The Future of Commodity Investment Is Here

If something can be unitised, it can be tokenised… and if it can be tokenised, it can be traded. That fundamental theory underpins the ability to tokenise Real World Assets, and is one of the key services that we offer at Mesh.trade.

A common misconception in the market is that a tokenised asset is only a cryptocurrency, like Bitcoin, says Mesh MD Connie Bloem. “At its core, a token is a unit of value that is transacted on a blockchain. It can be anything. It can be a bond. It can be an ounce of gold. It can be a house. It can be a painting. Anything that you can unitise, you can then trade and settle via blockchain technology, and that is called a token.”

It could, for that matter, be a priceless violin. In June 2024 the Empress Caterina, a 1708 Stradivarius violin once owned by Russian Empress Catherine the Great and now valued at $9 million, was tokenised as collateral for a loan.

In 2021, a Swiss-based crypto bank tokenised the legal ownership rights to Pablo Picasso’s 1964 oil on canvas masterpiece Fillette au Béret on the blockchain. The 4 000 digital tokens were then sold to more than 50 investors at 1 000 Swiss francs each. At a time when NFTs (remember those?) were being bought and sold despite having no intrinsic value, Finance 3.0 pioneers were demonstrating the fungible, tangible value behind tokenised assets.

Investing in tokenised gold

Gold is one of humankind’s most foundational monetary assets, bought and sold over centuries. It’s only natural, then, that it would form part of the global shift towards tokenised, smart assets. According to CoinGecko, the global value of tokenised gold is now well above $1 billion.

Gold, too, can be tokenised – and has been, in the TroyGold Krugerrand (TGLD) token, now available on Mesh.trade. Each token represents 1 Troy ounce (which equates to approximately 31.1 grams of physical gold). And because it’s tokenised, it can be fractionalised: Mesh.trade’s platform offers unprecedented hyper-fractionalised ownership of gold bullion Krugerrand coins, with a minimum required investment of just R50.

“Typically, South Africans may only purchase 1oz, ½oz and, in some cases, ¼ oz and 1/10th oz Krugerrand coins from various distributors,” explains Rob Mackay, Investor Manager Lead at Mesh.trade.

“The R50 minimum investment for the TroyGold Krugerrand (TGLD) token removes those traditional barriers to entry, and makes owning physical gold a real option for all investors,” Mackay says. “It means that investors accumulate their fractional investments over time to the equivalent weight of one full ounce (31.1 grams) of gold, they can then redeem their tokens and arrange with TroyGold for secure delivery of their Krugerrand coins to their homes, if they so desire.”

A Bullion Krugerrand, Mackay adds, is a gold coin primarily designed for investment purposes. It closely tracks the spot price of gold and is widely recognised as a store of value. “Bullion Krugerrands are made of 22-karat gold with a copper alloy, giving them added strength and durability compared to pure gold coins,” he says. “Their global recognition, ease of trade, and direct link to the gold spot price make them a trusted choice for diversifying investment portfolios.”

Spot price of gold

How, though, does one determine the price of a gold-linked token, when the price of gold changes all the time? After all, gold is a commodity. Its spot price has changed from USD425 per ounce in June 2005 to USD2000 in June 2020 to USD2900 in January 2025; and that spot price can change during the course of a single day’s trading.

Mackay explains that the spot price for a precious metal is the current market price for that precious metal traded in the wholesale market for immediate delivery. “Spot prices are price quotations for trading large standard quantities of a precious metal in the wholesale market, not individual bullion bars or coins like the Krugerrand,” he says. “The spot price is usually quoted in US dollars per troy ounce and refers to a quotation for a standard, but large quantity. The spot price is also known as the international ‘paper price’.”

Physical gold bars and coins are priced using the spot price as a benchmark, either trading above or below the spot price, depending on the supply and demand at the time of that particular bar or coin. Most of the time, because of fabrication costs, physical gold will trade at a premium to the paper gold price (spot). Because precious metals are traded 24 hours a day around the world during the week, there will always be a live and changing spot price that feeds in from around the world wherever trading activity is live.

What’s your investment worth?

While gold itself has a universal spot price, (the current market value for pure gold), the price you pay for a Krugerrand is calculated differently.

The journey of a Krugerrand’s price starts with the spot bullion price of gold – this is the basic raw material cost at the refinery. You then add fabrication costs for minting the actual coins, handling and logistics costs and distribution expenses to get the coins to market, and finally broker/dealer margins for businesses that sell the coins to consumers. That’s why Krugerrands always cost more than the equivalent weight in pure gold at the prevailing spot price.

The good news? For this launch on Mesh, TroyGold has negotiated a special discount off the normal retail market price for bullion Krugerrands. This discount will apply to the prevailing retail price on the final settlement date (March 27, 2025). So on Mesh, you’re getting real gold Krugerrands at better-than-standard retail pricing!

When the subscription period closes, a two-year Storage and Insurance fee, at 1.2% of the committed token value, for either the fraction of a coin or for the whole Krugerrand coin(s) you have bought, will be added to the price. “This fee covers the cost of vaulting and insurance for the physical coins, which will be stored by the world-class, secure gold vaulting company Brink’s,” says Mackay.

At settlement time, a calculation will be done converting the mZAR amount that investors subscribed for, into the corresponding amount of tokens representing the grammage of physical gold, at the prevailing TroyGold discounted price on the date of issuance, less the Storage and Insurance fee.

Real gold in a digital world

It bears repeating that each token represents real gold, that you can touch and feel. And because all TroyGold’s customers’ gold holdings are fully allocated, it means you are buying either a whole or a fraction of an actual gold bullion KrugerRand that is securely stored, fully insured and independently audited in a high-security precious metals vault.

“When I’m buying a token, I’m actually buying a contract,” says Bloem. “I’m buying the legal right to ownership of the gold that I’ve purchased, and I’m also buying the right to redeem it.”

The complexity around the TroyGold Krugerrand (TGLD) token’s pricing is a direct result of the fact that each token represents real, physical gold. And while some investors might still be unsure about investing in a digital world, characterised by the blockchain, stablecoins and digital tokens, this asset is a timely reminder that what you’re investing in is real and tangible.

• Register as a Mesh.trade investor, and join the waiting list for the TroyGold Krugerrand (TGLD) token.