Responsible Gold Coming To A Portfolio Near You - Tradewind
Fin-tech start up, Tradewind Markets has announced a new addition to its digital gold and silver exchange, Vaultchain Gold. The platform will now include a provenance application, which will allow traders and investors to see where their gold came from and how it was produced.
Fraser Buchan, co-founder of Tradewind, said in an interview with Kitco News that the supply chain information will now be part of platform’s digital record thanks to the use of blockchain technology. Not only does the new application add transparency to the gold market, but it also gives investors confidence that they are buying responsibly produced gold.
“There is growing demand for reliable information about the source of precious metals, and for a solution that allows responsible actors to clearly identify themselves and capitalize on the value of best practices.” Mr. Buchan said. “Given the full scope of functionality available on our platform - trade execution, custody, and now provenance - we are uniquely well positioned to help the industry transition to more efficient, technology driven operating models.”
David Stephens, VP Corporate Development at Goldcorp, agreed with Buchan, saying investors are becoming a lot more interested in where and how companies are producing gold. He added that the gold market has been “crying out for this type of providence mechanism.”
For example, gold placed on the digital VaultChain Platform could be identified as coming from a specific mine, like Goldcorp’s Red Lake Mine in Northern Ontario. In late March, the mining company placed 3,000 ounces of gold on the platform as the “genesis block,” the first block in a blockchain.
The mining sector has suffered significantly from the perception that it is not environmentally friendly; however Stephens said that operations have drastically changed over the years and companies are paying more attention to environmental issues like water usage and even community engagement. He added that a lot of companies take pride in producing gold responsibly.
“A lot of companies are going very good things but aren’t getting recognized for their efforts,” Stephens said. “This new application changes all that.”
Buchan noted that Environmental and Social Governance (ESG) policies are having a bigger impact on investor choices and in investment portfolios. He added that its time the gold market embraced these ideas.
Stephens added that while the idea of responsible gold is still relatively new for the investment market, it is a growing trend in the jewelry sector as consumers are starting to pay more attention to where their gold comes from.
“We think it’s only a matter of time before investors embrace the idea of responsible gold,” he said.
Not only are miners calling for more transparency in the marketplace but refiners are also asking for this.
“Good corporate governance now is not just about your providers but now about your providers’ providers,” said Stephens.
Grant Angwin, President of Asahi Refining, said that the new technology will help them to continue to deliver best in class service to our customers.
“Information in the Gold supply chain is disorganized, managed across disconnected databases and systems, and is often unreliable,” said Grant Angwin, President of Asahi Refining. “The Tradewind platform helps to solve for this issue, efficiently tracking the different counterparties who control physical metal, and allowing owners to trace the provenance of the metal through the network.”