The Gold Bar Integrity programme (GBI) – jointly launched by LBMA and the World Gold Council in March 2022 – aims to digitally monitor gold moving through the global supply chain by confirming provenance and providing transparency over the chain of custody.
Over 30 participants took part in the pilot across 13 locations including UK, Europe, USA, Canada, Australia, and South Africa – and saw 16 test cases complete. Now that the pilot has ended, we can share some initial findings and information on next steps.
Throughout the course of three different simulation flights run by the two service providers, the participating companies (mines, refiners, carriers, vaults/banks) across the globe interacted with each other and jointly simulated upstream- and downstream-related processes on the blockchain-based solutions.
These simulations showcased how both platforms digitalised the gold value chain, including registering and exchanging data among parties in an efficient and secure manner. It illustrated the integration of provenance data from the source of origin and traceability of chain of custody per refined product. The handling of edge cases was also tested, such as duplicate detection or exit / re-entry of refined products – and bulk uploading of material and bars for all actors.
The pilot has been extremely useful in helping to understand the technology and its uses for the precious metals supply chain. It highlighted how the industry can collaborate on a shared solution to address a shared problem – confirming provenance and providing chain of custody transparency.
Despite the conclusion of the first pilot phase, some participants are still keenly running scenarios between themselves to test ‘real world’ scenarios while the vendors have the networks still available.
It’s become even clearer that a further governance and industry consultation is required for developing an industry standard taxonomy, dispute resolution process, and developing best practice for the reintroduction of material from outside the country of origin.
The pilot has also revealed longer term opportunities, which include the market expansion of the platform to include other gold products including secondary markets, other precious metals, ESG reporting, KYC requirements, and the due diligence surrounding the onboarding of customers.
LBMA and the World Gold Council will continue to develop the initiative and will identify specific use cases that the technology can support – so look out for further announcements.