Digital Gold Has Arrived: Blockchain Tech Allows Investors To Own Fractional Gold
(Kitco News) - The gold market has taken one giant leap in to the futures after Tradewind Inc. officially launched a new digital gold platform Monday.
The new gold exchange has been in the works for more than two years, with the company receiving support from major players in the gold industry, including Sprott Inc and Goldcorp Inc.
The firm said that its new digital exchange is “expected to revolutionize the trading, settlement, and ownership of physical gold.”
“The Tradewind blockchain can directly link precious-metals producers, custodians, market makers, dealers and investors,” said Mike Haughton, co-founder of Tradewind. “This will unlock opportunities for market participants to conduct business more efficiently, securely, and profitably across existing business operations, and to enable future utility including provenance tracking and collateral management.”
According to a press release, through blockchain technology, investors will be able to buy fractional quantities of gold through the new platform. The gold will be vaulted by the Royal Canadian Mint. A network of authorized dealers will provide liquidity for the new exchange.
“The Royal Canadian Mint will facilitate the registration of investment-grade physical gold on the Tradewind platform as VaultChain Gold by confirming that it is in possession of the physical gold that underlies the platform,” the company said in a press release. “Together with the authorized liquidity providers and dealers, the Mint will recognize the Tradewind blockchain as the authoritative record of title for ownership. The Mint will also contractually guarantee the option for physical delivery of the gold underlying the program to the network of authorized liquidity providers and dealers.”
According to media reports, Matt Trudeau, president and co-founder of Tradewind, said that one of the advantages of the revolutionary technology is lower investment costs. The company explained that VaultChain Gold will not be subject to the ongoing management and administrative fees associated with securities products like exchange-traded funds.
Instead of charging administration fees, Tradewind will make its profits through exchange fees.
According to reports, Sprott owns about 20% of the new platform and plans to be a dealer on the exchange. Tradewind also received an investment from Goldcorp in 2017 when it was one of the finalists in the mining’s giants’ inaugural ‘#Distruptmining showcase.