Digital gold could become a $160-170 billion market by 2031, with improved investor protection, wider distribution and greater product utility expected to drive adoption, according to a new report by the World Gold Council (WGC).
The report, Digital Gold: Unlocking a $700-Billion Opportunity, draws on a survey of more than 12,000 retail investors and interviews with 20 industry experts. It estimates that addressing barriers to adoption could unlock $650-700 billion in latent demand over the longer term.
The digital gold market, comprising tokenised gold and vaulted digital gold products, is currently valued at approximately $45-55 billion, representing less than 1% of the global gold market. The WGC estimates that the category could grow at an annual compound growth rate of around 27% to reach $160-170 billion by 2031 in its base-case scenario.
The report identifies four key barriers to growth: trust, access, utility and cost. Investor confidence remains the biggest challenge, with nearly four in five respondents prioritising trust in the provider. Greater transparency around physical gold backing, clear redemption mechanisms, regulatory clarity and stronger consumer protection could encourage wider participation.
Access through familiar channels is another important driver. In India, digital gold is available through payment platforms and apps such as Paytm, PhonePe and Google Pay. The report finds that markets where digital gold is distributed through mainstream financial channels record penetration rates up to seven times higher than markets without such access. More than 120 million customers in India have engaged in digital gold transactions, according to the report.
Product innovation could further expand demand. Investors expressed interest in earning returns through lending, using digital gold as collateral and making payments. However, providers will need to offer competitive pricing against physical gold and gold-backed exchange-traded funds (ETFs), while maintaining transparency and secure custody arrangements.
The report also points to an opportunity to bring new investors into the gold market. Around 65% of potential new demand is expected to come from people who have not previously invested in gold. Awareness is highest among younger consumers, reaching 50% among those aged 25-34, compared with 23% among investors aged 55 and above.
The WGC cautions that the $700 billion estimate represents the longer-term potential of the market rather than a near-term forecast. Its projections for 2031 range from $70-80 billion in a downside scenario to $270-280 billion in an upside scenario, depending on how quickly the industry addresses the barriers to adoption.
The report concludes that the next five years will be critical in determining whether digital gold moves beyond its current niche and becomes a more established part of the global gold investment market.