London’s $900 billion bullion market is preparing to test a digital version of gold, in what could mark one of the most significant changes to the way the precious metal is traded in centuries.

The pilot, led by the World Gold Council (WGC), aims to create a new format for trading and settling bullion: “pooled gold interests” (PGIs). These units would allow banks and investors to buy fractional ownership of physical gold held in trust accounts, opening the door for gold to be used more widely as collateral in financial markets.

David Tait, chief executive of the WGC, said the move is designed to bring gold in line with modern financial products. He argued that it could transform bullion from a static store of value into an active financial tool.

Gold has doubled in value over the past three years and recently hit record highs. Yet despite its performance, much of the metal remains locked away in vaults, valued for its physical security but unable to generate returns. By digitising ownership, the WGC hopes to make gold more dynamic — giving banks the ability to deploy it in margin calls or lending markets.

The trial, scheduled for early 2026, will include major banks and trading houses, according to the WGC. If successful, it would add a third type of trade to London’s over-the-counter gold market, alongside “allocated” trades involving specific bars and “unallocated” trades representing claims on unspecified quantities.

The project follows other digitisation efforts in the sector, including a blockchain database for refineries and gold bars launched earlier this year. However, past attempts to create gold-backed digital assets have struggled. Stablecoins such as Pax Gold and Tether Gold manage just over $2 billion combined — tiny compared with the $400 billion held in exchange-traded funds.

Skeptics argue that the initiative may face pushback in London, a market dominated by entrenched players wary of disruption. “Gold is already the best performing asset class,” said Adrian Ash of BullionVault. “This feels like a solution in search of a problem.”

Still, proponents insist digitisation is inevitable, with each gold bar one day carrying its own “passport” to verify origins and improve transparency. If adopted widely, digital gold could fundamentally reshape the way the world’s oldest asset is traded, stored, and put to use.