In the blockchain era, all kinds of physical resources are doing the jump in bits and bytes. Blockchain is able to track transactions of all kinds and create a connected record – and that blockchain is rapidly being extrapolated from the clamor of cryptocurrency to which it once was inextricably linked.
When it comes to providing chains, supporters say blockchain – in particular, distributed ledger technology (DLT) – he keeps his promise. In terms of criticality, some observers state that the blockchain has the potential to disrupt the way the business is done, as the goods are bought and placed on the market, especially where the logistics are concerned. After all, it is obvious that the more links there are in the supply chain (widespread, and even global in nature), it is more difficult to guarantee absolute confidence in production methods, product quality, transparency of payments and regulatory compliance.
To this end, the gold or, in this specific case, the activities of extraction and marketing of gold – the production and the supply of the yellow metal that has been coveted and used as currency for centuries – is also finding a niche via blockchain.
Emergent Technology Holdings (EmTech) has developed blockchain technology that traces where gold comes from and where it is going and has introduced a digital token known as G-Coin, a digital title owned by the physical gold traced on the blockchain by EmTech. Think of it as a blockchain that records every phase, from mining to the final market to digital wallets.
This is the big picture, like Chief Commercial Officer Mitch Davis at EmTech has explained. The end result is a transformation of processes that extend back centuries, in an attempt to ensure both efficiency and ethics.
Davis said that one of EmTech's key distinguishing features is the company's move to embrace what is known as "responsible sourced gold", where demand and gold premiums extracted from such practices are on the rise. It is easier said than done, however, to ensure that gold is indeed what it purports to be, in the quantity and quality stipulated, as well as extracted and refined in a way that conforms to strict environmental rights, human rights, industrial, financial and legal standards.
"There are many players participating in the gold supply chain," Davis told PYMNTS, taking note of the miners, refiners, transport ducts and buyers out there, where currencies and the metal itself go through the boundaries. "And it is necessary to provide the buyers – be they investors, individuals, institutions or producers – with the absolute guarantee that the gold is supplied in a responsible way".
"The industry can benefit from an end-to-end solution that automatically records the provenance and reliance to create a permanent record," added Davis, adding that record retention efforts are too often made by manual means, conducted among thousands of participants.
How does it work
A cryptographic seal (CryptoSeal) is used to trace the precious metal in every phase of the supply chain, from the beginning to the end – through initial mining, logistics, refining and beyond. The CryptoSeal is scanned using an Android device, Davis said.
"When you scan the gold, you create both a public and a private key," he said, and the keys in turn become part of an authorized blockchain. The record is immutable and irrefutable in every phase of the process and completely verifiable. Accordingly, Davis noted, all interested parties are able to ascertain that the gold was bought responsibly and is 99.99% pure.
He added: "At the end of the Responsible Gold supply chain process, we form G-Coin tokens, which are digital property certificates for physical gold.Tokens are completely redeemable.At any time, you can request 39; physical gold is sent to the address you have named. "
The California-based company has established close relationships with leading gold industry leaders – including Yamana Gold, Valcambi sa and Asahi Refining – create G-Coin tokens, structured so that each token is equivalent to one gram of gold.
The technology, which embraces the blockchain and the G-Coin token, is built to foster liquidity in trading – and it should be noted that traditionally, gold has been among the most illiquid of investments, with high transaction costs and spread between bid / ask. G-Coin, Davis said, is able to manage thousands of simultaneous transactions for liquidation purposes and with operations carried out 24 hours a day, 7 days a week and in real time.
There is also a complete customer knowledge process (KYC), he said, which also extends to the fact that the participants are buyers or sellers, and all participants must create digital portfolios dedicated to trading G-Coin tokens. EmTech announced this week that it is introducing identity and biometric hashing technology into KYC processes across all of its platforms.
The combination of real-time payments, asset-backed securities and immutable records can attract investors from emerging markets, sovereign wealth funds and producers.
New cases of use
Davis said that G-Coin tokens can promote more cases of use within the realms of money and commerce, as it can protect against the vagaries of politics and economic recessions. The volatility has marked the Argentine peso and the Turkish lira in the last months, and in periods of extreme stress and inflationary pressures, the value of some currencies can fall from 30 to 50 percent.
"We see an opportunity for G-Coin tokens in emerging markets as an alternative to local currencies and as a higher value reserve with greater liquidity," Davis said, adding that some countries, such as Nigeria, are already embracing coins. and digital encrypted. However, he cautioned that the G-Coin tokens are not, in fact, cryptocurrency, due to their asset-backed nature and the fact that "we comply with the regulations in every country where we operate and will operate".
He also said that the ecosystem should prove interesting for B2B transactions, which are well on their way to exceeding $ 210 trillion in the short term. Businesses dealing with cross-border transactions can conduct exchanges faster and more transparently, Davis said, particularly valuable in those places where traditional suppliers, such as wire transfers, can take days to settle.
"We are expanding the traditional gold purchasing base," he told PYMNTS. "With the G-Coin B2B portfolio, companies can move G-Coin tokens across borders in real time, without transaction costs." Treasury departments can hold G-Coin tokens, rather than local convertible currencies, and collect, if necessary, on its maturities, based on the overall management of the float in the liquidity pools.Our ecosystem is built to enhance cross-border efficiencies, with the security of a real and redeemable resource behind it ".