The World Gold Council (WGC) has announced the launch of a pilot project for digital gold, which will allow bars to be used as a financial instrument for settlements and collateral in the Loco London market, with a turnover of $900 billion. Testing of the new approach is expected to begin in London in the first quarter of 2026, involving major banks and traders.
This is reported by Finway
New PGI Tool: Opportunities for Banks and Investors
A key element of the initiative will be the PGI (pooled gold interests) tool, which will enable banks and investors to buy and sell fractional shares of physical gold stored in segregated accounts. WGC CEO David Tait emphasized that the digitization of bars opens new opportunities for using gold on the balance sheets of financial institutions, covering margin requirements, and increasing profits.
The project structure involves shared ownership of the underlying gold among a group of key participants. Leading global banks and trading houses will join the testing, as reported by project consultant Allan Guild.
From Blockchain Identification to Digital Liquidity
The PGI pilot is a continuation of WGC’s multi-year strategy for the digitization of the precious metals market. In particular, in January 2025, a blockchain platform called Gold Bar Integrity was launched in collaboration with the London Bullion Market Association (LBMA) to track the provenance of bars and enhance industry transparency.
However, not all experts are confident in London’s readiness for such changes.
“Gold already serves as a reliable asset and does not require new formats,” says BullionVault’s research director Adrian Ash.
Despite this, WGC expects that the digital PGI model will attract institutional investors and spur the emergence of new types of transactions alongside traditional allocated and unallocated contracts. The organization believes that the new format will enhance market liquidity and operational efficiency, as well as allow competition with cryptocurrencies and gold-backed stablecoins.
WGC CEO David Tait notes that the implementation of digital bars will contribute to the formation of a unified standard for the use of gold in the financial system of the future.