Blockchain firm Tradewind has launched a new digital gold trading and settlement platform that aims to simplify and speed up trading and reduce transaction costs.
TradeWind , which is backed by Sprott, Goldcorp and IEX Group, was formed in 2016 and is managed by a team of professionals with extensive experience in electronic trading, market structure, gold investment management, market operations, cryptography and blockchain technology. It has built a technology platform for digitizing the trading, settlement, and ownership of precious metals.
The platform, which went live on March 23, integrates a network of authorized liquidity providers and dealers. The Royal Canadian Mint will store the gold for Tradewind, using the company’s VaultChain blockchain as the authoritative record of title for ownership. The Mint will also contractually guarantee the option for physical delivery of the gold underlying the program to the network of authorized liquidity providers and dealers.
Customers will access the market through a network of authorized dealers and will be able to own VaultChain Gold in fractional quantities, in a segregated account directly on the Tradewind blockchain. VaultChain Gold will not be subject to the ongoing management and administrative fees associated with securities products like exchange traded funds, according to the company.
Matt Trudeau, president and co-founder of Tradewind, said they believe that the ownership and trading of vaulted precious metals will go digital, and their open-architecture platform will lead this transformation allowing market participants to quickly and easily adapt.
“Gold and blockchain technology form a uniquely compelling marriage, and we created our platform to enable the gold market to respond to a number of systemic challenges and remove prior limitations,” said Trudeau.
Sprott, a gold-focused money manager, owns approximately 20 percent of TradeWind and plans to use the platform as a dealer, but said it’s too soon to say whether it will migrate its physical gold trust onto the platform.
Sprott CEO Peter Grosskopf called the digitization of gold trading “the most important thing to happen to the gold market in the last several decades.”
“Gold has always been criticized as being an inefficient product, a lazy product, a product that’s hard to transact with,” Grosskopf said. “It’s almost as though the blockchain were invented for gold. The marriage of the two, I think it’s going to be incredibly powerful.”
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