A new form of ‘digital gold’ is set to be launched in London, which experts believe could transform trading practices and collateral usage.
World Gold Council Plans
The World Gold Council plans to digitize gold through an initiative called 'Pooled Gold Interest' (PGI). This project is set to be trialed in the first quarter of 2026. The council's CEO, David Tait, emphasized the goal of transforming London's $900 billion physical precious metals market into a digital form, allowing traders to exchange gold digitally.
Digital Gold in the Crypto Sphere
The digitization of traditional physical assets is not a new phenomenon. Some crypto firms have tried to create digital assets pegged to gold reserves, but only a few have achieved commercial success. Studies indicate that out of 66 active stablecoin projects, 24 have already shut down, many of which were backed by gold reserves.
Distinctions of the New Approach from Existing Tokens
The World Gold Council's initiative distinguishes itself from existing tokens by allowing gold ownership through over-the-counter (OTC) trading in London, including participation from major banks and trading houses as co-owners of the underlying gold. Tait also noted that changing the perception of gold as a static asset should alter asset managers' approach to this traditional precious metal.
The initiative to launch digital gold in London could significantly change the precious metals market, offering new mechanisms for trading and leveraging gold as collateral.
