Crypto Biz: Proof of integrity? Gold industry wants blockchain to solve its biggest problems, March 25–31, 2022

Blockchain technology is coming to the aid of another legacy financial industry. Meanwhile, the race to accumulate Bitcoin continues to heat up.

As Bitcoin (BTC) continues to eat away at gold’s market share, the bullion industry is looking to blockchain — the technology first made famous by BTC — to solve its most enduring challenges. How’s that for irony? Someone should really check on Peter Schiff. 

Speaking of Bitcoin, a MicroStrategy subsidiary confirmed this week that it plans to buy more “digital gold” through a crypto-collateralized loan. Terraform Labs CEO Do Kwon also ramped up his Bitcoin purchases to provide solid backing for Terra’s UST stablecoin.

This week’s Crypto Biz takes a deep dive into the gold industry and the latest business developments surrounding Bitcoin.

Gold industry taps blockchain for supply chain management and fraud prevention

Blockchain has been identified as a potential game-changer for the gold industry, which continues to struggle with supply chain issues that have undermined the integrity of bullion production. The London Bullion Market Association and the World Gold Council are developing an “international system of gold bar integrity, chain of custody and provenance” that’s based on blockchain technology. They even named this initiative the Gold Bar Integrity Programme. Some of the industry’s biggest organizations have already joined the initiative, including CME Group, Barrick Gold, Brinks, Royal Canadian Mint, Perth Mint and Metalor. Even if you can find a legacy financier who’s willing to risk their reputation trashing Bitcoin, it’ll be hard for them to ignore the value of its underlying technology. Oh, the irony!

Related: VanEck says Bitcoin could hit $4.8M if it became the global reserve asset

MicroStrategy subsidiary will purchase Bitcoin after closing $205M crypto-collateralized loan

MicroStrategy’s recently formed subsidiary MacroStrategy has secured a $205-million loan from Silvergate to — you guessed it — buy more Bitcoin. To secure the loan, the subsidiary put up an undisclosed amount of BTC as collateral. MicroStrategy CEO Michael Saylor was as poetic as ever in disclosing the new funding round, claiming that his firm “effectively turned our Bitcoin into productive collateral, which allows us to further execute against our business strategy.” If you’re surprised Saylor is still buying after amassing 125,051 BTC, don’t be: MicroStrategy has adopted Bitcoin as its primary treasury reserve asset. So, it plans to buy more every time it generates excess dollars from its primary business. Although MicroStrategy buys BTC over the counter, crypto investors can expect a supply squeeze as demand ramps up from other segments of the market.

Terra smash-buys $139 million of Bitcoin, wallet reaches 31,000 BTC

Do Kwon is giving Michael Saylor a run for his money after Terra scooped up another $139 million worth of Bitcoin this week. Terra has now amassed nearly $1.5 billion worth of BTC as part of its pledge to back its algorithmic stablecoin, UST, with digital gold. It should be noted that the Bitcoin address used to buy the crypto belongs to Luna Foundation Guard, a Singapore-based nonprofit that’s primarily focused on the Terra ecosystem. Bitcoin maxis: Even if you don’t like Terra or altcoins, it’s hard not to respect Kwon for using sound money to back his stablecoin offering.

11 companies form Canadian Web3 Council to advocate for comprehensive crypto strategy

A group of fintech firms has joined forces to form the Canadian Web3 Council, a nonprofit organization designed to advance Canada’s position in the new, crypto-powered digital economy. The council, which includes familiar names such as Dapper Labs, Figment, Wealthsimple and WonderFi Technologies, wants to work with policymakers to ensure Canada isn’t a laggard in the Web3 era. Canada is already showing surprising leadership in the crypto space after policymakers approved two spot Bitcoin ETFs in 2021. As a Canadian, I can tell you that the sky isn’t falling as a result of spot ETF approvals, nor is the investment landscape less safe than it was before. Perhaps we should relay the message to the United States Securities and Exchange Commission?

Related: Grayscale gears up for legal battle with SEC over Bitcoin ETF

Before you go!

What’s the best cryptocurrency to invest in for under $3? On The Market Report this week, I sat down with fellow analysts Jordan Finneseth, Marcel Pechman and Benton Yaun to discuss this very topic. I went with 1INCH and ENJ, Jordan picked MATIC and RON, and Benton made the case for SUPER and NCASH. You can watch the replay below.

Crypto Biz is your weekly pulse of the business behind blockchain and crypto delivered directly to your inbox every Thursday.

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