Yesterday the London Bullion Market Association (LBMA) and the World Gold Council (WGC) announced a joint initiative to use enterprise blockchain to ensure gold bar integrity. Combining chain of custody and provenance, the aim is to demonstrate that the gold is genuine and sustainably sourced. LBMA first initiated work on its Gold Bar Integrity Programme in 2018.
Meanwhile, in 2016, Leonardo DiCaprio brought attention to conflict minerals through the Blood Diamond movie. But gold is very much part of the mix. Last year Sentry published a report about the risk of buying gold in Dubai where the money funnels to armed groups that are responsible for atrocities in Africa. On top of that is the issue of child labor, particularly in the Democratic Republic of Congo.
The news is an important step in addressing the issue, especially given the London market’s dominance in physical gold trading. On a daily basis $58 billion is traded in London (2019), followed by the CME futures market at almost $42 billion. Shanghai comes third, with the Shanghai Futures Exchange and Shanghai Gold Exchange trading over $14 billion daily combined.
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