Putting gold on a blockchain

In conjunction with the LBMA, the World Gold Council is promoting blockchain technology as a means of identifying and tracking the sourcing of gold, its refining, and subsequent ownership. Is this a good idea?

Two years ago, David Tait, CEO of the World Gold Council announced an initiative to introduce blockchain technology to ensure that gold bars have been responsibly sourced and to establish a chain of custody, digitising the entire supply chain of gold bar production. There is no doubt that between them, the WGC and LBMA have been bringing considerable pressure to bear on refiners, markets, and miners in Switzerland, Japan, North America, Australia, and South Africa — some of which have signed up to the initiative.

At the launch of this “gold bar integrity programme” Sakhilla Mirza, LBMA’s General Council reckoned that the pilot scheme would take about three months (to mid-2022). Yet it was only this March that aXedras, a Swiss-based software business funded by the WGC was appointed the service provider for the gold bar database. The drawn-out timescale is likely evidence of participants dragging their feet. 

This initiative is driven by environmental concerns that the mining and processing of gold bars should be ESG compliant. The pilot project run by aXedras involved 8 mines, 9 refiners, 4 logistic companies, and 10 banks & dealers. Now that the company has been appointed to run the Gold Bar Integrity Database, we will probably hear more about this in the coming months.

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