Friday, September 9, 2016

Anti-Wall Street group seeks to create a new transparent gold exchange using blockchain technologies

In his now famous book, Flash Boys, author Michael Lewis took real Wall Street individuals and fictionalized them to paint a picture of just how manipulated the paper trading markets really are,

Now those who were represented in Lewis's book are seeking to go head to head against the fraudulent banks and exchanges by creating a new gold exchange that would run with full transparency, and use blockchain technology to accomplish this.

IEX Group, which rose to prominence with its bid to shake up stock trading in the United States, now aims to do the same in the more than $5 trillion-a-year gold market with a new exchange being created by its spinoff TradeWind Markets, a board member of the new venture said on Tuesday. 
The protagonists of Michael Lewis's book, "Flash Boys: A Wall Street Revolt," are planning a gold exchange that would use elements of blockchain technology to improve transparency and the clearing and settling of trades, said Matt Harris, a managing director at Bain Capital Ventures. Bain has an investment in IEX. 
Blockchain is a tamper-proof shared ledger that can automatically process and settle transactions using computer algorithms. 
TradeWind Markets began as an internal project of IEX and was spun off as a separate firm earlier this year. In June, the startup raised $9 million, according to a regulatory filing with the U.S. Securities and Exchange Commission. A person familiar with the operation who asked not to be identified because the plans are not public, said the funding came from IEX and Sprott Inc, a Canada-based investment firm that manages physical bullion funds. A lack of transparency is one of the problems that makes the gold market ripe for change, said Harris, who is on TradeWind's board. - Reuters
The introduction of the Shanghai Gold Exchange in Chain last year changed the game for physical gold trading, and created a crack in the long-standing Western control over the gold price.  And with the advent of a new and trusted gold exchange being built that would be outside the controls of the banks that run them now, and functioning on blockchain technology, it could cause miners, refiners, and producers to move away from contracts and delivery with London and the Comex and instead sell metals directly on this new exchange, allowing prices to rise and fall according to the free market, not price manipulations.


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