HSBC Takes Stab at Using Blockchain To Modernize London's Antiquated Gold Market

One of the world's top bullion banks is bringing blockchain to the antiquated London gold market. From a report: HSBC has launched a platform that uses distributed ledger technology to tokenize ownership of physical gold held in its London vault, Mark Williamson, global head of FX and commodities partnerships and propositions, said in an interview. The new system creates digital tokens that represent gold bars, which can then be traded through the bank's single-dealer platform. What sets HSBC apart is its clout in the bullion market. It is one of the world's largest custodians of precious metals and one of four clearers on the London gold market, where over $30 billion of the metal changes hands every day.

Around 698,000 gold bars are stored in vaults in the Greater London area, valued at around $525 billion, according to the London Bullion Market Association. Despite its vast size, London's gold market still relies heavily on manual record keeping and trades entirely over-the-counter. Using blockchain technology makes the process 'quicker and less cumbersome' as clients can more easily track the gold they own through the platform, down to the serial number of each bar, Williamson said. HSBC plans to eventually expand its system to include other precious metals, he added.

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