodian, with insurance, audit rights and clear title documents.
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02
Set the legal structure
With counsel, decide what each token represents and who issues it, usually an SPV that owns the commodity or the receipts, and how redemption works.
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03
Choose the token standard
Use a permissioned standard such as ERC-3643 or CIP-113 when holders must be verified investors, or a fungible or unique-asset standard when the structure allows it.
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04
Onboard investors and issue
Investors pass KYC (and KYB for companies), sign the agreements and pay; tokens are minted to their wallets.
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05
Run it
Publish valuations, pay income, open redemption windows and keep the register and the custody records in agreement.
How does T-Suite support commodity tokenization?
- Issue with the Tokenization Wizard on EVM networks, Cardano or the XRP Ledger, using the standard that fits the structure.
- Keep the asset record: asset managers can hold the asset’s documents, operations and valuations, such as vault certificates, warehouse receipts and appraisals, in the Asset Management platform and pass it to issuance through the Tokenization Bridge.
- Update NAV: issuers record a new NAV per token, written on-chain to the NAV registry for EVM offerings and anchored on Cardano.
- Pay and redeem: dividends and distributions, and redemption windows with set capacity.
- Take subscriptions: KYC/KYB, agreements and e-signature, and payment by card, bank transfer, USDC or USDT, or from a custodian balance.
- Find investors with the Distribution Hub and Libby AI, and prepare documents for counsel with the Structuring module.
- Trade: a peer-to-peer secondary market is live on Base mainnet.
Libertum provides the software. It does not store, insure, assay or certify physical commodities, and its custody licence covers stablecoins (USDT, USDC and RLUSD), not commodities or security tokens.
Which token standard should a commodity token use?
| If the token… | Consider | Live on mainnet |
|---|---|---|
| is offered to verified investors only (a security or fund-like claim) | ERC-3643 or CIP-113, or an authorised XRPL token | ERC-3643 on Base, Ethereum, Polygon and Arbitrum; CIP-113 on Cardano; XRP Ledger |
| may move freely between holders where the law allows | ERC-20 or CIP-20 | ERC-20 on Base and Ethereum; CIP-20 on Cardano |
| represents one specific lot, bar or receipt | ERC-721 | Base |
Use the chooser below for a recommendation based on your answers.
How are commodity tokens regulated?
It depends on what the token gives the holder and where it is offered. A token that gives a share of profits or of an investment vehicle is often treated as a security or a fund unit. In the European Union, crypto-assets that are not already regulated as financial instruments can fall under MiCA, which has specific rules for asset-referenced tokens. Start from the tokenization regulation hub and confirm the analysis with counsel in each country where you offer.
How much does it cost to tokenize a commodity?
The platform is the smaller part. Budget for custody and insurance, audits of the stored commodity, the legal structure and offering documents, and investor onboarding, then the platform plan and transaction fees. See how much tokenization costs for a breakdown, and the plans page for current prices.
See an offering run on T-Suite
Issuer operations from creating an offering to orders, distributions and redemptions, the same flow a commodity token follows.
Transcript: Issuer operations demo
Raising capital is only half the job. Running the offering afterwards is where it gets messy.
Orders in spreadsheets, a transfer agent for the cap table, lawyers for every compliance action, and investors waiting on updates.
On Libertum, you create the offering step by step: the asset, the financial terms, the token standard and the chain.
Subscription orders arrive in one queue. You accept the order, confirm the payment, and mint the tokens to the investor.
Your cap table updates itself. Open any holder to see their position and the compliance controls.
Freeze a wallet, unfreeze it once resolved, or recover tokens when a regulator requires it, all enforced on-chain.
When the asset is revalued, you update the NAV, and investors see the new price.
When investors want to exit, you open a redemption window with a set price and capacity.
Requests come to you to approve, settle and record the payout.
For funds, asset managers and fund administrators: run the whole offering lifecycle in one place. Book a demo at libertum.io.
Choose your standard
Which token standard fits your commodity?
Answer three quick questions about your commodity token and see which standard fits, where it is live on mainnet today and how compliance is enforced.
Step 1 of 4
What are you issuing?
Choose the option closest to your token.
Commodity tokenization FAQ
Can you tokenize gold?
Yes. Gold is the most common tokenized commodity. Allocated metal is held by a vault, and each token represents a defined weight or a share of an entity that owns it, under a structure set up with counsel.
Who holds the physical commodity?
A vault, warehouse or custodian chosen by the issuer. The token records the claim; it does not hold the commodity. Libertum does not store or insure physical commodities.
Are commodity tokens securities?
Often, but not always. It depends on what the token entitles the holder to and where it is offered. Confirm with counsel in each jurisdiction.
How is the value of a commodity token updated?
On T-Suite, the issuer records a new NAV per token, which is written on-chain to the NAV registry for EVM offerings and anchored on Cardano.
Can holders redeem tokens for the commodity?
If the structure provides for it. T-Suite runs redemption windows with set capacity; physical delivery, if offered, is handled by the issuer and its custodian under the offering terms.
Can commodity tokens be traded?
Where the offering terms and the law allow. T-Suite’s peer-to-peer secondary market is live on Base mainnet, and permissioned standards keep transfers to eligible holders.
Tokenize your commodity on T-Suite
Talk to us about the structure, the standard and the chain, and see how an offering runs from issuance to redemption.