A financial company enabling digital trades for physical assets, Tradewind Markets Inc., today announced the launch of a platform for provenance management of precious metals such as gold and silver.

The objective of the Tradewind Origins platform is to provide a distributed ledger blockchain-based solution that can track the supply chain for precious metals from the moment it is mined from the earth until it is delivered to the final customer. The platform was designed in consultation with major industry participants, including the Royal Canadian Mint and other large mining corporations.

“We have worked at length with the industry’s major players and our network of partners to build a provenance application that unlocks the latent value of precious metals by delivering meaningful data on how, when, and where the assets were sourced,” said Michael Albanese, chief executive of Tradewind Markets. “We are working to establish best practices and ethical sourcing of materials, and we’re setting a standard for innovation within physical and alternative asset classes using blockchain.”

Blockchain technology provides a data tracking layer that is immutable after a transaction is added. Since every transaction can be added to the blockchain as it happens, such a system works well for supply chain tracking. Every time an event happens to minerals, it can be recorded.

For example, vital stats can be attached to a batch of raw ore after it is mined and placed for shipment to a processing plant. Once processed, that ore then becomes material that can also be tagged with transactions and data, including its weight, purity and plant where it was processed. Eventually a lot of precious metal is put in a warehouse ready to be sold to a user such as a component manufacturer, jeweler, mint or reseller.

The entire journey of the metal, from the mine to the warehouse, can be tracked through the blockchain at whatever level of granularity the supply chain manager desires. That means companies can more easily show appropriate sourcing to regulatory agencies with less tedious paperwork. Using a blockchain, they can reveal as much information as needed for regulators to see everything is in order and audit supply chains, while still protecting sensitive industry information.

“As a major global producer, Agnico Eagle enthusiastically supports innovations that enable market participants to engage in precious metals markets while adhering to social and environmental best practices,” said Ben Lam, treasurer at Agnico Eagle Mines.

The need for regulatory compliance and trust in ethical sourcing for precious metals and minerals is strong in the mining industry. As a result, blockchain technology has been piloted by numerous companies including the Open Mineral and ConsenSys Inc. supply chain logistics platform Minerac, Ford Motor Co. and IBM Corp. tracking cobalt sourced from the Congo and Volkswagen Group and Minespider GmBH building a blockchain to track ethical sources for raw materials for batteries.

“We want to ensure that transparency is met from stage one and Tradewind Origins represents an important step in this direction, providing our customers and stakeholders with a platform to confirm the quality and source of our goods,” Lam said.

Tradewind users can be assured that metals on the platform are ethically sourced because of a partnership with the Royal Canadian Mint. The agency can accept the delivery of metal sent from suppliers, approve or reject the supplied Tradewind Origins information and register the metal on the Tradewind platform.

As a result, buyers and sellers who use the Tradewind platform can be certain that the supplier and the refiner alike have adhered to industry standards and regulations.

Image: Tradewind Markets