Laying the Digital Foundation: The GBI Database and Beyond

By Emmy Richardson, Senior Compliance Associate, LBMA

"The launch of LBMA’s Gold Bar Integrity (GBI) Database in January 2025 is not just a step forward for the precious metals industry – it’s the beginning of a fundamental shift.

While acknowledging the pioneering technological advancements of individual market participants, the industry as a whole has largely relied on practices and systems that, although reliable, have not yet fully embraced the opportunities offered by the digital age.

The GBI Database is poised to change that, catalysing a broader, industry-wide transformation that will ultimately lead to a more transparent, efficient, and resilient market.

The Power of a Standardised Taxonomy

The first step in this transformation is organising data in a way that makes sense for the industry. Defining a universal taxonomy isn’t just a technical necessity; it’s essential for fostering a cohesive and effective evolution. A standardised taxonomy provides a common framework that enables clear communication among diverse stakeholders – whether they are businesses, policymakers or consumers. This shared language eliminates ambiguity, ensuring that everyone interprets terms consistently across the ecosystem.

Why does this matter? Without a standardised language, confusion and misunderstandings will hinder progress toward a more transparent and trusted market. By adopting a universal taxonomy, the industry can finally begin to align on a single vision, enabling interoperability across technology solutions and allowing information to flow seamlessly through the value chain, all the way to the consumer.

Introducing the GBI Database

This initiative will serve as the key governance tool within the broader GBI ecosystem, enabling enhanced clarity, security, and scalability in information sharing across the market. In March 2024, LBMA appointed aXedras as the service provider to build and develop LBMA’s GBI Database and to provide technical support to users.

The first phase, launching in January 2025, is designed to enhance the reporting capabilities of two critical sets of data – vault holdings and GDL Refiner data – providing Refiners and custodians with a secure and efficient platform to share information with LBMA.

Vault Holdings

The GBI Database will centralise more granular vault holdings information, improving market governance by establishing a single point for checks and balances. Loco London custodians will be required to submit bar-level data for both gold and silver bars, ensuring the integrity of these precious metals assets across the industry. It is important to highlight that bar ownership information will not be shared with LBMA.

Refiner Data

In alignment with the Good Delivery Rules and the LBMA Responsible Sourcing Programme, all Good Delivery List (GDL) Refiners will be required to upload data and assurance deliverables via the GBI Database. This will replace the current email-based system, reducing risks and delays through digitisation, and allowing for more robust data analysis and validation criteria.

The launch of the GBI Database is just the first step in the journey, with future phases already being planned. I’m excited to see these datasets evolve through the integration of the GBI Database, enhancing transparency, confidence, and accountability across the supply chain, and pave the way for a more responsible global precious metals market. To further strengthen this initiative, we can explore additional technologies that can support the industry’s growth and development, ensuring a comprehensive approach to innovation and efficiency.

Embracing Blockchain for Industry Transformation

The most promising advancement in the digital space is blockchain technology, which has the potential to revolutionise supply chain traceability, transaction settlement, and collateral management. Blockchain can digitalise the entire lifecycle of precious metals.

This can span the process from extraction to final product and streamline B2B processes among producers, logistics providers, refiners, and downstream users by creating a ‘digital twin’ for products – including grain and semi-finished items – complete with provenance and chain of custody information.

Looking further ahead, tokenisation could be pivotal in creating a fully digital market. By assigning a ‘digital twin’ to each physical asset, tokenisation could lower settlement risks, reduce margin requirements, and even facilitate instantaneous or atomic settlement, where both assets in a trade are exchanged simultaneously. This could significantly reduce the risk of settlement failure, a persistent issue in markets where trades are settled separately. However, achieving this will require substantial changes in how the precious metals markets operate, necessitating collective adoption of new systems and platforms rather than fragmented approaches.

Moreover, the shift to digital assets holds significant potential for improving collateral management. Today, pledging assets or taking collateral against loans is often a slow and complex process, burdened by inefficiencies and risk. However, in a digital world where assets can be trusted, quickly authenticated and safely transferred, collateral can be managed with far greater speed and security. This approach could address current inefficiencies and provide a more secure and transparent market infrastructure.

Challenges on the Horizon

Of course, such transformation doesn’t come without challenges. The number one hurdle is resources: significant investment and time will be required by all market participants to achieve a digitally optimised market. While blockchain technology offers significant advantages for the precious metals industry, it’s important to recognise its limitations – it is not a quality control mechanism and cannot solve the problem of ‘garbage in, garbage out’ in terms of data integrity.

Additionally, the success of these initiatives depends on widespread adoption. If only a few players embrace new systems, the benefits will be limited. Unintended consequences, such as increased market visibility leading to arbitrage opportunities, and a less flexible operating model, also need to be carefully managed.

Moving Forward: A Collective Effort

This journey is about more than just technology; it’s about reimagining traditional processes and integrating digital tools across all stages of value creation. Success will require strategic alignment, robust data management, organisational agility, and collaboration across the broader ecosystem.

Embracing digital transformation goes beyond simply adopting innovative technologies – it’s about using them to unlock new value, attract new investors, and enhance transparency and trust in a constantly evolving marketplace.

As we prepare to launch the GBI Database, we invite you to join us in shaping the future of the gold market. This is just the beginning, and your participation will be crucial in realising the full potential of this transformation.

JOIN US: BE PART OF THE CHANGE

We’re excited to discuss these ideas and more at the 2024 LBMA/LPPM Global Precious Metals Conference in Miami.

Visit the aXedras exhibition booth to learn about the GBI Database and how it represents the first step towards a new era for the precious metals industry. Our team will be available to explore how this initiative can help you navigate the challenges of digital transformation and unlock new opportunities in this rapidly changing market."

Source: Richardson, E. (2024), Laying the Digital Foundation. The GBI Database and Beyond, in: Alchemist (2024), Issue 115, p. 28-29. URL: The GBI Database and Beyond | Alchemist | LBMA