The Royal Mint, the institution responsible for producing the UK’s coins and holding gold, has entered the cryptocurrency world by creating its own digital currency. The Blockchain-based coin is called Royal Mint Gold (RMG) and represents gold stored in The Royal Mint vault.
According to the data from the Royal Mint website, RMG is an alternative way to invest in and trade physical gold. It aims to provide the investment performance of the London Gold Market with the transparency of an exchange-traded asset.
RMG represents direct ownership of fine gold, held in the form of segregated London Bullion Market Association (LBMA) Good Delivery bars and smaller gold bars. All gold is held within the highly secure storage facilities inThe Royal Mint’s vault and The Royal Mint acts solely as sub-custodian and has no claim on the gold.
To create RMG, the Royal Mint has partnered with CME Group, the world’s leading and most diverse derivatives marketplace. Both The Royal Mint and CME Group are synonymous with integrity and accuracy and both are committed to innovation and security, using a blockchain ledger to record all RMG transactions.
The RMG project was first unveiled by the Royal Mint in December 2016. In April, 2017, Royal Mint began testing Blockchain gold trading platform. Now the Royal Mint Bullion, the Royal Mint company that sells physical gold, is the first company to allow customers to hold gold-backed assets on Blockchain.
Tom Coghill from the Royal Mint’s RMG division, said: “We already sell physical gold through our Royal Mint Bullion business and we sell coins and bars. In this sense what we’re doing here is simply making that a digital business and allowing for our clients to be able to hold gold for the first time on a blockchain basis. The difference between what we’re doing and what other crypto digital assets is that we’re a physical tangible asset.”
According to Coghill, one RMG coin is equal to one gram of gold. “It’s real gold you’re holding when you’re holding our RMG.”
Bitcoin has been compared to gold as it also is seen as being most useful as a store of value. However, a recent report published by the World Gold Council (WGC) declared that though Bitcoin saw a higher growth in value in 2017, gold would remain an important store-of-value investment.
“Gold has probably had an argument that it’s been a store of value for 6,000 years, bitcoin’s a bit younger and the future of bitcoin is uncertain,” Tom Coghill said.
The UK is not the only country to create a gold-backed cryptocurrency. Last week Australia’s Perth Mint was set to develop its own cryptocurrency backed by physical precious metals. Perth Mint sees it as a way to increase interest in investing in Australia.