Noelle Acheson is a 10-year veteran of company analysis, corporate finance and fund management, and a member of CoinDesk's product team.

The following article originally appeared in CoinDesk Weekly, a custom-curated newsletter delivered every Sunday, exclusively to our subscribers.

It's hard to believe that the price of gold was fixed twice a day via conference call as recently as two years ago.

In 2015, the London gold market (the largest in the world) switched to an electronic pricing system, broadening participation and, in theory, ending decades of opacity, inefficiency and occasional manipulation. However, the price is still fixed only twice a day and most trading of physical bullion still occurs on OTC markets, perpetuating the lack of transparency and cumbersome reconciliation.

This partially explains the recent flurry of activity in gold trading technology.

This past week alone, both Euroclear and the Royal Mint announced progress in testing blockchain-based gold trading. IEX also has trials under way, and the Canadian Royal Mint already allows the public to buy and sell bullion on a blockchain platform.

Other exchanges are looking at non-blockchain clearing solutions.

While each project has different specifications, the common aim is to improve price discovery, smooth settlement, lower counterparty risk, make it easier to verify ownership of the underlying bullion and offer traders and investors a more liquid market in which to buy and sell.

Yet, the magnitude of the upcoming change to the gold market is largely misunderstood. It's not just the mechanics that change – it's the entire ecosystem.

Let’s take a look at what a more liquid and verifiable market for physical gold could do.

To start with, greater trust in ‘digitized gold’ is likely to further increase demand by lowering skepticism about price fixing and removing doubts about the authenticity of the underlying asset.

Furthermore, late last year, Shariah law was clarified to allow digital gold investment for Islamic finance if physically backed, opening up a potentially huge market.

Also, it would allow for the creation of new types of securities. Rather than 'paper gold' and 'gold reserve banking' (in which derivatives and funds are only partially based on possession of the real thing), investors would have a choice of instruments with solid backing.

Increased demand and a greater choice of vehicle is likely to further boost liquidity, which in turn would increase circulation. This would enhance gold’s functionality as collateral or even as a means of exchange.

The greater the 'usefulness', the greater the value.

Assuming all gold trading eventually moves to systems with verified reserves and instant settlement, we would finally get a better idea of how much gold is actually stored in vaults.

This could create an opportunity for new applications, or even old applications revisited. For example, as a basis for a new kind of digital currency.

While a return to the gold standard is unlikely for the world’s major economies (if only for the magnitude of the operation), the growing interest of central banks in digital currencies is telling.

Bitcoin is often referred to as a 'good' money because of its limited supply, relative fungibility and ease of exchange. If gold can also start to satisfy those requirements, a seismic shift from fiat to digital could be easier to 'sell' – the public is predisposed to trust gold, certainly more so than cryptography.

It could also open the door to the creation of a new global currency as an alternative to the dollar, something that Russia and China are rumored to be looking at.

Thus, a system that started out by backing cryptographic representation and distribution with a solid underlying value could end up doing so much more than boosting transparency, efficiency and demand.

Looking ahead, it could even be setting the stage for a new age in monetary policy.

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