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Vancouver-based gold production company Goldcorp Inc. made a 3000 oz gold deposit (valued at $4 million) into Tradewind Markets’ VaultChain platform in what symbolizes an important landmark for blockchain’s ability to store and track precious metals in an institutional setting.

The deposit forms VaultChain’s ‘genesis block’–in other words, the first block on a blockchain. Using VaultChain, Goldcorp will be able to sell gold directly to brokers and banks.

Blockchain Could Reduce the Margin of Error in Gold Settlements

Tradewind is hoping that its new platform will address what it sees as important problems in the precious metal industry in its current form. According to a Reuters report, Tradewind believes that trade settlement times are too long and ownership records aren’t transparent enough, factors that lead to higher instances of error.

If all goes according to plan, the Tradewind platform will lower costs, and increase and efficiency, while increasing liquidity. At the same time, blockchain’s immutable distributed ledger technology will allow for the creation of “forgery-proof” ownership records.

“We believe that our technology will enable gold producers like Goldcorp to overcome existing limitations and move into the electronic age,” said Matt Trudeau, President of Tradewind.

Showing similar sentiments, Goldcorp president and CEO David Garofalo said that his company “[believes] physical gold stored on a blockchain will increase the utility of the commodity and, ultimately, drive value in the price of gold.”

“We believe Tradewind has the potential to change the gold investment industry like the introduction of ETFs (Exchange Traded Funds) did over ten years ago,” said Garofalo.

Gold and Blockchain May Have a Bright Future Together

There have been a number of blockchain firms who have worked to create chains that interact with gold and other precious metals. Emergent Technology Holdings is planning to launch a blockchain-based gold supply chain in the first half of this year.

Emergent’s focus is slightly different–while liquidity and transparency are equally important on the platform, the company is hoping that its chain will help buyers acquire gold that has been responsibly sourced.

In an email to CNBC, Emergent’s Chief Commercial Officer, Mitchell Davis, said that “Emergent is looking to build an ecosystem.” The company tracks all the gold that it produces directly from its source mine, “[connecting all steps in the supply-chain.”

In a way, the emergence of an increasing number of digital currencies backed by hard assets is a sign that the market may be moving away from the volatile coins that its known for and toward assets that can be counted on long-term.

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