Tradewind Markets Implements Blockchain Provenance System For Its First Metal Trade
Financial technology firm Tradewind Markets Inc. declared its first-ever trade of high-grade refined metals utilizing its Tradewind Origins distributed ledger blockchain provenance management service.
The trade among Agnico Eagle Mines and Bank of Montreal, reinforced by the ‘Royal Canadian Mint,’ consisted of 5,000 ounces of gold, valued at about $7.4 million.
The transaction took place via the delivery of the gold from Agnico Eagle’s flagship LaRonde mine, placed in Quebec, Canada, to BMO. The Royal Canadian Mint will polish the gold from Aginco and tag the shipment with Aginco’s self-reported provenance data, including the source of the metal.
All of this data and supply chain information, as well as the transfer of ownership credits, will then be registered on Tradewind’s blockchain, finishing the formal assumption of purchase by BMO.
Tradewind Markets started Tradewind Origins, its blockchain provenance service, in November to utilize blockchain technology to provide reliable digital transaction protection for valuable metal supply chains in discussion with the Royal Canadian Mint.
Blockchain technology operates by broadly distributing a ledger of transactions among multiple parties, and deals are only attached after severe cryptographic proof-of-work and agreement between parties.
With numerous examples of the ledger shared and cryptographic security, data saved on a blockchain is remarkably challenging to tamper with, and each block utilizes the cryptographic hash of the preceding one in the chain to verify its authenticity.
“This is a long-awaited development for precious metals markets,” stated Michael Albanese, chief executive of Tradewind Markets. “By delivering meaningful data on how, when, and where these assets were sourced, we are providing the ecosystem with greater visibility into the precious metals global supply chain. By differentiating their metals, companies are unlocking the potential value of their production. Tradewind is proud to bring this new level of transparency to financial markets.”
Suppliers of valuable metals, including recyclers and miners, register a lot of information about the origin and supply chain of raw materials utilizing Tradewinds Origins ere delivery to a refiner.
This information is then saved in Tradewind’s blockchain as a transaction. Upon shipment, the receipt of the distribution is reported and verified on the blockchain as well. This lasts through the refinement process, accommodation, and ultimately selling to other companies.
By registering each step in the supply chain, the product can be tracked, through the blockchain, back to its origin. That helps ensure not just the quality of the product, but also the probity of its origins.
For suppliers, this decreases supply mistakes that could be caused by bungled paperwork. It also increases trust in the supply chain for users. And for regulators, it gives deep transparency into the complete lifecycle of metals from the quarry to the factory floor.
The management of precious metals lacks ethical sourcing, which means determining that they were mined or imported according to the law.
Many companies have started testing with blockchain supply chains to give reliable documentation for regulatory compliance. They include Ford Motor Co. and IBM Corp. tracking cobalt sourced from the Congo and Volkswagen Group and Minespider GmBH, demonstrating ethical sourcing for battery materials.
“Through their adoption of the Tradewind platform, BMO has improved precious metals producers’ ability to differentiate our product for the first time,” stated Ben Lam, treasurer at Agnico Eagle Mines.
“Meanwhile, precious metals investors and downstream purchasers, such as luxury goods companies and jewelers, will be able to purchase from selective jurisdictions and sources, such as those adhering to the highest ESG standards.”