Gold is being traded on a blockchain network in China in an effort to legitimize the industry for domestic and overseas regulators – and a senior executive at one of the country’s biggest banks said that commodities like gold could soon be “digitized” and “circulated.”
Per Sichuan Online, the city of Chengdu hosted the Gold Technology Innovation Conference on September 23, where attendees were shown a 100g gold bar with a chip that “uses a unique algorithm to ensure information security,” stated its issuer, a Chengdu-based refinery named Great Wall Precious Metals.
The firm said it has issued a corresponding digital asset – presumably a non-fungible token (NFT) of sorts – on the Blockchain Service Network (BSN). The BSN is an ambitious nationwide and global blockchain interoperability network masterminded by major commercial banks in the Middle Kingdom, including the Bank of China and China UnionPay.
Great Wall Precious Metals explained that the blockchain platform ensures that data on sourcing, issuance, purchase, and so on is hosted on the BSN blockchain, making it tamper-proof. The firm added that its solution “solves the problem of traceability” in countries where regulators insist that tradeable gold is sustainably and responsibly mined and refined.
Experts at the event also added that blockchain technology can also “guarantee the security of online transactions of physical gold.”
And China UnionPay hinted that this may only be the start. The bank’s Zhou Yu, the senior director of its E-Pay Research Institute, stated that the industry’s “next step” could see blockchain technology used “to digitize gold” and “activate” the “circulation of digital assets” based on the precious metal.
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