About a month ago, the CME Group along with Thompson-Reuters ended their contract early with the LBMA in which they ran the daily benchmark auctions to fix gold prices in the Western markets. And while there has been speculation as to why they chose to summarily leave their five year contract with the LBMA two years early, there have been few evidenced reasons for their cutting ties with the daily gold fix.
On April 12 the Chicago Mercantile Exchange (CME Group) announced they were in the final stages of testing for a new gold trading platform that will run using Blockchain technology, and will open up the buying and selling of paper (digital) gold that is reportedly backstopped using physical gold from the British Royal Mint.
Pretty soon, pension funds and other institutional traders will be able to buy and sell gold using a trading platform inspired by the digital currency bitcoin.
U.S. futures and options exchange CME Group announced on Tuesday that it is in the final stages of testing a platform for spot gold that’s based on the blockchain, the pioneering distributed-ledger technology that powers the bitcoin network.
CME built the platform in partnership with the U.K. Royal Mint, which has helped supply $1 billion in gold bullion to back transactions executed on the network, and blockchain company AlphaPoint.
The platform isn’t expected to launch until later this year, according to news releases from the CME Group and AlphaPoint.
Physical gold will be represented on the platform by tokens called RMGs—short for Royal Mint Gold. The platform is the first digital gold product targeted at institutional investors, and its also the first to work with a government entity, according to the releases. - Marketwatch