Britain’s Royal Mint and Chicago-based exchange CME Group Inc are testing a new platform for trading gold based on blockchain technology. RMG (Royal Mint Gold), is a digital gold product created by The Royal Mint and CME Group.

CME Group said Tuesday it is responsible for developing and operating the product’s digital platform which will provide a fast, cost-effective and cryptographically secure method of buying, holding and trading spot gold.

The new blockchain-based product is an entire trading eco-system for gold, providing speed, security as well as transparency of direct ownership, said the CME Group.

“An RMG is a digital representation of real gold sitting in the Royal Mint vaults,” said Sandra Ro, head of digitization at CME Group.

“When you purchase RMGs you will effectively have real gold that is allocated from a direct ownership standpoint that is completely reserved – there is no re-hypothecation, there is no lending on that gold, there will be enough physical gold to represent all the RMGs that are issued.”

“This is the first digital gold product that is institutionally targeted – and the first to work with a government entity – to be currently in a live testing state,” said Ro.

All crypto-based digital assets, RMG included, are based on public key infrastructure, which allows a host of users on the network to authorize and verify transactions. Multi-signature, Belshe explains, takes this form of authorization one step further with an additional private key being held by a trusted party such as a bank or a lawyer.

“There is a higher level of traceability and audit that comes with blockchain technology because participants are provided with a permanent immutable record of ownership and chain of ownership and custody,” said Igor Telyatnikov, President & COO of AlphaPoint, the blockchain technology company CME Group has partnered with to provide the RMG trading platform.