The gold market is beginning to enter the digital era, and the World Gold Council (WGC) wants to accelerate the shift.
On Wednesday, the organization unveiled Wholesale Digital Gold, a new initiative that aims to modernize how investors own, trade, and settle physical bullion.
The project builds on a white paper recently published by the WGC. The paper examines weaknesses in the settlement process that dominate the over-the-counter gold market. Currently, the global industry relies on two structures: allocated gold and unallocated gold.
Allocated gold offers direct ownership of specific bars. This process provides security and reduces counterparty risk because investors hold legal title to the bullion. Custodian banks have no claim on the allocated bars.
Meanwhile, unallocated gold works differently. It gives the holder a credit claim against an institution. No specific bullion backs the account. Instead, the holder owns a contractual right to a defined amount of gold.
Unallocated accounts remain popular because of their flexibility. They provide access to deeper markets and rapid settlement. However, investors must also assume credit risk tied to the institution managing the account.
The WGC now wants to introduce a third option. Wholesale Digital Gold will feature Pooled Gold Interests (PGIs). These interests blend the benefits of allocated bullion with the efficiency of digital markets.
Through PGIs, investors will share ownership of pooled gold bars held in vaults. They will also gain access to fractional ownership, allowing smaller positions. In addition, PGIs will make bullion usable as collateral, broadening its role in finance.
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Legal certainty cornerstone of WGC plan
The initiative also reinforces London’s dominance in global gold trading. The Loco London market clears about 20 million ounces daily. This liquidity makes the UK a natural testing ground for settlement reform.
“As the world’s leading gold trading hub, with the Loco London market clearing an average of 20 million ounces daily, the UK is well positioned to lead the way in improving the way gold is traded and cleared to the benefit of all market participants,” said Mike Oswin, Global Head of Market Structure and Innovation at the WGC.
Legal certainty forms the cornerstone of the WGC plan. The organization has also partnered with Linklaters, a global law firm, to design a framework for PGIs. This framework further governs issuance, transfer, and ownership rights of the pooled bullion.
“This structure provides legal certainty and supports operational flexibility essential for innovation in precious metals trading,” said Richard Hay, Partner and UK Head of Fintech at Linklaters.
“By enabling secure, transparent, and efficient digital ownership of fractional interest in gold, we are helping to unlock new opportunities for market participants and reinforcing London’s leadership as the world’s preeminent gold trading hub.”
The partnership demonstrates how law and technology must align for innovation to succeed. Investors need clear rules of ownership. At the same time, digital tools must deliver efficiency and transparency. Wholesale Digital Gold seeks to combine both.
The World Gold Council believes this model will reduce friction in gold settlement. It will also allow new entrants, including smaller investors, to participate. Fractional ownership lowers barriers and creates liquidity beyond traditional unallocated accounts.
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Traditional stores of value are merging with digital finance
Gold’s slow pace in adopting digital tools contrasts with other commodities and asset classes. However, momentum is now building. Tokenization, blockchain integration, and fractional models have also begun to capture serious interest.
In July, BioSig Technologies, Inc. (NASDAQ: BSGM) announced financing of up to USD$1.1 billion for a tokenized gold asset. The company aims to build a blockchain-based platform that competes directly with conventional settlement systems.
Furthermore, the race displays a broader trend. Traditional stores of value are merging with digital finance. Gold, long viewed as a hedge and reserve, now has a chance to expand its utility.
Wholesale Digital Gold represents the WGC’s attempt to shape this evolution. The program also combines trust in physical bullion with innovations in digital settlement. If adopted, it could redefine how gold functions in modern finance.
The WGC has positioned the initiative as both a safeguard and a growth tool. By merging established trust in gold with digital flexibility, it hopes to bridge the old and new financial worlds.
In addition, the Wholesale Digital Gold initiative could produce both positive and disruptive effects across the gold industry.
For producers like NevGold Corp (CVE: NAU) (OTCMKTS: NAUFF) (FRA: 5E50), fractional ownership and pooled gold structures may attract a broader pool of investors, boosting liquidity and supporting stronger prices.
Furthermore, higher demand and smoother digital settlement can improve project economics, while the ability to use digital gold as collateral may enhance access to financing and long-term growth opportunities.
However, other industry participants may face challenges.
Refiners, custodians, and smaller vault operators could see reduced margins as pooled structures streamline settlement and bypass traditional intermediaries.
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