Gold247™

Gold generates long-term returns, improves diversification and enhances liquidity. But investment potential is constrained because the gold market operates in a different way from other major asset classes.

The way gold is traded and the way the supply chain is managed, needs to continue to evolve to ensure the gold market continues to meet the expectations of end-users, the financial services community, and regulators.

Gold247 is the World Gold Council’s vision to support the digital transformation of the global gold market. This programme of work has three key pillars: Gold Bar Integrity, Wholesale Digital Gold and the Standard Gold Unit. These initiatives work together to digitalise the gold supply chain and the gold market’s infrastructure to help develop a pathway to the creation of digital gold assets. Gold247 aims to ultimately increase transparency, improve market infrastructure and enhance the way gold is traded and utilised, to the benefit of all industry participants.

Gold Bar Integrity (GBI):

The essential foundation for gold market reform and digitalisation is supply chain integrity. That is why the World Gold Council partnered with the LBMA to develop and implement an international system of gold bar integrity, launching a successful, pan-industry pilot programme that has continued to develop ever since.

GBI uses distributed ledger technology to create a secure, global database of gold bars. This robust tool will, over time, provide increased confidence that gold bars in this trusted ecosystem have been responsibly mined, refined and traded.

As the programme continues to gain momentum, we hope more and more industry participants across the entire gold supply chain will be encouraged to join this database. Tracking gold bars throughout the supply chain will ensure responsible gold sourcing and product integrity which will improve trust in the asset class.

 Watch our video to learn more about the importance of the GBI programme: 

Watch our episode of Unearthed about how the Royal Canadian Mint is using distributed ledger technology and the benefits it can bring to the gold industry:

Wholesale Digital Gold

The potential of representing physical gold in a digitalised format will unlock new opportunities for the market, including increased liquidity and enabling the use of gold as collateral. In order to achieve this, the gold market needs structural reform to allow digital products to operate independently of specific custodians, while still offering ownership of underlying physical gold.

The Wholesale Digital Gold concept could enhance how gold is owned, traded, and utilised by bridging the gap between the two ways gold is currently settled in the wholesale market – allocated and unallocated gold.

A new, third structure, called Pooled Gold Interests (PGI) combines the best of both worlds by providing physical ownership, just like allocated gold, but with new benefits to investors including:

• Broader and simplified use of gold, including as collateral.
• Ownership of an interest in a pool of vaulted gold bars – even in small, fractional amounts.
• Easy and secure transfer of gold interests between parties.

To support this innovative concept, a new legal framework has been developed by Linklaters. This framework underpins the issuance and transfer of interests in a pool of vaulted gold bars, ensuring beneficial ownership of the physical gold held in custody.

Read more about the Wholesale Digital Gold concept and supportive legal framework in our joint white paper with Linklaters.

Standard Gold Unit™

Gold markets today interact with each other, but they all have different features. Bar sizes are different; grades are different and even trading modes are different. The World Gold Council has developed the Standard Gold Unit concept, as a way to digitally represent all gold bars in a digital ecosystem.

In order to do so, the tokenisation process must be able to specify a Standard Gold Unit that represents and transfers the monetary value of, for example, 1 gramme of pure gold. An attributes record (which includes purity, weight, location) will also be created as a secondary token that will maintain details of the gold bars collateralised in the ecosystem.

The introduction of a tokenised gold asset like the Standard Gold Unit has the potential to transform demand, facilitate trade and allow gold to be used in ways that have previously been closed to it in both the investment and banking markets.