Digital Gold: Unlocking a $700-Billion Opportunity

The physical investment gold market is worth about $13 trillion. But digital gold, including vaulted digital gold and tokenised gold, represents less than 1% of the global market. 

Why does it matter?

We are seeing signs of an inflection point. With more recently launched tokenised products triggering a surge in activity, the fledgling digital gold market has grown into a $45-$55 billion1 category. Tokenised gold generated $90 billion of cumulative spot trading volumes in the first quarter of 2026, more than in the whole of 2025.2 More importantly, wider financial markets are in the midst of a structural digital transformation. As a result, tokenised investments are increasingly mainstream.


For the purposes of this report, and to understand digital gold’s potential, we surveyed more than 12,000 retail investors globally and interviewed 20 leading experts, helping us unpack the drivers of adoption and factors shaping demand. Our key finding:

Appeal is strong but is not (yet) converting at scale. Nearly 9 in 10 retail investors signal a willingness to invest in digital gold under the right conditions. Our modelling suggests that if stakeholders address the principal barriers to adoption, they can boost both participation and portfolio allocations, unlocking up to $700 billion3 in latent demand. Fully realised, this would create a market that broadly matches physically-backed gold ETFs today.

$700B – Total latent demand for digital gold in the long term.

Perhaps a more relevant question is: how much potential demand can be converted into investment over the next five years? Our base case is that the digital gold market could grow at approximately 27% CAGR, reaching $160–$170 billion by 2031.4

Fulfilling this potential will be contingent on market participants addressing four barriers:

  1. Trust as the swing factor. Nearly four in five investors say their priority is to trust the provider before investing: when asked what would make them more open to digital gold, the most cited answer is evidence that the product is safe and legitimate. Another important trust lever is a clear and accessible path to redeem holdings for physical gold, which would give investors confidence that a real asset backs their position. Regulation and consumer protection, seen across investor segments as a key barrier to entry will play an important role, too.
  2. Access through familiar channels. Where digital gold is embedded in mainstream channels such as super-apps, payment platforms and banking apps, as seen in India, China and Indonesia, penetration is up to seven times higher than in markets where such distribution does not yet exist.
  3. New utilities for gold. Unlocking latent demand partially hinges on what digital gold can be used for, not just how easy it is to buy. Yield generation, enabled by lending or use as collateral, is the top-cited unique selling point, ahead of being able to use it to make payments. This points to a potentially significant shift: product innovation could give investors new ways to use gold, alongside its long-standing role as a store of value.
  4. Competitive pricing is a prerequisite. Even where other barriers are addressed, digital products must compete on price with alternative formats, including physical gold and gold-backed ETFs. While a low price is not, on its own, a major reason to invest in digital gold, an uncompetitive price point is ranked as the second most common barrier to entry.

 

This report considers digital gold from the retail investor’s point of view. It sizes the market today and shows why so few investors who find it appealing have bought it, and what it would take to change that. The report focuses on two products, tokenised gold and vaulted digital gold (see section: This report’s scope). Our findings draw on a survey of more than 12,000 retail investors, interviews with 20 industry experts and a market model which points to three scenarios for the years up to 2031.

While physical gold is enduring, the ways in which people own it have changed over time: from bars and coins to paper certificates, ETFs, vaulted digital accounts and, most recently, tokens. Each innovation has lowered barriers to entry and expanded the market, often by splitting gold into smaller and more affordable units; from 400-ounce bars to one-ounce coins, to ETF shares worth just a few dollars. 

Tokenisation extends that trend, offering the potential to divide ownership into even smaller fractions. It also connects gold to a broader shift in the financial industry, which is that digital assets are becoming increasingly mainstream, supported by younger, digitally native investors.

For now, digital gold remains a niche product.

Its total value outstanding is about $45-$55 billion, equivalent to around 370 tonnes. This represents roughly 0.4% of physical investment gold and less than 9% of the $600 billion gold-backed ETF market. One reason is that digital gold has faced structural challenges which have constrained adoption.

