Q: What does proof of reserves actually prove?
Proof of reserves shows that a custodian holds enough physical gold to match issued tokens. It answers: “Is there gold backing this token?”

Q: What doesn’t it prove?
It rarely answers: “Was this gold responsibly mined?” Standards like the London Bullion Market Association (LBMA) Responsible Gold Guidance promote due diligence, but they rely heavily on documentation and periodic audits — not continuous, machine-verifiable origin tracking. Tokenization often inherits those same blind spots.