LBMA and World Gold Council to Employ Blockchain to Ensure Global System of Gold Bar Integrity
Many of the gold sector’s renowned firms have joined forces to create a novel “integrity program” that leverages blockchain technology for logistics management, with the goal of assisting market participants in verifying the legality of their bullion. The London Bullion Market Association (LBMA) and the World Gold Council (WGC) announced on Monday that they are collaborating to build a “global system of gold bar quality, chain of storage, and origin” based on aXedras and Peer Ledger’s blockchain network.
The logbook will be used to track and document gold bars at every step of their manufacture and supply, including mine, vaulting, and buying by jewelry manufacturers. The aforesaid Gold Bar Integrity Program is backed by companies including CME Group, Metalor, Barrick Gold, Brinks, Royal Canadian Mint, Newcrest Mining, Hummingbird Resources, Argos Heraeus SA, Asahi, Aura Minerals, Perth Mint, and many more. As per the LBMA and WGC, the initiative, which was developed as a trial, would eventually be recommended for use throughout the gold sector.
Logistics management is among the most promising uses of blockchain technology. Per the Forbes, over 50% of the firms on the Forbes 2021 Blockchain 50 list are active users of distributed ledger technology to solve distribution chain and logistical issues. In April 2021, Lockheed Martin, an American defense contractor, announced that it was using blockchain technology for logistics management in Switzerland.
The gold business is especially vulnerable to supply chain complexity due to illegal mining, smuggled gold, fake bullion bars, and abuses of human rights. Two years back, the Organization for Economic Cooperation and Development (OECD) released a paper outlining how gold firms might avoid “grave abuses” in the mining and production processes.