World Gold Council Unveils Plan for “Digital Gold”

Wed Oct 01 2025

 

The World Gold Council (WGC) has introduced a plan that will allow physical gold to be traded in a digital format.  Joseph Cavatoni, market strategist for the group, tells JCK that even though the price of gold is hitting record highs, there’s a need for a construct that would make gold trading more liquid.

 

“The gold market is a physical market,” Cavatoni says. “The physical side of it is something that you can’t do without. Even in the world of financial products and financial instruments like exchange-traded funds, they are heavily reliant on the physical market to actually function properly.” He notes that companies have long tried to create digital gold tokens, but the market hasn’t accepted them.

 

“The tokens aren’t fixing any issues, challenging any problems, or coming up with anything that’s actually meaningful in terms of a change to the market,” Cavatoni says. “We’re looking at a fundamental change to the gold market that will make it much more amenable to digitization in the future.”

 

The WGC’s solution, which it has dubbed “wholesale digital gold,” involves a new structure called a pooled gold interest that would let groups of financial institutions sell partial stakes in jointly owned stocks of physical gold.

 

“It will be a collective of participants that will have a collection of gold in a pool and they will basically govern it,” Cavatoni explains. “Those that want to buy into that pool can take ownership of it. That will let you buy dollar amounts that may not necessarily correspond with the units of gold bars. So if you want to buy $5 or $5 million in gold, you can do that through this pooled gold interest.”

 

And while the yellow metal has had a spectacular year so far, Cavatoni says the new structure is meant to lead to “a better market than we have today.

 

“About $200 billion in gold trades a day,” he says. “That’s a very healthy market. But one key element of gold is that it doesn’t qualify under current bank standards as a high-quality liquid asset. So it gets a punitive treatment on bank balance sheets.

 

“We think what this will do is it will bring more participation in the market, and it will potentially lead, over time, to gold’s qualification being changed to a high-quality liquid asset, by allowing trading institutions to use gold as a form of collateral for the purposes of trading equities. Right now, that’s not an option.”

 

The World Gold Council is talking to financial institutions about participating in a pilot, which it would like to start later this year. Cavatoni stresses that the pilot is aimed at the wholesale market and that the digital gold initiative is still in its “early days,” but the WGC hopes to announce further steps next year.

 

Source: https://www.jckonline.com/