Vincent Domien of ICBC Standard Bank argues that current physical gold holdings represent a massive, underutilized balance sheet burden. While gold serves as collateral, the process remains burdened by vault logistics and restrictive haircuts. Tokenization promises to streamline these transfers, allowing institutions to integrate gold into margin requirements and swap agreements with unprecedented speed.

Mike Oswin of the World Gold Council estimates that mobilizing this dormant wealth could introduce billions in new collateral to financial systems. The potential is vast: retail investment assets currently sit at roughly $6 to $7 trillion, while the tokenized and vaulted-gold retail market remains limited to approximately $50 to $60 billion. Beyond institutional reach, HSBC’s experience in Hong Kong demonstrates that tokenized products attract new demographics who previously bypassed ETFs or traditional bullion.

However, the transition requires rigorous standards. James Chapman of Hilltop Consulting emphasizes that the shift cannot compromise trust; digital tokens must guarantee enforceable rights to physical metal. The World Gold Council is currently developing a Wholesale Digital Gold initiative to bridge this gap, aiming to combine the legal certainty of allocated bullion with the fractionalization and settlement efficiency of digital architecture. Rather than replacing existing structures, this evolution seeks to create a complementary, high-utility framework for modern bullion management.