Of the two digital gold products considered here, vaulted digital gold is the more established, with the first products dating back to 2005 (e.g., BullionVault).3 Tokenised gold products such as Paxos Gold (PAXG) were first launched in 2019. That difference in market maturity is reflected in volumes. Vaulted digital gold accounts for about 89% of the digital gold market by value, while tokenised gold accounts for about 11%. Both product categories are highly concentrated, with a handful of providers associated with the majority of volumes.

For vaulted digital gold, participants are drawn from across the gold value chain. They include bullion dealers and vault operators, sovereign mints, refiners and banks, alongside distributors such as super-apps and independent platforms. Meanwhile, tokenised gold issuance has generally been confined to a small group of crypto-native entities. But that is changing, with interest now expanding across the value chain and to more traditional financial institutions. HSBC’s Gold Token is one example.4

Vaulted digital gold currently makes up 89% of digital gold

Vaulted digital gold’s scale is also concentrated geographically, with more than half of it held in China, India, and Indonesia,5 a regional footprint that the tokenised gold market has yet to match.

That said, tokenised gold has been the primary source of recent activity, having seen fivefold expansion since late 2024 (2.8x increase in underlying volumes), from $1.2 billion to $6 billion. The growth has been led by Tether Gold (XAUT) and Paxos Gold, which today represent more than 90% of the public tokenised6 gold market. Trading activity has also expanded, with combined daily volumes across the two largest tokens up by approximately 45% over the past year.6 Rising transaction volumes point to growing product utility (more detail in Section 3) and represent an opportunity for value capture across the value chain.

While digital gold’s appeal is demonstrably high, it is not (yet) converting at scale

That gap between appeal and conversion is the central finding of our research and explains why an increasingly compelling market remains relatively small. To understand how the gap may close, we reviewed awareness of the product category, familiarity of the channels through which it can be purchased, and the factors that convert awareness into ownership.

Awareness is highest among younger cohorts, reaching 50% among 25-34-year-olds, compared with 23% among those aged 55 and over (Exhibit 3). This reflects the fact that younger generations are entering financial markets earlier than previous generations and investing through digital channels by default.1 We return to what this means for growth in Section 4.

Distribution through familiar channels drives mass adoption

Consumers tend to invest smaller amounts but at far higher penetration rates in markets where digital gold is available fractionally through familiar, mainstream channels. In China, for example, digital gold can be accessed through platforms such as WeChat, which has more than 1.4 billion monthly active users.2 In India, it is available through Paytm, PhonePe and Google Pay, and in Indonesia through Pegadaian and Bank Syariah Indonesia. These channels provide access to large, established consumer bases and enable investment at much lower average ticket sizes than channels available in other markets. As a result, awareness and adoption are significantly higher: current penetration is up to seven times greater than in less mature markets, while awareness is more than double (Exhibit 4).

In markets where products are offered through specialist or less familiar channels (crypto exchanges or bullion-dealer platforms rather than banking apps), awareness is much lower and ownership remains concentrated among the wealthy. Penetration among higher-wealth investors is approximately two and a half times that of lower-wealth investors. Access, in other words, determines not just how many people invest but who they are. Where access is constrained, demand patterns reflect those of specialist investment products.

What is holding investors back?

Four barriers stand in the way of scaling: These are trust, access, utility and cost.

Trust is the swing factor. More evidence that the product is safe and legitimate, together with clearer information for beginners, are the factors most often cited as potential spurs to investment. Beyond those factors, 33% say that better proof and transparency of physical gold backing would increase adoption, and 35% say that clearer regulation and consumer protections would have the same effect.

Utility is another potential driver of uptake. If investors could pay with digital gold, earn a yield through lending, or borrow against it, they would have more reasons to buy. Access and cost complete the picture. While they are not key drivers of demand, restrictions on where digital gold can be bought and whether it can compete with alternative investment products are cited as top reasons that would prevent someone investing in the future.

What if the barriers were addressed?

