The gold sector is betting that the blockchain technology will help in keeping illicit bullion bars out of the international industry. For this reason, the gold industry adopts blockchain.
The World Gold Council (WGC) and London Bullion Market Association (LBMA) are among the largest names in the gold industry worldwide. Both players have lately declared a collaboration for the release of the Gold Bar Integrity Program, which is an initiative that will employ blockchain technology to enhance the supply chain of gold bars.
Gold Industry Adopts Blockchain: The Gold Bar Integrity Program
The way the gold industry adopts blockchain and the program will also help the gold sector in the prevention of fraudulent activities. The ledger that is based on blockchain will register gold bars. Along with that, the technology-driven service will also keep a track of gold bars across the whole supply chain.
The initiative tries to enhance transparency and safeguard gold mined by criminal gangs or in conflict areas ending up in bank vaults. The first phase will include all parts of the gold supply chain from the miners to refiners and involve banks like Standard Chartered Plc.
According to Ruth Crowell, chief executive officer of LBMA, on the idea of the gold industry adopts blockchain, said in a statement,
“The international trade in wholesale, physical gold depends on confidence. This is a major advance in furthering transparency for the common good of the gold industry.”
The ledger will not be completely public in the way that it is for BTC (Bitcoin) often witnessed as a competing asset to gold as said by Crowell in an interview. Still, participants at varying stages of the supply chain will be offered permission to access it.
Kilobars of gold will be the primary aim of the pilot as they have historically been worst impacted by fraud, Crowell stated. Gold bars fakely stamped with the logo of accredited LBMA refiners have before found their way into the London market, possibly exposing it to illicit metal.
As per the LBMA, the association is aiming at encouraging big participants in the gold sector to adopt blockchain technology for the purpose of tracking and registering the complete supply chain of gold. According to David Tait, Chief Executive Officer, World Gold Council,
“This transformative project is the first step towards a more aligned gold industry, where we work together to ensure a more accessible and transparent market. Consumers and investors want to know their gold has been responsibly and sustainably produced and tracing the origin of gold bars will help enforce the highest standards across the entire supply chain. At the World Gold Council, we are committed to addressing barriers to investment such as trust and provenance as this is key to unlocking increased demand for gold.”
On Monday, two major gold groups released a pilot initiative to monitor gold shifts digitally via the global supply can as an avenue to assure the authenticity and strengthen transparency within the sector in the case of precious metals. Two distributed ledger entities, Peer Ledger and aXedras will demonstrate their technology under the primary phase of the program. So the gold industry adopts blockchain for a safer operation of these precious metals.