The Japan Times - World Gold Council Sees Digital Gold Market Tripling by 2031

The global market for digital gold could reach $160 billion to $170 billion by 2031 if providers resolve trust, access and regulatory concerns, the World Gold Council said.

The global digital gold market could grow to $160-170 billion by 2031 from its current estimated size of $45-55 billion, provided the industry addresses concerns over trust, access, pricing and product utility, as reported by a joint report by the World Gold Council (WGC) and Boston Consulting Group (BCG).

The assessment estimates that removing these barriers could unlock up to $700 billion in additional demand over the long term. nevertheless, the WGC clarified that this figure represents potential demand rather than a near-term market forecast. “If stakeholders address the principal barriers to adoption, they can boost both participation and portfolio allocations, unlocking up to $700 billion in latent demand. Fully realised, this would create a market that broadly matches physically backed gold ETFs today,” the report stated.

In its base-case scenario, the digital gold market is projected to expand at an annual rate of around 27 per cent over the next five years, reaching $160-170 billion by 2031. Under a more optimistic scenario, the market could grow to $270-280 billion, while it could reach only $70-80 billion if existing barriers remain largely unaddressed.

The assessment draws on a survey of over 12,000 retail investors across 12 markets and interviews with 20 industry experts. It found that almost nine in 10 investors would consider investing in digital gold if the main barriers were addressed, highlighting a gap between consumer interest and actual investment.

"Demand, in other words, is not the problem. Conversion is," the report stated, pointing to the need for stronger investor confidence and wider access to digital gold products.

Trust emerged as the biggest factor influencing adoption. almost four in five investors stated they prioritised trusting the provider before investing. The assessment also found that 35 per cent of respondents would be more open to digital gold if clearer regulation and stronger consumer protection were available, while 33 per cent cited better proof and transparency of physical gold backing .

Access through familiar platforms could also support wider adoption. The assessment observed that markets where digital gold is available through banking apps, payment platforms and other mainstream channels have recorded penetration rates up to seven times higher than markets without such distribution.India already has over 120 million customers who have engaged in digital gold transactions, as reported by the report.

The WGC stated digital gold could bring new investors into the gold market rather than simply divert money from physical gold or gold-backed exchange-traded funds. Around 65 per cent of potential new demand is estimated to come from people who do not at present own gold. The assessment stated future growth would depend on clearer regulation, easier redemption into physical gold, competitive pricing and new uses such as lending, payments and using gold holdings as collateral.

K.Yamaguchi--JT