LBMA panel: tokenization could expand gold’s practical use
Tokenized gold could give vaulted metal new roles in finance, but trust in physical backing and clear rules are still needed, panelists said at LBMA 2026.
At the 2026 Global Precious Metals Conference hosted by the London Bullion Market Association (LBMA), industry experts debated how tokenization might change gold’s role in finance. While gold is a widely respected monetary asset, much of it remains dormant, locked in vaults. Panelists noted that issuing digital tokens backed by physical gold could make it more usable as collateral or as a method of transfer, potentially increasing the asset’s practical appeal.
Vincent Domien of ICBC Standard Bank said institutional demand for tokenized gold is limited so far, but this could shift as technology reduces barriers. Physical gold as collateral brings challenges like vault restrictions and required valuation discounts. Domien stated, “If you’re able to tokenize gold and everybody’s able to instantly use it, then suddenly you increase the use of gold dramatically.”
Mike Oswin from the World Gold Council explained that making vault-stored gold easier to transfer could add billions of dollars of collateral to global markets. James Willis of HSBC described how their digital gold token in Hong Kong drew new clients due to its convenience compared to traditional products like bars or exchange-traded funds (ETFs). Panelists argued that digital gold could drive more frequent trading and higher institutional and retail interest.
Physical backing and rules matter most for tokenized gold
The panel made it clear that trust in tokenized gold depends on verified physical backing and clear legal structures. Every digital token should correspond to real, securely vaulted bullion, with public standards and established rights. As James Chapman of Hilltop Consulting said, holders need confidence that each token is backed by actual gold and that they have enforceable rights to that metal. The World Gold Council is now working on new digital initiatives that try to provide both the certainty of allocated gold and easier transfer.
For buyers, tokenization does not end questions about provenance or custody. Unless a token is redeemable for physical metal under tested and transparent rules, it is still only a claim. The reliability of any token depends on disclosures from custodians, legal clarity, and audits of the backing metal. These aspects are still evolving and are not consistent between issuers.
We think physical metal and tokenized claims serve different needs. Tokenized gold may offer faster movement or smaller increments, but for buyers focused on direct physical ownership, delivery rights and proof of backing remain critical. The core question always returns to what is in the vault and whether it can be verified and delivered. Digital innovation may expand gold’s role, but a token ultimately only matters if the gold is accounted for.
This article is general information, not investment advice. Facts from other publications are their reporting, linked above.