The World Gold Council is hosting a new initiative in London. They aim to revamp the outdated gold trading methods. This is related to London's $12 trillion gold market. They are going to experiment with something called PGI, which seems to convert physical gold into digital debt assets.

This PGI is quite interesting. You can instantly transfer digital units, just like co-owning gold. No need to move those heavy gold bars around. The over-the-counter trading market should save a lot of hassle. Each share of equity has a trust and is recorded digitally. This way, using gold as collateral becomes much faster. Perhaps gold could make a big impact in the repurchase and lending markets.

The head of the World Gold Council said that they want to change the way people view gold. They want gold to transform from something that just sits there to something that can make money. Banks should like to use it as collateral.

This plan seems to have a good chance, but it is quite tricky as well. After all, the London gold market has been operating like that for hundreds of years. They are still using that somewhat opaque account system to settle transactions.

The World Gold Council believes that digitization can help gold compete with other digital assets. Investors can experiment with new technologies while also holding physical assets. Some say that PGI can connect traditional gold bars with trendy financial technology. Institutions seem to be increasingly favoring digital settlement.

Recently, gold prices have surged significantly, reaching new highs. Geopolitical tensions are unstable, and central banks are frantically buying gold. Consider this: the London over-the-counter market settles $12 trillion in gold transactions each year, so the impact of this new plan could be considerable.

Some analysts say that if gold can be used as more collateral, the short-term financing market will be more flexible. Investors will also have more freedom to allocate their assets. However, there are also those who are not very optimistic. Some people in the gold circle believe that gold can maintain its importance without being digitized.