blockchain is changing gold

At FintekNews, we think we are witnessing something HUGE in the making in financial markets. Today we had a conversation with Mike Belshe of BitGo and Igor Telyatnikov of AlphaPoint, the technology and trading partners involved with the CME Group and Royal Mint Group to develop a digital gold product for the markets. According to the team, the new token, referred to as RMGs, is set to launch for institutional markets later this year, offered through pair trades against British Sterling, US Dollars and Euros.

The RMGs will be able to be traded through digital wallets and it is anticipated that the largest markets initially will be the UK and the US, with the hope that demand grows internationally and into retail markets as well. What makes it particularly compelling is the fact that it is backed with physical gold, stored at the Royal Mint Vault, and it is anticipated that some who buy the tokens (though not all) will indeed want to take actual delivery of the gold. Anyway, highly recommended that you read the piece below and brush up on this important and truly revolutionary new offering from the CME Group & Royal Mint.

(Cindy Taylor, Publisher)

By Peter Shadbolt,

At A Glance

  • The Royal Mint and CME Group team up to create a new digital gold product
  • The RMG blockchain and trading platform are in live testing with major financial institutions
  • An open source blockchain aims to give more transparency to gold settlement

One of the great promises of blockchain technology is that it could transform the way we conduct transactions. From banking to smart contracts to recording land titles, the promise of blockchain technology to make a whole range of functions more efficient is being tested in proofs of concept at a rapid pace. And, in the financial services space, the latest example of a blockchain technology offering efficiencies is RMG (Royal Mint Gold), a digital gold product created by The Royal Mint and CME Group.

CME Group is responsible for developing and operating the product’s digital platform which will provide a fast, cost-effective and cryptographically secure method of buying, holding and trading spot gold.

Backed by Real Gold

Sandra Ro, head of digitization at CME Group, says the new blockchain-based product is an entire trading eco-system for gold, providing speed, security as well as transparency of direct ownership.

“An RMG is a digital representation of real gold sitting in the Royal Mint vaults,” Ro says.

“When you purchase RMGs you will effectively have real gold that is allocated from a direct ownership standpoint that is completely reserved – there is no re-hypothecation, there is no lending on that gold, there will be enough physical gold to represent all the RMGs that are issued.”

Currently the plan is to launch the product backed by up to $US1 billion in gold bullion.

As well as being able to trade RMGs through digital wallets, investors and traders will also be able to take delivery of physical gold if they so wish.

“This is the first digital gold product that is institutionally targeted – and the first to work with a government entity – to be currently in a live testing state,” says Ro.

“Distributed ledger technology is a game changer and supplying gold on a blockchain has been something The Royal Mint has wanted to develop for some time,” says Vin Wijeratne, CFO of The Royal Mint.

“Developing a trading platform with CME Group will satisfy customer demands for faster, cost effective and secure ways to buy, hold and sell gold and complement our existing products. This landmark partnership allows us to combine the world’s leading mint, the best commodities futures trading platform globally and best in class technology.”

First « 1 2 3 » Next