Euroclear to apply blockchain to gold market

Rage Review : Euroclear, one of the world's largest settlement venues, has tried to use blockchain technology for the first time to create a new settlement system for the London gold market, realizing a blockchain network that tracks and settles transactions in near real time. At the same time, it has cooperated with the US startup itBit to explore ways to modernize precious metal trading. The gold market also has a great demand for tracking ownership. Although blockchain is an exciting technology, attempts to apply it to real large markets and payment systems are still limited.

Translation: Nicole

Euroclear, one of the world’s largest clearing houses, is experimenting with blockchain technology to create a new settlement system for the London gold market. The Belgian clearing house, which has a market value of €27 trillion in bonds, bonds, funds and consumer derivatives, has partnered with US startup itBit to explore ways to modernize precious metals trading.

FirstFT is our new daily email newsletter featuring the best stories from around the network. The team is working on how to govern the blockchain-based gold clearing and settlement network Bankchain.

Euroclear has so far been sceptical about rumours that it is pushing blockchain technology, the digital ledger that underpins the bitcoin cryptocurrency, into capital markets. It argues that electronic ledgers that continually maintain the “blocks” of verified records at the heart of a blockchain could play a role in broadening the role of securities custodians.

Angus Scott

Angus Scott, Head of Product Strategy and Innovation at Euroclear, said:

Unallocated gold settlement is a market that banks are heavily invested in and one that needs to be modernised. “We have established a consultative group that recently met to discuss the creation of this service, with the aim of improving the efficiency of the London bullion market.”

Although blockchain is an exciting technology, attempts to apply it to truly large markets and payment systems are limited. Recently, the DAO, a decentralized autonomous organization using the Ethereum blockchain, was hacked, resulting in the removal of approximately $60 million in Ethereum digital currency.

The industry tried to address the issue, but the hacker argued that it was the nature of the smart contracts that caused the hack, not the code.

ItBit has opened a new London operator to focus on trading and settlement in the UK gold market. The two operators are in talks with banks and brokerages to create a blockchain network that can track and settle transactions in near real time.

Chad Cascarilla

Chad Cascarilla, CEO of itBit , said:

“There is also a big need in the gold market to track ownership.”

He said:

“This is a market that needs to be changed. It is a bilateral decentralized market where distributed ledgers can benefit immediately.”