Some of the most prominent organizations in the gold mining industry have joined forces to launch a new “honesty program” that uses blockchain technology to manage supply chains, a move designed to help market participants verify the authenticity of their bars.
The London Bullion Market Association (LBMA) and the World Gold Council (WGC) announced on Monday that they are collaborating on the development of an “international system for the integrity of gold bars, supply chain and provenance” based on blockchain technology developed by aXedras and Peer Ledger. The journal will be used to record and track gold bars at every stage of the production and distribution cycle, including mining, storage and purchase by jewelry manufacturers.
The so-called gold bar integrity program is supported by organizations such as CME Group, Metalor, Barrick Gold, Brinks, Royal Canadian Mint, Newcrest Mining, Hummingbird Resources, Argos Heraeus SA, Asahi, Aura Minerals, Perth Mint and others.
Initially developed as a pilot program, it will eventually be promoted for use in the gold mining industry, according to the LBMA and WGC.
Supply chain management has been mentioned as one of the most promising use cases for blockchain technology. More than half of the companies added to the Forbes Blockchain 50 2021 list were businesses actively using distributed ledger technology to solve their supply chain and logistics challenges, Cointelegraph reports. In April 2021, US defense contractor Lockheed Martin said it was using blockchain technology to manage supply chains in Switzerland.
Our CEO David Tate and LBMA CEO Ruth Crowell announced today the launch of a new Gold Bar Integrity Program. Together with @lbmaexecutive, we will develop and implement an international gold bar integrity, supply chain and provenance system: https://t.co/jcZ6V1wYLB pic.twitter.com/x7klqZ8WTL — World Gold Council (@GOLDCOUNCIL) March 28, 2022
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Issues such as illegal mining, gold laundering, counterfeit bars and human rights violations have made the gold industry particularly vulnerable to supply chain opacity. In 2020, the Organization for Economic Co-operation and Development published a report making recommendations on how gold producers can avoid “serious disruption” to the mining and production process.