Our survey has helped us quantify the impact of each barrier (Exhibit 6). In aggregate, our calculations show that taking action to address all four barriers could reasonably increase participation by 13 percentage points and allocations by 2.5 percentage points. Regulatory or similar protection is seen as the single most powerful lever for participation. Together, these effects account for the digital gold market’s total latent demand of up to $700 billion.

Latent demand to match the gold-backed ETF market

The potential market for digital gold is far larger than current adoption levels suggest. Nearly 90% of survey respondents say they would consider investing if the main barriers were addressed.

Based on the modelled increase in both market participation and portfolio allocation, removal of all the barriers could unlock up to $700 billion in latent demand.

This is not a near-term market forecast; it is an estimate of the total opportunity in today’s terms.

Consumer sentiment is consistent with the aggregate industry view. Our research shows that market participants see potential and are monitoring demand and exploring options. Interest now spans the value chain and encompasses refiners and mints, exchanges, custodians and banks.

Demand, in other words, is not the problem. Conversion is. The three most important questions now are how much of the opportunity can be captured, how quickly, and what must the industry do to make it happen?

Having identified a total long-term opportunity of up to $700 billion, we set out three scenarios for the level of latent demand that could be converted into investment over the next five years:

In our base case, the retail digital gold market is projected to grow from approximately $45-$55 billion today to $160–170 billion by 2031, representing annual expansion of around 27%. At that size, the digital gold market would be more than a quarter of the size of today’s gold-backed ETF market.

In the bull case, the market will reach $270–$280 billion by 2031 as barriers are removed more rapidly, accelerating the conversion of interest into investment.

In the bear case, no current market barriers are addressed at meaningful scale and the market will expand to $70–$80 billion by 2031, driven primarily by underlying drivers of growth in the digitally-enabled population and in investable wealth, as opposed to conversion of latent demand.

The gap between the bear case and the others is, in effect, the value of latent demand that is actually converted. Structural tailwinds will grow the market regardless, but everything above the bear case depends on the speed and scale at which the barriers are addressed.

What would it take to achieve our base case?

Achieving the base case means making progress on all four barriers, meaning the digital gold market must focus on:

Building trust.

In many markets, product standards and regulatory regimes remain fragmented or absent, and often it is unclear who the relevant regulator should be. Equally, digital gold investors need greater assurance on physical backing and protection in the event of issuer insolvency or misconduct.

While the products are ready, the ecosystem around them needs to catch up. Boosting trust in digital gold will require clear and consistent standards, effective regulation and greater transparency around product structures, as well as physical backing and investor safeguards. Still, there are signs that regulatory momentum is building. Indonesia has introduced a dedicated digital gold regulatory regime, while the UK Financial Conduct Authority has launched a Call for Input on tokenised gold. Hong Kong has committed to bringing gold-backed tokens into its tokenised investment product framework. These initiatives will not only reassure potential investors but provide the clarity that financial institutions need to bring products to market.

Redemption is possible today, but the terms are often restrictive, both in terms of where the metal can be redeemed (in many cases, one location worldwide) and in the minimum value required (for example, a 400-ounce bar). As a result, redemption currently functions mainly as a guarantee, and issuers that already offer it say it is a primary reason why customers trust the product. Widening that guarantee, through more redemption locations and lower minimum thresholds would fuel demand. Customers will trust digital gold products more if they can sell easily and exchange the product for cash or the physical metal.

Unlocking access.

Digital gold must become easier to find and buy. This means offering products through reputable, familiar institutions and integrating them into established channels.

For the most part, digital gold is not yet accessible through everyday financial platforms. Indeed, particularly in the case of tokenised gold, access remains limited, often requiring investors to engage with unfamiliar routes to market, such as setting up a crypto wallet. As a result, adoption has been concentrated among crypto-native and digitally confident investors.

Where digital gold has been embedded into channels that investors already use, the results have been compelling. In India and Indonesia, digital gold products have been integrated into super-apps, payment platforms and banking channels, leading to over 120 million customers in India1 having engaged in digital gold transactions and 5 million in Indonesia.2

Expanding product utility.

