Traditionally, gold has been seen as a safe-haven asset but not a source of regular income. Digitalisation could change that, a recent paper from the World Gold Council (WGC) shows.

The WGC, in collaboration with futures consultancy The Future Laboratory, has released a report titled 'A New Golden Age', exploring how digitalisation could redefine gold's role in global finance and culture.

At the heart of this transformation is the WGC's belief that“digitalisation of the gold industry is critical to ensuring that gold continues to be a timeless and trusted asset now and in the future,” as stated by David Tait, CEO of the World Gold Council. The report outlines a future where gold is not just a physical commodity but a dynamic digital asset, accessible, traceable, and yield-bearing.

The WGC's Gold247 programme is already laying the groundwork for this future. Its Gold Bar Integrity (GBI) initiative creates an international database of gold bar custody and provenance, ensuring that gold is mined, refined, and traded within a“trusted ecosystem.” This is complemented by the Wholesale Digital Gold framework, which aims to establish a legally robust and technologically neutral system for gold ownership and settlement.

Perhaps the most ambitious innovation is the Standard Gold Unit (SGU) a global digital standard that decouples the monetary value of gold from its physical form.“The SGU could represent another essential step in the development of a truly digitalised gold industry,” the report notes, allowing gold to be mobilised across financial markets with unprecedented flexibility.

Frictionless Finance and Instant Collateral

Digitalisation promises to make gold more fungible and mobile. Navin Dsouza, COO of Digital Assets and Gold at Equiti Group, envisions a future where“at the press of a button, [you can] liquidate the whole gold holdings.” This frictionless model could revolutionise commodities trading, enabling atomic settlement and instant location swaps.

Peter Grosskopf, Chairman of Argo Digital Gold, adds,“The increased efficiencies that digitalisation could bring-the ease of settlement, the elimination of the need to move physical [gold]-will be very important.”

Yield-bearing gold in DeFi ecosystems

While gold has a long-term proven track record of increasing in value, and thus producing returns over time, one of the drawbacks cited by institutional and retail investors is that it doesn't, traditionally, produce a regular income.

Indeed, more than half (54 per cent) of financial advisers told the World Gold Council that the fact that gold does not pay coupons or dividends is a barrier to investment. Digitalisation and the advent of tokenised gold in DeFi ecosystems could create opportunities to flip this paradigm and create digital gold products that promise regular yields.

Two in five UK (41 per cent) and US (40 per cent) retail investors agreed that the ability to earn interest on a gold token would make the investment more attractive or valuable (source: World Gold Council Gold Token Research in the US and UK).

Melissa Song, Chief Executive Officer of Bity, points out:“Very importantly, investors need to understand when it comes to yield generating, there's no free money. When you have a yield, you'll have a certain risk. So, it's about managing the risk.”

If the potential 'what if...' scenario posed by the DeFi Gold Rush is realised, investors could be able to hold yield-bearing gold that matches their personal risk profile as part of their mixed portfolios. Financial advisors and asset managers may also be able to recommend and benefit from transparent gold-backed products that pay a regular coupon, while traditional financial (TradFi) institutions could have the opportunity to create yield via crypto protocols like staking and liquidity provision. The potential to invest in fractionalised gold tokens in DeFi gold funds could also unlock greater accessibility to gold for retail investors around the world.

Democratising access and broadening appeal

Digital gold also promises to democratise access. Fractional ownership models could allow retail investors to buy small amounts of gold, making it more inclusive. Robin Lee, former CEO of HelloGold, believes“fractionalisation of gold will happen because there will be fractionalisation of securities.”

This shift is particularly relevant as the Great Wealth Transfer unfolds. In the US alone, $105 trillion is expected to pass to younger generations over the next two decades. These tech-savvy investors are looking for alternative assets, and digital gold could be a compelling option.

Cultural relevance and phygital innovation

Beyond finance, digitalisation could embed gold into lifestyle and culture. Phygital gold NFTs - collectables with both physical and virtual utility - are one such innovation.“We even thought about partnering with top artists to make a gold bar blended with cool digital art,” says Song.

Popular brands and super apps could also play a role in making gold more accessible.“If I'm buying it on Revolut, I trust Revolut. Or if I am buying it on Apple, I trust Apple,” Dsouza notes, highlighting the importance of trusted distribution channels.

Challenges and the road ahead

Despite the promise, challenges remain. Regulatory clarity is essential. Katherine Kirkpatrick Bos, General Counsel of StarkWare, points out,“Once you have legislation, that will be the last barrier removed.” The WGC's Wholesale Digital Gold concept and SGU framework are steps toward creating the legal and technological infrastructure needed.

As the lines between physical and digital continue to blur, gold stands poised to enter a new golden age-one defined not by vaults and bullion, but by blockchain, smart contracts, and global accessibility.

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