LONDON, Nov. 29, 2016 /PRNewswire/ -- The Royal Mint, the world's leading export mint, and CME Group, the world's leading and most diverse derivatives marketplace, today announced a collaboration to transform the way that market participants can trade gold.
The Royal Mint, a 1,000-year-old institution owned by HM Treasury, has partnered with CME Group to build and launch a digitised gold offering called Royal Mint Gold (RMG). RMG will change the way traders and investors trade, execute and settle gold.
The innovative new product, launching in 2017, will see The Royal Mint issue RMG as a digital record of ownership for gold stored at its highly-secure on-site bullion vault storage facility. CME Group will develop, implement and operate the product's digital trading platform. Taken together, this new service will provide an easier, cost-effective and cryptographically secure alternative to buying, holding and trading spot gold.
Commenting on the announcement, Vin Wijeratne, CFO of The Royal Mint, said, "The Royal Mint has a unique history and a trusted reputation earned over many centuries trading in gold but until now, there hasn't been a way to digitally trade physical gold.
"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. This landmark partnership allows us to combine the world's leading mint, the best futures trading platform globally and best in class technology."
David Janczewski, Director of New Business at The Royal Mint said, "Distributed ledger technology is a game changer and supplying gold on a blockchain has been on our minds for some time, but only after partnering with CME Group did we feel we had the right fit and proposition.
"We're now inviting the wider market to participate in this project alongside us and CME Group and we look forward to engaging with interested parties in the days ahead. Participation will enable us to develop the platforms to be able to connect to the CME network and trade gold."
CME Group will launch a digital trading platform which will operate 24 hours a day, 365 days a year. Unlike the traditional physical spot cost model for investing in gold with management fees and ongoing storage charges levied, RMGs will offer ownership of the underlying gold with the option for conversion to physical gold by The Royal Mint with zero storage cost.
The initial amount of RMG at launch could be up to $1 billion worth of gold. It will be offered through investment providers. Further RMG will then be issued based on market demand.
Julie Winkler, Senior Managing Director, Research, Product Development and Index Services at CME Group said, "Developing a digital gold trading platform will help ensure that CME Group's current product offerings meet the evolving needs of the global marketplace. As we continue to expand our global footprint and develop new products, this platform will help set standards for digital assets in financial markets. "
Sandra Ro, Digitization Lead at CME Group, added, "Innovation is at the heart of CME Group's business, and the work we have done on RMG with The Royal Mint is testament to CME Group's progress on the application of digital assets and distributed ledger technology to financial markets. By collaborating with The Royal Mint, we have set a new milestone in the digitization of value."
The Royal Mint and CME Group will be hosting a conference call this morning for media on Tuesday, November 29 at 9.30am GMT. The dial-in details are as follows:
Conference ID: 5120357
International dial-in: + 1 913-312-0647
France: +33 (0) 1 70 71 29 52
Germany: +49 (0) 69 3339 9503
United Kingdom: +44 (0) 20 8150 0795
A replay will be available shortly after the call for international media.
The Royal Mint retains copyright ownership © of all images. These may only be used for editorial purposes and cannot be sold or used for other marketing purposes without the permission of The Royal Mint.
About The Royal Mint
The Royal Mint has an unbroken history of minting British coinage dating back over 1,000 years. By the late thirteenth century the organisation was based in the Tower of London, and remained there for over 500 years. By 1812 The Royal Mint had moved out of the Tower to premises on London's Tower Hill. In 1967 the building of a new Royal Mint began on its current site in South Wales, UK.
While The Royal Mint's finest traditions are always respected, it continually innovates in order to stay at the forefront of world minting, embracing the latest production techniques and technology in order to offer excellence to our clients across the globe. By underpinning our proud heritage with a highly progressive outlook, The Royal Mint produces coins that remain a byword for trust and reliability the world over.
There were estimated to be 28.9 billion UK coins in circulation at 31 March 2014, with a total face value of over £4 billion, all manufactured by The Royal Mint. In total, nearly 2 billion UK coins were issued during 2013-14.
As well as over 1,000 years of producing British coinage, The Royal Mint has long been trusted with the currencies of other countries. It has served more than 100 issuing authorities around the world and currently meets approximately 15% of global demand, making us the world's leading export mint.
The Royal Mint has been making official military campaign medals since it was commissioned to make awards for soldiers who fought in the battle of Waterloo in 1815. The year 2012 was of particular significance for The Royal Mint's medal-making team, with the manufacture of all 4,700 Victory Medals for the London 2012 Olympic and Paralympic Games.
The Royal Mint has recently introduced a new fineness of Britannia bullion coins and a highly-secure on-site bullion vault storage facility, building on the gold Sovereign's long-standing reputation for integrity and accuracy.
In September 2014, The Royal Mint launched a new bullion trading website, www.royalmintbullion.com, enabling customers to buy, store and sell bullion coins at constantly updated prices directly from The Royal Mint quickly, effortlessly and securely, 24 hours a day, 365 days a year.
In January 2015, The Royal Mint announced the revival of The Royal Mint Refinery bullion brand. Gold and silver minted bars bearing the historic marque became available for the first time since 1968, available direct to the public at www.royalmintbullion.com.
In June 2015, The Royal Mint launched Signature Gold, a new addition to its bullion trading service, allowing customers to purchase and own a fractional amount of a 400 oz gold bar from www.royalmintbullion.com.
In May 2016 The Royal Mint opened its new visitor attraction, The Royal Mint Experience, at its location in Llantrisant, South Wales. Book a visit and a factory tour online at www.royalmint.com/experience.
About CME Group
As the world's leading and most diverse derivatives marketplace, CME Group (www.cmegroup.com) is where the world comes to manage risk. CME Group exchanges offer the widest range of global benchmark products across all major asset classes, including futures and options based on interest rates, equity indexes, foreign exchange, energy, agricultural products and metals. Around the world, CME Group brings buyers and sellers together through its CME Globex® electronic trading platform and its exchanges based in Chicago, New York and London. CME Group also operates one of the world's leading central counterparty clearing providers through CME Clearing and CME Clearing Europe, which offer clearing and settlement services across asset classes for exchange-traded and over-the-counter derivatives. CME Group's products and services ensure that businesses around the world can effectively manage risk and achieve growth.
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SOURCE CME Group