Gold commodities market could enter the blockchain under new initiative
A partnership between the World Gold Council (WGC) and Swiss-based DLT infrastructure and application provider aXedras Group could make gold trading more accessible and streamlined, though insiders are skeptical, according to a Bloomberg report Sunday.
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Fast facts
- The WGC’s initiative “Gold247” proposes bringing a major segment of the multi-trillion-dollar gold market into Web3, using blockchain to create a database to track the world’s tradable gold bars.
- The next step in the plan could be to create a digital token backed by physical gold that can be more easily traded than the 400 oz gold bars, David Tait, who heads the World Gold Council, told Bloomberg.
- In recent years, gold and digital tokens have competed as an investment alternative to stocks, bonds and fiat currency. Bitcoin is often referred to as “digital gold” by some advocates.
- The council has tried a merger between the two assets before, helping to launch a gold-backed exchange-traded fund in 2004. However, there are barriers that can prevent retail investors from swapping ETF shares for actual gold bars, according to Bloomberg.
- Instead, the initiative’s envisioned gold-based tokens would “defragment” the gold market, increasing accessibility and transparency of the actual physical commodity and stimulating demand from everyday investors, WGC says.
- However, market players gathering for a conference on Oct. 16 were skeptical that Gold247 will gain traction, with so many previous attempts to disrupt failing, reported Bloomberg.
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