Royal Mint And CME Team Up On Blockchain Gold Trading Platform

Royal Mint of the U.K. and CME Group of the U.S. are teaming up to create a digital platform for dealing in gold, based on blockchain.

According to a report, the idea behind the new platform is to reduce the costs associated with trading gold. The platform is slated to launch next year. Royal Mint will issue Royal Mint Gold, or RMG, which will be traded on the platform that is being created and operated by CME. The report noted that Royal Mint will place gold bars in its onsite secure vault, which will then be digitized to create RMGs. Ownership of the RMGs will be recorded on the blockchain, and traders will be able to trade in and out of RMGs.

“While things have improved in terms of gold trading over the centuries, it’s our view that it still remains difficult and relatively expensive as a commodity to invest in … Gold is known in the industry as a negative-return investment,” said David Janczewski, director of new business for the Royal Mint, in the report. “What we’re trying to do with the announcement of Royal Mint Gold — or RMG — is to really address this issue and offer a better way to invest in solid digital gold.”

According to the report, the platform will be in operation 24 hours a day throughout the year. There will be no cost to convert the RMGs into physical gold by Royal Mint. Royal Mint plans to issue up to $1 billion worth of RMGs with plans to add more later depending on demand. The platform will be available for retail and institutional investment firms.

“We spent the greater part of this year with the Royal Mint working through the fact they wanted to launch a digital gold product and looking at all the available technologies that were out there. This is not about just applying blockchain just because it is blockchain,” said Sandra Ro, executive director of digitization at CME Group, in the report. “This is about looking for what the best delivery mechanism is that could also help us to scale at a global level over time.”