The global digital gold market is set to experience significant expansion, potentially growing from its current estimated size of $45-55 billion to $160-170 billion by 2031.
This projection comes from a joint report by the World Gold Council (WGC) and Boston Consulting Group (BCG), which highlights that addressing key concerns around trust, accessibility, pricing, and product utility is crucial for this growth.
The report suggests that overcoming these barriers could unlock an additional $700 billion in demand over the long term, though this is a potential figure rather than an immediate forecast. If stakeholders successfully tackle adoption hurdles, the digital gold market could mirror the scale of physically backed gold ETFs today.
In a baseline scenario, the market is expected to grow annually by about 27% over the next five years. However, an optimistic outlook could see it reach $270-280 billion, while failure to address existing challenges might limit growth to just $70-80 billion.
A survey of over 12,000 retail investors across 12 markets, including India, revealed that nearly nine out of ten investors would consider digital gold if their concerns were met. This indicates strong consumer interest but a gap in conversion due to issues like trust, clarity in regulation, and transparency regarding physical gold backing.
India, notably, already has over 120 million customers engaged in digital gold transactions. The WGC believes digital gold can attract new investors to the gold market, with about 65% of potential new demand likely coming from individuals who do not currently own gold. Future growth will depend on clearer regulations, easier physical redemption, competitive pricing, and innovative uses like lending and payments.