New legislation requires all gold mined in Brazil to be tokenized on a blockchain

New legislation requires all gold mined in Brazil to be tokenized on a blockchain

A new bill underway 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 illegal 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 site Boletim Bitcoin, gold mining has a major environmental impact as it can be responsible for polluting soil, groundwater and rivers through the release of chemicals and heavy metals:

“These operations are accompanied by mercury pollution, violence and deforestation, which have been frequently reported by the national and international press, and by civil society organizations fighting for the protection of the forest and the guarantee of indigenous rights,” the bill explains.

The project aims to establish new rules for buying, selling and trading gold in the country, which will then be registered on a blockchain. The politician added:

To improve inspection and provide transparency to the sector, it is also established here that the National Mining Agency implements 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 even allows you to create alerts for inspection.

No technical details were given about the execution of the project, nor which blockchain network would be used for this operation.

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Gold tokenization

Asset tokenization is one of the major tools offered by blockchain technology. On public blockchain networks, any company or institution can issue tokens that represent various 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 market cap of $440 million.

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Featured image via Pixabay.

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