Much latent demand for digital gold is due to the product’s potential for incremental utility, with the top use cases being yield generation from activities such as lending, collateral servicing and payments, as well as a clear path to physical redemption.

Earning a yield is typically achieved by lending the product out or posting it as collateral. Payments usually consist of using gold to transact directly or send remittances. These use cases remain nascent in digital gold and represent a significant opportunity.

Yield generation through activities such as lending, collateral use and options writing is already possible for physical gold and gold ETFs, although it typically requires a specific brokerage feature or directly negotiated terms. Uptake among retail investors remains low. Embedding ownership in smart contracts could enable holdings to be pledged, transferred, reallocated or used to write derivatives automatically, potentially creating a significant investment opportunity.

PAXG and XAUT are deployable as collateral on Aave, one of the largest relevant platforms, which alone holds more than half of tokenised gold DeFi deposits. In early 2026, levels of demand to borrow against XAUT repeatedly hit the platform’s supply cap (the maximum amount that can be posted as collateral across the platform).

The trend is now broadening beyond decentralised platforms. In September 2026, Arch Lending, a crypto lending platform, also began accepting PAXG and XAUT as loan collateral.3 Tokenised gold turns over daily at roughly six times the rate of major gold-backed ETFs,4 showing holders are actively trading, rather than just holding. Paxos Labs’ newly launched gold-backed cryptocurrency token (PAXGy) goes a step further, building a yield directly into a PAXG-backed token through gold lending to institutional borrowers.

In the first quarter of 2026, cumulative trading volume in gold-backed tokens exceeded $90 billion, more than in the whole of the preceding year. That is a sure sign of growing product utility and the opportunity for value capture across the value chain.

Payments is another use case, but it remains niche, despite the fact that digitisation removes the physical constraint that has historically stood in the way. Market participants must overcome two barriers: building the necessary infrastructure and persuading merchants to accept it. Both have stalled would-be alternatives to fiat for centuries.

That said, the rise of cryptocurrencies and fiat-denominated stablecoins over the past decade has effectively dismantled both payments barriers on gold’s behalf. Blockchain rails built for other digital assets give gold tokens a ready-made transmission network. The ability to swap gold tokens for stablecoins means merchants can accept a gold-funded payment and receive fiat equivalents without ever needing to hold gold themselves.

Becoming more competitive on costs.

Even where trust and access improve, digital gold products must compete on price with other products, including physical gold and gold-backed ETFs. Digitisation on its own does not lower the underlying cost base, because sourcing, custody and compliance costs remain largely the same.

Some digital gold providers have not viewed user fees as the primary source of revenue (unlike other product categories), testing to capture revenue from other intermediaries. Physical gold carries a different cost profile, a purchase premium of several percentage points over spot for coins and small bars and ongoing vaulting and insurance costs. Whether that pricing will hold in future depends on two key drivers. The first is assets under custody (AUC) volume, which offers economies of scale on the supply side by spreading sourcing, custody and compliance costs across a larger asset base. The second is trading velocity, which determines how much value providers can capture across the value chain as holdings turn over more frequently. Providers need to be able to offer competitive pricing to solve for both.

Much of the growth predicted in our base case would be new money for gold, rather than money moved around within the asset class. 

This is one of the most distinctive findings of our research. The bulk of latent demand lies with people who do not yet own gold, and specifically younger investors who are the keenest to buy digital gold products. Digital gold, in other words, is likely to grow the gold market rather than carve it up.

We see sharp differences across groups on the factors that limit investment, with redemption most important to gold investors and yield most important to digital asset investors (Exhibit 10).

That said, our research suggests that approximately 65% of new demand will come from first-time entrants to the gold market. 

Interest in digital gold among younger generations is not only apparent in levels of awareness. 

Both intention to buy and share of portfolio allocated to digital gold peak in the 25-34 age group, and under-45s collectively convert at roughly double the rate of those aged 55+ (Exhibit 11).

