The London Bullion Market Association is looking into whether blockchain can reduce money laundering in the spot markets.
One of the most interesting potential use cases for Bitcoin (and increasingly other cryptocurrencies) is that of a safe haven asset. When people think that the economy is going to take a turn for the worse, they’ve got a handful of options as far as what to do with their money is concerned. Cash is one, but there’s no return available on cash and, indeed, it depreciates in value over time through inflation. Equities are another, but you don’t want to be in equities when the market crashes. Precious metals are another and these are where money tends to flow in bad times – especially towards gold.
Safe Haven Bitcoin
The price of gold rises when the price of stocks falls. In this sense, it’s a safe haven asset, or a risk off asset as some people call it.
There’s been some suggestion that bitcoin could replace gold as a safe haven asset over time, especially at the fringe of the market (i.e. the more technologically savvy individuals).
Now, it seems, the gold market is looking to capitalize on the technology that underpins what many view as its primary competitor in the risk-off space – blockchain.
LBMA Integration
As per a recent Bloomberg report, The London Bullion Market Association, the entity in charge of the biggest market for spot gold in the world, is looking to integrate blockchain technology into its operations in an attempt to add accountability and transparency to the industry and, specifically, in an attempt to crack down on money laundering.
Sakhila Mirza, who holds an executive board director position at the LBMA, said this on the plans:
Blockchain cannot be ignored… Let’s understand how it can help us today, and address the risks that impact the precious metals market.
This isn’t overly surprising, of course. The potential application of blockchain technology to the asset ownership and tracking use cases has long been an application touted as being a key driver behind mainstream (enterprise-level) adoption.
To see an entity as large as LBMA announce an active move into the space, however, is a big deal for blockchain technology adoption as a whole.
Keep in mind that this isn’t necessarily a validation of bitcoin as an asset and it’s safe to assume that the LBMA isn’t overly keen on the use of bitcoin as a risk-off/safe haven asset, but it’s a step forward for the space and one that could help ease the current negative sentiment that’s putting pressure on crypto prices across the board.
What do you think about the LBMA’s potential adoption of blockchain? Can bitcoin be a valid safe haven asset? Let us know below!
Image courtesy of Wikimedia Commons, LBMA
The post Blockchain Technology Could Help The London Bullion Market Association Stop Fraud In The Markets appeared first on Bitcoinist.com.
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