Digital Trust for Precious Metal Supply Chains

By: The R3 Team

CordaCon 2020 featured a presentation by Swiss start-up aXedras on its Bullion Integrity LedgerTM, a Corda-based solution that digitalizes the gold bullion supply chain all the way from miner to investor. Founded in 2018, aXedras is an independent software developer that focuses on applying blockchain to benefit the precious metals markets, starting with gold.

The challenges

In the gold bullion market and industry value chain, trust between participants – and in the integrity of the product – has traditionally been based on personal relationships. But this is no longer enough, with the rising importance of sustainability and human rights meaning industry players are often required to demonstrate the integrity and provenance of the physical product. The problem is that the paper-based and largely manual nature of the industry’s documentation and processes means proving provenance is difficult, slow and expensive. So, there’s a pressing need to digitalize processes and proof of provenance along the value chain, while enabling all participants to share a single version of the truth in a seamless and confidential way. Having evaluated the potential platforms to enable such a solution, aXedras chose Corda Enterprise, primarily because of its strong privacy capabilities and peer-to-peer communications.

“The Bullion Ledger starts at the beginning where the material is coming from. So, we start at the source, whether that be mined or recycled.” – Urs Roosli, CEO, aXedras

The solution

aXedras knew that any solution to gold’s pain points around integrity, provenance, reputation and efficiency would need to involve all industry participants, both upstream and downstream – including suppliers, refiners, logistics companies, traders and banks. So the company worked with all these players in developing the Bullion Integrity LedgerTM: a Corda-based application that digitalizes the gold bar and the entire end-to-end process and value chain around it – boosting integrity and efficiency while maintaining confidentiality for all participants.

The Bullion Integrity LedgerTM starts supporting the gold value chain with digital traceability from the very beginning, with the source of the raw metal itself – be it from a mine or recycled from existing products. Then it continues through the transportation to the refiner, a stage where traceability and integrity are paramount because of the need to trust the product’s provenance. From the refiner, the Bullion Integrity LedgerTM accompanies the product downstream into the circulation stage with banks, investors and industrial customers such as jewelers. Here integrity remains vital for maintaining trust, the confidentiality of all parties must be safeguarded, and the platform’s digitalization enables efficient processes. All of this is achieved through Corda’s unique capabilities.

The outcomes and benefits

The aXedras Bullion Integrity LedgerTM ecosystem is now up and running in its pilot phase with a select grouping of the gold industry’s leading refiners, logistics companies, banks and traders. Participants are experiencing the benefits at first hand, including better visibility of provenance throughout the value chain and substantial time and cost savings. Looking beyond the pilot phase, aXedras plans to double the number of participants in the ecosystem, onboarding additional stakeholders such as mines and recycling companies, and launching new modules to meet users’ requests. Plans are also in hand to roll out the existing downstream and upstream products globally.

To learn more, watch aXedras’s presentation at CordaCon 2020.