WGC launches PGI gold-backed Token, allowing investors to hold a share of 400 ounces of gold bars.

The World Gold Council (WGC) announced the launch of a digital Token called Focused Gold Interest (PGI) in London, fully backed by physical gold bars stored in the London vaults. This will allow investors to legally hold a portion of a 400-ounce gold bar for the first time, and use it for trading, investment, or even as Collateral. This move is seen as an important step towards the digitization of London's nearly trillion-dollar gold market.

PGI: Making Gold “Divisible and Tradable”

The biggest highlight of PGI is that investors can have partial ownership without having to purchase an entire 400-ounce gold bar, and they enjoy full legal rights.

Mike Oswin, Head of Global Market Structure and Innovation at WGC, stated: “This is an opportunity to enter the market, hold a fully legitimate digital representation of gold, and fully believe that the gold actually exists.”

PGI can be used for:

1. Simple investment (similar to spot gold)

2. As collateral (like bonds or digital cash)

3. Potential future settlement tools (such as futures contract settlement)

Solving the Pain Points of the Traditional Gold Market

Currently, the gold market is divided into designated gold (directly owning specific gold bars) and non-designated gold (only owning a certain amount of rights). The risk of non-designated gold is that if the storage institution goes bankrupt, investors may lose their rights. PGI ensures that holders have direct rights to physical gold through blockchain and legal structures, making gold easier to use as collateral in the financial market.

Oswin emphasized: “We hope to turn gold into a financial asset similar to other Collaterals, making pledging gold as simple as pledging bonds.”

Digital Ambitions of the London Gold Market

According to WGC data, as of June 30, 2024, the London vault stores 8,776 tons of gold, valued at approximately $927.5 billion, with a daily trading volume of up to 20 million ounces.

The first phase of PGI will focus on the UK market, but WGC has plans to expand the model to the US and other international markets, and will release a white paper outlining its long-term vision.

Questions and Challenges

Although WGC is confident about the prospects of PGI, the market response is mixed.

Russ Mould, investment director at AJ Bell, believes that traditional “gold bugs” may not be very interested in digital gold, as they place more value on the physical properties and scarcity of gold rather than the convenience of digitization.

He pointed out: “WGC may be trying to stay relevant in an era where cryptocurrencies and stablecoins are popular, but the appeal of gold lies precisely in the fact that it is not virtual.”

Future Outlook

If PGI can be widely accepted as collateral in the financial market, it is expected to change the liquidity and application scenarios of gold, and may even become a settlement tool for futures and derivatives.

WGC's strategy clearly aims to keep gold competitive in the digital financial era and attract a new generation of investors into this historic market.

Conclusion

The launch of PGI is not only an important step towards the digitization of the London gold market, but it may also bring profound changes to the global gold trading model. It transforms gold from a “hard-to-transfer safe-haven asset” into a “divisible and tradable financial instrument,” opening a new chapter for its role in the global capital markets.