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As the use cases of blockchain are increasing by the day, traditional finance and related markets are slowly opening up to the possibility of distributed ledger technology (DLT) solutions. The London Bullion Market Association (LBMA) is planning to employ distributed ledgers for gold tracking. The new, modernized version of its gold movement tracking technology will help improve transparency manifold.

As the LBMA gears up to add blockchain technology to its gold tracking process, it aims to eliminate illegally mined or traded yellow metal from its supply chain. The association could be considering this solution after news of billions of dollars’ worth of smuggled gold entering a US-based refinery broke last year. All the gold originated from South America.

Following this, the LBMA asked its 144 members in March to propose new plans to track gold and prevent forgery in the market. Most of the top banks, dealers, and gold refiners of the world are members of the LBMA, which makes their decision to rely on blockchain a crucial development in the space. Other commodities sectors are quickly diving into the blockchain sector as it helps in improving efficiency and transparency across the supply chain.

Recently, global technology giant IBM partnered with shipping behemoth Maersk to create a new trading platform based on blockchain that could help in improving the efficiency of its systems. Diamond companies, including De Beers, are already using the technology to track diamonds and ensure they are fair trade.

IBM was reportedly involved in the process of sending proposals to the LBMA. But IBM has not commented on the matter yet. The association received a total of 26 proposals, as per executive board director Sakhila Mirza.

According to Mirza, LBMA will focus more on setting standards for services and creating an oversight committee to monitor and approve technology providers, instead of working with particular companies. She explained the decision further, saying:

“We need to set up criteria and standards that help us understand what a credible blockchain solution is. Once those have been appropriately established, the result would be a selection of service providers that meet the minimum standards.”

The LBMA didn’t specifically insist on the use of blockchains, but at least 20 out of the 26 proposals focused on using the technology to manage the gold supply chain. The first draft of the association’s standards for tracking systems will be ready for consultation in the first half of 2019, and the process of approving service providers will start later next year.

London Gold Association to Approve Blockchain Trackers was originally found on [blokt] - Blockchain, Bitcoin & Cryptocurrency News.

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