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LME Supports the Plan of Tracking Metals Using Blockchain

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According to reports, The London Metal Exchange (LME)  which is essentially the worlds largest metal market is believed to be supporting an initiative in order to track various physical metals with the use of blockchain. According to a report by Financial Times, “people familiar with the effort” said that the LME has backed a consortium initiative led by commodity trading firm Mercuria, to build a blockchain-based system to track the trade of physical metals such as copper, zinc, and aluminum.”

The report further suggests that the initiative also called ‘Forcefield’ is fully supported by top banks like Macquarie and ING. The intention of the blockchain system is to help transactors in the space track the source of their metal along with helping traders in metal in order to prove ownership of their stock.

Matt Chamberlain, Cheif Executive LME  did not specifically float a statement concerning involvement in the initiative by the exchange but told FT “In a blockchain-based system] you know where your metal is, you have proof of your metal, but nobody can see what your metal is and where your metal is.” Matt Chamberlain further added by saying that “If the industry can unite to deliver such a system, it would be “a huge win for the metals trading community.”

According to their website, LME has a total of 500 warehouses which are approved and are located in 34 different locations around the globe, where essentially metals are stored on behalf of the holders. However, the firm does not have an approved warehouse in China which at present is the worlds largest consumer of metals. This essentially results in making it difficult for consumers and traders to be certain of metal provenance along with the usual demand and supply chain.

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