New Legislation Calls for All Gold Mined in Brazil to Be Tokenized on a Blockchain
Originally posted by CryptoGlobe on Aug 13, 2022.
A new bill in progress in Brazil calls for all gold mined in the country to be tokenized on a blockchain, as a way to bring transparency to the sector and make irregular mining difficult.
The project was presented by Federal Representative Joenia Wapichana, who highlights that about half of the metal mining in the country comes from illegal operations. She highlighted:
This is practically half of the national production and most of this gold came from the Amazon.
As reported by Brazilian website Boletim Bitcoin, gold mining has a major environmental impact, as it can be responsible for contaminating soil, groundwater, and rivers through the release of chemicals and heavy metals:
“These operations are accompanied by mercury contamination, violence and deforestation, as has been frequently reported by the national and international press, and by civil society organizations that fight for the protection of the forest and the guarantee of indigenous rights,” explains the bill. The project aims to establish new regulations for the purchase, sale, and trading of gold in the country, which would then be registered on a blockchain. The policymaker added:
To improve inspection and provide transparency to the sector, it is also established here that the National Mining Agency implement a single digital system, with secure records, using blockchain technologies, to consolidate all data and processes of mineral operations with the additional electronic records and documentation on transactions and sales, which will even allow you to create alerts for inspection.
No technical details were provided about the implementation of the project, nor which blockchain network should be used for this operation.
Asset tokenization is one of the great utilities provided by blockchain technology. On public blockchain networks, any company or institution can issue tokens that represent different financial assets, such as commodities, stocks, and other securities. The tokenized gold market is gaining more and more space in the world. Paxos Gold (PAXG), the precious metal-backed token issued by Paxos, currently has a capitalization of more than $600 million, while competitor Tether Gold (XAUT) has a $440 million market capitalization.
Image source Featured image via Pixabay.
Disclaimer The views and opinions expressed by the author, or any people mentioned in this article, are for informational purposes only, and they do not constitute financial, investment, or other advice. Investing in or trading cryptoassets comes with a risk of financial loss.