The digital gold market could attract up to $700 billion in latent demand, but the industry must first build investor trust, expand access and address barriers around product utility and pricing, according to a new World Gold Council report.
Digital gold, including vaulted and tokenized products, has reached an estimated $45 billion to $55 billion, or less than 1% of the $13 trillion physical gold investment market.
The findings are based on a survey of more than 12,000 retail investors globally and interviews with 20 experts. Nearly 90% of respondents said they would be willing to invest in digital gold if the right conditions were met.
According to the report, tokenized gold products, led by Tether Gold (XAUT) and Paxos Gold (PAXG), a token backed by London Good Delivery bars, generated $90 billion in cumulative spot trading volume during the first quarter of 2026 alone.
That exceeded the total for all of 2025. Daily volumes across the two largest tokens climbed roughly 45% year-over-year. Tokenized gold has expanded fivefold since late 2024, from $1.2 billion to $6 billion in value outstanding.
Four barriers
The report identifies four barriers, ranked by importance: trust, access, utility, and cost.
Trust is the dominant bottleneck. Almost four in five surveyed investors said they needed to trust a provider before committing any money. A third want clearer proof that real physical gold actually sits behind the digital product. More than 40% said a major custody failure, fraud, or hack would damage their confidence.
Access is the second barrier. In markets where digital gold is embedded in everyday platforms (WeChat in China, Paytm and PhonePe in India, Pegadaian in Indonesia) adoption rates run up to seven times higher than in markets where buyers have to navigate unfamiliar crypto wallets or specialist bullion-dealer websites.
Over 120 million customers in India have engaged in digital gold transactions through mainstream apps. Indonesia counts about 5 million.
Yield and collateral use
Yield generation through lending or collateral posting is the most-cited reason investors would consider buying.
PAXG and XAUT are already deployable as collateral on Aave, the decentralized lending protocol, which holds more than half of all tokenized gold deposited in DeFi. In early 2026, borrowing demand against XAUT repeatedly hit Aave’s supply cap.
Paxos recently launched PAXGy, a new token that builds yield directly into a PAXG-backed product through institutional gold lending.
Arch Lending, a crypto lending platform, began accepting both major gold tokens as loan collateral in September 2026. Tokenized gold turns over daily at roughly six times the rate of major gold-backed ETFs.
Growth projections
The World Gold Council projects the digital gold market will reach $160 billion to $170 billion by 2031 in its base case, growing from an estimated $45 billion to $55 billion today at an annual rate of about 27%.
A more optimistic scenario sees the market expanding to $270 billion to $280 billion by 2031 if barriers to adoption fall faster.
Under the bear case, where those barriers remain largely unresolved, the market would reach $70 billion to $80 billion, supported mainly by growth in the digitally enabled population and investable wealth, the Council suggests.
New investors could account for much of the opportunity. Around 65% of latent demand comes from people who have not yet invested in gold, while more than half of existing gold holders interested in digital gold say they would use money not currently allocated to the asset.
The report also found that 52% of current digital gold holders had not owned gold in any form before making their first digital purchase. Of those investors, 92% subsequently bought physical bullion.
The Council estimates that roughly $95 billion of the base-case growth by 2031 would represent genuinely new demand, money that would not otherwise flow into gold in any form.
Gold-backed ETFs, which were met with similar skepticism when they launched two decades ago, now constitute a $600 billion market.
Disclosure: This article was edited by Kaye Quema. For more information on how we create and review content, see our Editorial Policy.