The World Gold Council (WGC) is preparing to revolutionize the precious metals market with a new pilot program that introduces digital gold trading on the London bullion market. According to a recent report by the Financial Times, this initiative aims to transform how gold is used in settlements and as collateral, making it a more dynamic financial instrument for both banks and institutional investors.
The pilot will launch in the first quarter of 2026 within the $900 billion Loco London market, one of the world’s most influential hubs for gold trading. At the center of this project is the new instrument known as PGI (pooled gold interests), which allows participants to buy and sell fractional shares of physical gold bars stored on segregated accounts. This model is designed to enhance liquidity and provide a flexible way for investors to leverage gold beyond traditional allocation methods.
David Tait, CEO of the WGC, explained that the digitalization of gold bars will enable banks to place the metal on their balance sheets more effectively, covering margin requirements and unlocking additional revenue opportunities. By shifting from static holdings to digitally tradable units, institutions can extract greater financial value from their reserves.
The PGI structure is built around joint ownership of physical gold, with participation expected from major banks and trading houses. Allan Gild, a project consultant, confirmed that leading institutions have already expressed interest in testing the system.
This digital gold project follows the WGC’s broader strategy to modernize the gold market. In early 2025, the Council, together with the London Bullion Market Association (LBMA), launched the Gold Bar Integrity blockchain database, which tracks the origin of gold bars to enhance transparency and ensure ethical sourcing.
While the initiative has generated excitement, some industry experts remain cautious. Adrian Ash, Director of Research at BullionVault, argued that gold is already a trusted safe-haven asset and does not necessarily require new digital layers. Nonetheless, WGC believes that digitalization will attract institutional investors who are looking for more versatile instruments and easier settlement options.
The council expects PGI to create a new class of transactions alongside existing allocated and unallocated contracts. With much of the world’s gold reserves remaining largely passive, WGC hopes that this shift will unlock liquidity, improve market efficiency, and provide competition to gold-backed stablecoins and cryptocurrencies.
Tait emphasized that digital gold bars could pave the way for a unified market standard, positioning gold as a forward-looking financial tool rather than just a static store of value.
Conclusion:
The pilot launch of digital gold trading in London signals a pivotal step toward the modernization of the global bullion market. If successful, PGI could reshape gold’s role in financial systems, enhance liquidity, and bridge the gap between traditional assets and blockchain-powered innovation.
