London’s bullion market set to trial digital gold
London’s physical gold market is on the verge of a major shake up, as the World Gold Council seeks to launch a digital form of the precious metal.
The move would transform the capital’s $900bn (£672bn) market, creating the ability to trade, settle, and collateralise bullion digitally around the gold ecosystem for the first time.
While many investors value gold because of its physical nature, seeing it as a safe haven asset, David Tait, chief executive of the World Gold Council, argues that bullion must be digitised in order to broaden its market reach.
Tait told the Financial Times: “We are trying to standardise that digital layer of gold, such that the various financial products used in other markets can be used in the gold market going forward.”
“My goal is that many asset managers around the world will suddenly look at it differently.”
The end of a static asset?
Gold hit a record high price this week, hovering at $3,530 per ounce in early morning trading, and has doubled in value over the past three years, amid ongoing economic uncertainty and geopolitical tensions.
Despite these gains, most banks and other investors view the precious metal as a static, non-yielding asset. Tait argues digitised gold, on the other hand, could be put to profitable use.
He said, “For the banks, from a collateral perspective, they will make a lot of money, as they get an opportunity to use the gold on their balance sheet as collateral.”
The new digital unit, dubbed ‘pooled gold interests’ (PGIs) would allow banks and investors to buy and sell partial ownership in physical gold held in separate accounts.
It will be trialled with commercial participants in London during the first financial quarter of 2026.
The framework for the system will be built on a small number of participants, including major banks and trading houses, co-owning the underlying gold in a trust structure.
Battle to beat crypto
The move is the latest step in a multiyear project by the World Gold Council to digitise the gold market, following the January launch of a blockchain database for refineries and gold bars.
Despite its soaring price, industry figures believe the asset is in danger of being eclipsed by new rivals, including cryptocurrencies and stablecoins.
However, some market participants say the efforts could face resistance, questioning if the London market would adopt it, as the capital remains dominated by a risk-averse customer base.
Adrian Ash, director of research at gold trading platform BullionVault said, “Gold is already the best performing asset class.”
“This feels like a solution in search of a problem.”