Timeline

What happened: The World Gold Council formally proposed the creation of 'Pooled Gold Interests' (PGIs) to digitize gold ownership and trading.
What's happening now: Preparations are underway for the pilot program, engaging commercial institutions in London.
What's next: The pilot program is scheduled for the first quarter of 2026 in London. Successful implementation could lead to a global rollout and further regulatory developments.

Different Perspectives

WGC's Vision: CEO David Tait and Global Market Structure & Innovation Head Mike Oswin emphasize digitizing gold to expand its market reach, positioning it alongside digital-native bonds and cash for collateral purposes. They aim to unlock 'sleeping' assets and enhance liquidity.
Skeptical Traditionalists: Russ Mould, Investment Director at AJ Bell, views gold's core appeal as its physical reality, a hedge against financial complexity. He warns digitization might reintroduce these risks. Adrian Ash of BullionVault labels it a 'solution looking for a problem,' highlighting the conservative nature of the gold market.
Market Reaction: The market remains divided, with a cautious approach reflecting the industry's risk-averse participants.

What You Need to Know

PGIs are digital tokens representing fractional legal ownership of physical gold in London vaults.
The goal is to make pledging gold as collateral as simple as pledging bonds.
It targets the multi-trillion-dollar global collateral market.
This creates a 'third pillar' for gold trading in London, alongside allocated and unallocated forms.
A pilot program involving major London financial institutions is slated for Q1 2026.

Regional Perspective

London, already the world's largest physical gold trading hub, is poised to reinforce its global leadership through this initiative. The pilot program, specifically targeting commercial institutions in London, aligns with the UK's broader strategy to digitize its financial markets. This offers London-based banks and trading houses a unique, time-sensitive opportunity to be at the forefront of a global financial transformation, potentially setting new standards for commodity trading and collateral management worldwide.

Why This Matters

This initiative could unlock billions in 'sleeping' gold assets, transforming them into dynamic, income-generating collateral.
It modernizes a centuries-old market, addressing the competitive threat from cryptocurrencies and stablecoins.
The success of PGIs could establish a new global standard for how physical commodities are tokenized and utilized in the financial system.
It offers financial institutions a novel way to manage risk and generate revenue from their gold holdings.