Exactly.

They don't have a large treasury of gold today. They receive a certain amount of gold from the exporters (the licit exporters,.. which are a minority of the gold producers in the country), but whether they will keep much of that is doubtful (as that gold they receive is what is sold to fund the government's spending. So while this token may have "backing" in gold, I very much doubt it will be full reserve.

Instead, this token is just that ... a representative token, i.e., it represents something instead of being the something itself. Just like stablecoins, where the value will hold only so far as you can trust the issuer. Same with NFTs.

This won't end well. The upside of holding the token is limited to gold's upside, and the downside is that it ends up being worth ~0. So there is essentially no reason to hold this token.

The article says this token will be "legal tender", and if that in fact occurs -- where this token is used for customer payments to merchants, or even person-to-person payments (like how mobile money can be used) then this could be something useful as an on-ramp into (and off-ramp from) bitcoin.

This token would need to be not easily reversible -- so knowing the details, which were not mentioned in the article, will need to occur before this token being beneficial to bitcoin can be ascertained.