12 Apr 2017

RMG a new digital gold standard available in 2017

The Royal Mint and CME Group have announced AlphaPoint and BitGo as the technology partners developing RMG, in partnership with CME Group. Launching later this year, RMG is a new digitised gold offering set to transform the gold market, utilizing distributed ledger technology to make it more cost-effective and providing increased transparency for traders and investors to trade, execute and settle gold.

AlphaPoint has been tasked with providing the technology for the RMG trading platform and BitGo is developing the secure blockchain infrastructure.

The innovative new product will see The Royal Mint issue RMG as a digital record of ownership for gold, on a custom blockchain that is singularly designed for the  security and digitization of a single asset.  All assets on the blockchain represent gold held in 100% reserve at The Royal Mint’s highly-secure on-site bullion vault storage.

The blockchain is now in alpha testing and transactions are being conducted end-to-end. Developers, businesses and researchers can now access, evaluate and test the open source components of the code by visiting provachain.com. The digital trading platform for RMG is in live testing with institutional investors and will be ready for use at launch.

Igor Telyatnikov, President & COO of AlphaPoint said: “This trading platform will provide a high performance and secure venue to buy and sell RMGs. We are excited by the response so far and welcome new financial institutions to engage for an early look.”

“There is a higher level of traceability and audit that comes with blockchain technology because participants are provided with a permanent immutable record of ownership and chain of ownership and custody,” Telyatnikov says.

“It provides a brilliant view into transactions, which often is obfuscated and opaque in traditional markets.”

Mike Belshe, CEO of BitGo, which has developed the blockchain code, says the multi-signature accounts that his company pioneered would be at the core of the security technology for RMG.

RMG is based on public key cryptography, which allows a host of users on the network to authorize and verify transactions. Multi-signature, Belshe explains, takes this form of authorization one step further with an additional private key being held by a trusted party such as a bank or a lawyer.

Mike Belshe explains the process: “When you want to make a transaction, you sign with your own key and then you hand it to the other guy on a completely different system and get them to sign it too.

“This has turned out to be quite effective and is generally regarded by security experts as being the safest way to deal with digital assets.”

Vin Wijeratne, CFO of The Royal Mint, said “Distributed ledger technology is a game changer and supplying gold on a blockchain has been something The Royal Mint has wanted to develop for some time. Developing a trading platform with CME Group will satisfy customer demands for faster, cost effective and secure ways to buy, hold and sell gold and complement our existing products. This landmark partnership allows us to combine the world’s leading mint, the best commodities futures trading platform globally and best in class technology.”