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In Brazil, a new bill is being developed that will allow the tokenization of all gold received in the country on the blockchain. The project was presented by Federal Representative Joenia Vapichana. She emphasizes that about half of the extraction of the precious metal in the country falls on illegal operations.
Why does Brazil need such a bill?
As statistics indicate, most of the gold is mined illegally. Therefore, it is necessary to ensure the transparency of the sector as soon as possible and to complicate illegal mining. In addition, as reported by the Brazilian website Boletim Bitcoin, gold mining with a violation of the technology has a serious impact on the environment, as it can be the cause of pollution of soil, groundwater and rivers as a result of the release of chemicals and heavy metals:
“These operations are accompanied by mercury pollution, deforestation, as often reported by the national and international press, as well as civil society organizations that fight to protect the forest and guarantee the rights of indigenous peoples,” 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 the blockchain.
What the bill implies
To improve control and transparency in the gold mining sector, the National Mining Agency should implement a single digital system with secure records using blockchain technologies to consolidate all data and processes of operations with minerals. Additional electronic records and transaction and sales documents should also be implemented.
At the same time, there is no information on which blockchain network is going to be used if the bill is adopted. Recall that the tokenization of assets is one of the most famous functions provided by blockchain technology. On public blockchain networks, any company or institution can issue tokens representing various financial assets, such as commodities, stocks, and other securities.
If the bill is passed, then Brazil could become one of the leading countries using blockchain to tokenize precious metals. It will also help improve the country’s gold mining situation by reducing illegal mining.
Author: Vadim Gruzdev, Analyst Freedman Club Crypto News
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