The World Gold Council (WGC), in partnership with Linklaters LLP and Hilltop Walk Consulting, has introduced a groundbreaking concept designed to transform the global gold market: Wholesale Digital Gold (WDG). This initiative aims to modernise how gold is owned, traded, and utilised—bridging the gap between traditional allocated and unallocated gold settlement structures.
Bridging the Gap in Gold Settlement
In today’s wholesale market, trades are typically settled in two ways:
- Allocated gold provides direct ownership of specific physical bars, but is operationally complex and limited to whole-bar holdings.
- Unallocated gold offers greater liquidity and lower costs but carries the credit risk of the institution where the account is held.
WDG proposes a third model—Pooled Gold Interests (PGIs)—combining the advantages of both. Under PGIs, investors gain fractional ownership in a pool of vaulted gold bars, unlocking new benefits such as:
- Broader and simplified use of gold, including as collateral.
- Secure and efficient transfer of gold interests between parties.
- Accessibility for small, fractional investments.
Mike Oswin, Global Head of Market Structure and Innovation, World Gold Council, said:
“Wholesale Digital Gold is a vision to transform the way gold is owned and traded. The UK Government’s recent publication on Financial Markets Digital Strategy highlights the importance of digitalising wholesale markets to drive efficiency, resilience, and innovation—an ambition that closely aligns with our own.”
The press release further noted:
“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. Introducing a robust legal structure and innovative technology for gold ownership and settlement, will only reinforce London’s role in the global gold market.”
A Legal Foundation for Innovation
To support this transformation, Linklaters has developed a new legal framework underpinning the issuance and transfer of digital interests in vaulted gold. This ensures beneficial ownership of the underlying metal, transparency, and regulatory compliance.
Richard Hay, Partner and UK Head of Fintech at Linklaters, commented:
“We are proud to support the World Gold Council and the broader industry in articulating their exciting vision for a digital gold market through the development of a new legal structure to support that vision. This structure provides legal certainty and supports operational flexibility essential for innovation in precious metals trading. 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.”
Michael Voisin at Linklaters added:
“We were delighted to build upon our track record of delivering innovation in the financial markets through the design of a novel legal infrastructure supporting the vision for Wholesale Digital Gold. The vision and underpinning legal solution are also closely aligned with UK Government’s recently announced Wholesale Financial Markets Digital Strategy.”
A Next-Generation Gold Market
The Wholesale Digital Gold ecosystem is designed to be technology-neutral, compatible with initiatives like the WGC and LBMA’s Gold Bar Integrity Programme, while optimising for capital efficiency and regulatory compliance.
Key Takeaways
- Next-Generation Model: WDG is designed to transform the way gold is owned and traded globally.
- Bridging Settlement Structures: PGIs bring together the strengths of allocated and unallocated gold, providing fractional ownership, ease of transfer, and reduced credit risk.
- Shared Ownership: Core participants will co-own vaulted gold bars, issuing PGIs that correspond to specific quantities of physical gold.
- Robust Legal Framework: A new structure, developed by Linklaters LLP, underpins the WDG ecosystem, ensuring legal certainty and operational flexibility.
- Policy Alignment: The UK Government’s Financial Markets Digital Strategy supports digitalisation of wholesale markets—an ambition that aligns directly with WDG’s vision of driving efficiency, resilience, and innovation.
The WGC is now inviting market participants, regulators, and technology providers to engage with this initiative and help shape the future of gold trading.
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Disclaimer:
The information provided in this article is for informational purposes only and reflects the views of industry experts. Before making any investment decisions, it is recommended that you consult a financial advisor. The team at Gold Price Today does not engage in personal buying, selling, or trading of gold or silver on exchanges. We are not responsible for any gains or losses incurred based on the information presented here.
