THE World Gold Council said on Thursday it plans to build a digital platform aimed at improving trade in gold.
The initiative, which is in cooperation with the Boston Consulting Group, will improve the way gold is traded by connecting the physical custody of the metal with a digital trading system.
In standardising tradig processes such as reconciliation, compliance and redemption, barriers to entry in gold trade will be lowered, the council said.
Improving trading access to gold has been the mission of David Tait, CEO of the World Gold Council since 2021. “I can’t put a timeline on it, but I would anticipate seeing real change between three to five years from now. I really would,” said Tait of his plans for gold in 2023.
Tait has described gold as ‘capital heavy’ whereas the currency market is ‘capital light’. In layman’s language, trading gold comes with too much baggage for the large banks which represent a massive, untapped market for bullion.
“If you think of that and you imagine solving for that problem which is our objective, we are trying to encourage all asset managers to think of gold in a 5% or 10% bucket of any portfolio,” says Tait. “That’s what my goal is,” he said previously.
Current trading routes – including blockchain tokenisation, mining equity ETFs and fractional ownership platforms – have been criticised for fragmentation and slow execution. The digital platform planned by the council is designed to improve fungibility and enable digital gold to function as a single asset with consistent value and legal rights.
The platform also envisages broader utility for the metal, including its use as collateral for borrowing. This would extend gold’s role beyond its traditional function as a store of value and portfolio diversifier, the council said.
