Independent precious metals authority the London Bullion Market Association (LBMA) and gold authority the World Gold Council (WGC) plan to collaborate to develop and implement an international system of gold bar integrity, chain of custody and provenance – the Gold Bar Integrity Programme.
Over time, this pilot-phase project – which will comprise LBMA and WGC global gold supply chain representatives – will ensure consumers, investors and market participants can trust that their gold is genuine and has been responsibly and sustainably sourced.
This initial phase will see two distributed ledger companies – aXedras and Peer Ledger – demonstrate how their technology can best deliver a global ecosystem that will create an immutable record of a gold bar’s place of origin and chain of custody. This blockchain-backed ledger will register and track bars, capturing the provenance and full transaction history.
LBMA CEO Ruth Crowell says the international trade in wholesale, physical gold depends on confidence. “The initiative announced today underlines the confidence that all participants in the market can have in the integrity and accountability of the gold they trade, and the gold they buy.”
She adds that this is a major advance in improving transparency for the common good of the gold industry.
As the project progresses, all major participants in the gold industry will be encouraged to adopt this technology, and add to the global ecosystem, so that all gold bars are registered and tracked across the entire supply journey from mine to vault, and ultimately to end-consumers such as jewellery manufacturers. This will effectively digitise the global supply chain of gold bars.
“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,” he adds.
Tait explains that the WGC is committed to addressing barriers to investment, such as trust and provenance, which are key to unlocking increased demand for gold.
Financial derivatives exchange CME Group global metals head and MD Jin Chang says the group welcomes the introduction of the Gold Bar Integrity Programme, which will help to further strengthen the integrity of the physical gold industry, as well as its investment and trading communities.
“We are committed to helping our clients navigate the evolution towards a more sustainable future and these initiatives help provide more clarity to the industry and our clients around how their sustainability goals are being met,” she says.