The U.K.’s Royal Mint and Chicago-based U.S. derivatives market operator CME Group Inc. have announced a joint venture to build and launch Royal Mint Gold (RMG), a digitized gold offering launching next year that they say will “change the way traders and investors trade, execute and settle gold.”
The Royal Mint will issue RMG as a digital record of ownership for gold stored at its vault storage facility and CME will develop and operate the product’s digital trading platform that will operate 24 hours a day, 365 days a year. Blockchain technology will be used to facilitate the new venture.
The digital model will allow investors to own the underlying gold, with the option for converting that ownership to physical gold, without the storage costs and management fees incurred in traditional physical spot trading.
Up to US$1 billion worth of RMG could be issued to start, and more will be issued based on market demand, the firms say. The product will be offered through investment providers.
“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,” says Vin Wijeratne, chief financial officer of the Royal Mint.