To promote transparency and deter unlawful mining, Brazil is now developing a new policy that would tokenize all gold mined on a blockchain. The initiative’s creator, federal representative Joenia Wapichana, underlined that around half of the country’s metal mining takes place in illegal activities.
According to the Brazilian website Boletim Bitcoin, gold mining significantly negatively influences the environment since it can contaminate soil, groundwater, and rivers by releasing chemicals and heavy metals. The Bill explains:
“These operations are accompanied by mercury contamination, violence, and deforestation, as has been frequently reported by the national and international press, and by civil society organizations that fight for the protection of the forest and the guarantee of indigenous rights.”
New law will be implemented regarding gold trading – Brazil
The plan aims to establish new regulations that would govern the country’s gold buying, selling, and trading and be stored on a blockchain. Technical details about the project’s implementation were not given, nor was it specified which blockchain network should be used. Asset tokenization is one of the fantastic features provided by blockchain technology.
Tokens that represent different financial assets, including as commodities, stocks, and other securities, can be created by any company or institution and stored on open blockchain networks.
Global demand for gold that has been tokenized is rising. The company’s precious metal-backed token, Paxos Gold (PAXG), now has a market cap exceeding $600 million, while a competitor, Tether Gold (XAUT), has a market worth of $440 million.
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