- WGC proposes Wholesale Digital Gold ecosystem overhaul.
- Aiming to modernize gold ownership and trading.
- Emphasis on liquidity and legal robustness.
The World Gold Council has introduced a proposal for a Wholesale Digital Gold ecosystem aimed at modernizing gold trading and ownership, establishing a Pooled Gold Interests (PGI) instrument in the global market.
This initiative could transform gold as a financial asset, impacting gold-backed digital tokens while enhancing market liquidity and compliance in the UK, EU, and US territories.
The World Gold Council (WGC) has introduced a proposal for the Wholesale Digital Gold ecosystem. This initiative aims to modernize gold ownership and trading mechanisms. The project seeks to enhance legal structures and leverage technology neutrality.
Key players in this initiative include the WGC, legal firm Linklaters, and Hilltop Walk Consulting. The WGC’s Mike Oswin emphasizes that this approach could transform the way gold is owned and traded, reinforcing London’s global gold market role.
The immediate effects focus on introducing a robust legal framework that may boost the global gold market’s efficiency. This proposal could impact gold-backed digital assets and increase liquidity within gold markets.
The WGC’s proposal stresses potential financial shifts by integrating a modernized market structure. This may make gold-backed tokens more attractive for collateral purposes, influencing related DeFi protocols and asset liquidity.
The historical precedent of tokenized gold, such as PAXG and XAUt, provides context for possible impacts on institutional DeFi platforms. Enhanced regulations in the UK, EU, and US are anticipated outcomes.
Potential financial and regulatory outcomes could include increased Total Value Locked (TVL) in related digital assets. This could catalyze liquidity adjustments in tokenized commodities, potentially aligning with historical trends of influence on trading volumes.
Wholesale Digital Gold is a vision to transform the way gold is owned and traded… Introducing a robust legal structure and innovative technology for gold ownership and settlement, will only reinforce London’s role in the global gold market. – Mike Oswin, Global Head of Market Structure and Innovation, World Gold Council
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