Given that willingness to invest, digital gold should be the avenue through which the broader gold market brings younger demographics (aged 35 and below) to the asset class. 

Among those who convert their interest into investment, the more direct question is where the money will come from. While growth will likely emanate from a mixture of incremental demand and substitution for other forms of gold investment, the survey reveals that incremental demand will dominate. 

About 53% of current gold investors would use money from non-gold investments or money currently not invested at all for buying digital gold (Exhibit 12).

These findings are consistent with the views expressed by people already holding digital gold. We find that 52% of that group held no gold in any form before their first digital purchase, of which 92% went on to buy other forms of gold after they bought digital gold.

Some industry participants believe that tokenised gold will cannibalise other products, particularly gold-backed ETFs. Tokenised products enable 24/7 trading and offer additional use cases that give them a slight product edge. These are advantages that gold-backed ETFs cannot currently match, and early evidence suggests investors value them: in tokenised equity markets, more than half of trading occurs outside traditional market hours, pointing to real demand for round-the-clock access.1 However, gold-backed ETFs have gained market share by making gold easier to access within the existing, regulated financial system, and digital gold has yet to establish the same level of trust. The relative advantages of each product address different investor needs, helping to explain why cannibalisation is likely to be limited. That said, if digital gold can overcome the trust deficit, some cannibalisation is likely, although it would be small relative to the incremental demand it would unlock.

In practice, we believe the gold market is likely to grow in aggregate, while a small share moves between products. 

Net of displacement, the base case represents approximately $95 billion of genuinely new demand by 2031. This mirrors how gold-backed ETFs grew; by adding a compelling product that builds its own market over time.2

In practice, we believe the gold market is likely to grow in aggregate, while a small share moves between products. 

Net of displacement, the base case represents approximately $95 billion of genuinely new demand by 2031. This mirrors how gold-backed ETFs grew; by adding a compelling product that builds its own market over time.2

The scenarios described in Section 3 hinge on how quickly the four barriers come down, but there will not be progress without deliberate effort. Change is predicated on progress across the market, from token issuers, vaulting providers, and regulators, as well as banks and platforms that ultimately connect with retail investors.

So how will we know if it is working? 

Four signals, each likely to manifest before 2031, will show whether digital gold is on track for the base case, the bull case or neither:

1 Trust taking shape through regulation and redemption. 

The signal is whether consultations turn into regulation, from the UK FCA’s Call for Input on tokenised gold to Hong Kong’s move to bring gold-backed tokens into its tokenised investment framework, and whether redemption terms loosen, with physical gold available at more locations and lower minimums. Clarity on both fronts in leading markets is the base case, while a harmonised global framework paired with broadly available redemption would favour the bull case. With trust seen as the single biggest barrier for every group of investors, this is the one to watch first.

2 Major banks putting digital gold in their apps. 

Asian markets have shown that making digital gold available through channels customers already use and trust, and especially banking apps, significantly drives uptake. Our base case is that banks in the remaining leading markets will follow suit. Banks and other scaled platforms offering access everywhere would point to the bull case.

3 New revenue models unlock competitive pricing.

Digital gold providers are finding new ways to make money beyond simply charging customers for holding gold. By offering additional products and earning a share of trading fees, providers can generate new sources of income. Enabled by new technology and digital banking platforms, these revenue streams can help cover the costs of holding gold, allowing providers to offer customers more competitive prices.

4 Utility breaking out of the crypto niche. 

Yield and collateral use cases are already live but mostly on crypto-native platforms. The signal is whether regulated institutions adopt them and whether payments follow. Partial progress in the leading markets is the base case. All three uses at scale would point to the bull case.

If the signals emerge faster and more powerfully than expected, digital gold can do what every earlier innovation in gold ownership has done: lower barriers to entry and grow the market as a whole. 

Capturing that opportunity will take an industry-wide effort. The World Gold Council is committed to act as a convenor, bringing together stakeholders who can make it happen. We encourage any organisation, regulator or individual who wants to shape this movement to reach out.