On Representation, Finality, and Gold in a Tokenised World
I. Introduction — The Question Beneath the Technology
In discussions about tokenisation, much attention is paid to speed, efficiency, and innovation. Yet beneath the technology lies a quieter, more fundamental question—one that predates blockchains, banks, and even paper money:
When is something merely a representation, and when is it the thing itself?
This distinction matters because it determines whether loss can be repaired, whether mistakes can be corrected, and whether value can be restored once destroyed. Technology may change how value moves, but it does not change the nature of finality. That remains a legal, social, and moral choice.
II. Representation and Replaceability
A share certificate represents ownership in a company. If the certificate is destroyed—lost in a fire, misplaced, or damaged—the ownership does not vanish. The register remains. The certificate is symbolic, not constitutive.
Paper currency is different. A banknote is not a symbol of money; it is money. If it is burned, it is gone. There is no registry to appeal to, no replacement process, no reconstruction of ownership. Ashes do not entitle one to restitution.
This distinction is not technological. It is ontological.
Some instruments are representational and therefore replaceable.
Others are final and therefore extinguishable.
Understanding which category an instrument belongs to determines how society treats loss, error, and responsibility.
III. Clearing and Settlement: A Forgotten Distinction
Modern finance carefully separates clearing from settlement.
Clearing answers the question: Who owes what to whom?
Settlement answers the question: Has value irrevocably changed hands?
Many modern systems move information rapidly while deferring finality. Registries, custodians, and courts exist precisely to allow disputes to be resolved before settlement is treated as complete.
Tokenised systems often collapse these layers. A transfer can simultaneously clear and settle, leaving no space for reversal, interpretation, or mercy. Speed creates the illusion of certainty—but certainty is not the same as finality.
Finality is a social decision.
IV. Gold Tokens: Receipt or Bearer?
Gold tokenisation exposes this distinction clearly.
If a gold token functions as a receipt:
- The token facilitates clearing.
- The gold in custody remains the settlement layer.
- Redemption is the moment of finality.
- Loss of a token may be rectified through registry, verification, or legal process.
In this model, technology improves logistics without altering the moral structure of ownership.
If a gold token functions as a bearer instrument:
- The token itself is settlement.
- Possession equals ownership.
- Loss equals extinction.
- No registry can restore what has vanished.
This model may be efficient—but it is unforgiving.
The difference is not technical.
It is philosophical and legal.
V. Why Registries Exist at All
Historically, bearer instruments came first. Registries emerged later—not to complicate systems, but to humanise them.
Registries exist because:
- People lose things
- People die
- People are deceived
- Circumstances change
A registry allows society to say: “We recognise that possession alone should not always determine justice.”
When tokenisation removes registries by design, the question is not whether it is innovative, but whether it is intentional.
Are we returning to bearer systems deliberately—or accidentally?
VI. Gold as Memory, Not Yield
Gold produces no yield. It issues no dividends. It relies on no balance sheet.
Yet it persists.
Gold’s value lies not in productivity, but in memory—collective, cultural, and intergenerational. It compresses trust across time. This is why households, not just institutions, continue to hold it.
Tokenisation does not make gold better.
It makes gold move.
When framed this way, gold tokens are not a rebellion against monetary order, but a logistical evolution layered atop a very old understanding of value.
VII. Risk Does Not Disappear — It Migrates
Tokenisation does not eliminate risk. It reallocates it.
- From institutions to individuals
- From custody to key management
- From courts to protocols
- From discretion to determinism
This is neither inherently good nor bad. But it must be understood.
When finality is automated, responsibility becomes absolute.
VIII. Finality Is a Design Choice
Irreversibility is powerful—but it is also merciless.
A system that cannot forgive cannot distinguish theft from mistake, coercion from consent, or error from intent. Efficiency should not be mistaken for wisdom.
In every monetary system, society decides:
- What may be undone
- What must be final
- And who bears the cost of loss
Tokenisation does not escape these choices. It merely exposes them.
The question, then, is not whether gold should be tokenised—but how much finality we are willing to encode into value itself.
Important Notice.
This article was inspired by our small involvement in an RWA tokenization project. This article should not be considered as legal advice; nor is it financial advice. Please consult with a trained legal professional before you make any decision.
Thanks for reading.