Forex Portal, October 7—At the London Bullion Market Association (LBMA) conference, industry experts discussed the tokenization of precious metals to revitalize the huge volume of idle balance-sheet gold. Tokenization could simplify the process of pledging gold, help institutions use it as transaction collateral, and lower the barrier for retail investors, unlocking the enormous potential of the retail market. Experts stressed that tokenized gold must be backed by physical gold, rely on custodial safekeeping and clear ownership rights, serve as an additional solution for the existing gold market, and enhance the value of gold assets.

Gold has long been regarded as a key foreign-exchange asset, but a significant amount remains merely a balance-sheet resource, generating no additional financial benefits. At the annual LBMA global precious metals conference, experts said that tokenizing precious metals could improve the efficiency of gold utilization and attract more capital to the sector. Vincent Domien, head of precious metals trading at Standard Bank, noted during a panel discussion that although institutional investor demand for tokenized gold remains low for now, a sharp increase in the efficiency of using this asset could bring about significant changes in the market. He said: “With gold prices continuing to rise, the most obvious problem is that a large amount of gold on balance sheets simply remains idle and provides no benefit to its owners.”