Earlier this week, the World Gold Council and the London Bullion Market Association announced that they would be launching a program with a pair of companies to explore the use of blockchain technology on kilogram bars of gold.
Blockchain is a digital ledger form that’s shared among users. For instance, data on the purchase and sale of an asset is updated and held among users, increasing transparency while making it difficult to interfere with. This technology is behind well-known cryptocurrencies such as Bitcoin.
These gold-industry organizations hope that the use of this technology in digitizing metal trading will bring more transparency to gold bullion’s obscure supply chains. The pilot program, dubbed the Gold Bar Integrity Program, will involve more than 10 miners and is expected to run until the last quarter of the year.
In their announcement, the organizations stated that their ultimate objective was to make the use of blockchain the standard among all parties participating in the gold market. aXedras, a Swiss company focused on applying blockchain to precious minerals, and Peer Ledger, a Canada-based blockchain company, are the two companies that will take part in the pilot program.
The World Gold Council and the London Bullion Market Association also revealed that phase one would see the companies exhibit how their technologies could be employed at the scale of the international gold market. These leading industry bodies hope that the program will also help cut down on fraud and meet increasing demand from gold consumers and investors to know whether any particular metal was produced ethically and sustainably.
In his statement, the World Gold Council’s CEO David Tait stated that some of the major members were already on board with the idea as they saw the value of advancing the standards they adhered to.
The London Bullion Market Association, which represents the silver and gold industry, plays a major role in scrutinizing gold supply chains. Refiners that follow the trade association’s good delivery standards have to ensure that their gold is free from any connection to human rights abuse, environmental damage and money laundering. Figures show that the refiners following the association’s standards make up roughly 90% of international gold production. The London Bullion Market Association hopes to, in the long-term, make participating in the blockchain a requirement.
CME Group Head of Metals Jin Chang noted that the program would strengthen the physical gold industry’s integrity while offering more clarity to the industry around how sustainability goals were being achieved.
Deploying blockchain technology is one additional way to increase transparency in the sector, and coupled with other measures that industry players such as StraightUp Resources Inc. (CSE: ST) (OTCQB: STUPF) follow, the gold value chain can be absent of all undesirable attributes, such as gold obtained fraudulently getting into circulation in the formal market.
NOTE TO INVESTORS: The latest news and updates relating to StraightUp Resources Inc. (CSE: ST) (OTCQB: STUPF) are available in the company’s newsroom at https://ibn.fm/STUPF
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