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Royal Mint Announces Blockchain For Gold Trading

The Royal Mint has announced it is to launch a blockchain to facilitate the trading of gold, in response to growing demand from traders to embrace new technologies.

Founded in 886 AD, the Royal Mint has had the exclusive authority to produce coins in the U.K. for over 1200 years, as well as running production on a number of other international currencies. While it is arguably an unlikely company to be at the cutting edge of new developments, the announcement signals another major boost to the development and implementation of wider blockchain technology.

With a range of new challenges ahead for the mint, both technological and competitive, the body has said it is exploring alternative options to improve future offerings to partners and customers.

Director of new business David Janczewski said the move to blockchain could reduce operational costs, while providing a better service from the Royal Mint for all of its stakeholders.

“There are costs associated with vaulting and storing gold and physical assets. It's for this reason gold is often referred to as a negative return investment. We intend to address the issue and offer a better value way to invest in physical gold."

The decision to explore a blockchain for gold trading could see the mint archiving 400-ounce gold bars, using the blockchain to securely transfer ownership from one trading party to another. In collaboration with derivatives platform CME Group, the Royal Mint is hoping a digitized ledger could help reduce storage and transaction costs, while providing a more efficient mechanism for effecting trade in gold.

The Royal Mint has suggested it could initially issue up to $1 billion of gold reserves, after gauging market demand for its digital offering. With the collaboration between Royal Mint and CME Group expected to continue well into 2017, it looks like the trend toward digitization could be here to stay.

Analysts have suggested there could well be additional applications of this type of technology to cover other commodities, should the initial framework prove successful.

The announcement sees Royal Mint become the latest organization to embrace the blockchain, as it becomes an increasingly mainstream technology for financial and other sectors.

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