Could be sidelined by stablecoins…Gold Council pushes 'digital gold'

Physical gold ownership may be tradable

A plan is being pursued to convert gold, a representative safe-haven asset, into a digital asset. As the institutional integration of virtual assets such as stablecoins accelerates, measures are being devised to use 'digital gold' as collateral or a means of payment to counter this.

On the 5th, the Financial Times (FT) reported that the World Gold Council (WGC) is pursuing a plan to launch gold in digital form. The WGC's position is that conversion to a digital asset is essential to increase gold trading volume and market accessibility. David Tate, WGC chairman, said, "We plan to standardize gold in digital form," and added, "a variety of financial products previously used could be used in the gold market going forward." If gold establishes itself as a digital asset, it could be used as a kind of margin call (additional margin requirement) or as collateral.

He proposed the concept of a 'shared gold interest' as the unit of the new digital gold. It would be a method in which banks or investors can buy and sell ownership of physical gold deposited in accounts. The WGC plans to begin pilot trading on the London Stock Exchange as early as the first quarter of next year. However, it is uncertain whether the conservative gold market will accept new challenges such as 'digital gold.' Stablecoins backed by gold have been attempted several times but mostly failed.

Reporter Jang Hyun-ju blacksea@hankyung.com