Physical gold is coming to the digital gold rush known as blockchain technology — and one company is working to ensure that it's responsibly sourced.

That's according to a U.S.-based financial technology company, Emergent Technology Holdings, that is hoping to digitally encode the gold supply chain using blockchain tech in the first half of this year.

The company is creating a digital token that it says will be backed fully by gold in the hopes of offering a way to trade the metal with greater liquidity, says Emergent's chief commercial officer, Mitchell Davis.

By digitally recording each stage of the gold supply chain, the company is able to guarantee the provenance of each piece of the metal, certify that it's responsibly sourced and check that it's 99.99 percent pure. It'll all be recorded on a virtually unchangeable digital ledger: a blockchain.

Emergent Technology is partnering with NYSE-listed Yamana Gold to create "g-coins" backed by gold, where one coin is said to be equivalent to one gram of responsibly sourced gold, and is pegged to the spot price of gold. As a blockchain-based asset, each g-coin is a digital certificate of ownership that could be used for investing, wealth transfer and payments.

This isn't the only attempt at tracking gold on a blockchain, but the company said its approach is "fundamentally different" from what others have adopted so far in part because of its focus on "responsibly sourced gold."

"Emergent is looking to build an ecosystem," Davis told CNBC in an email. As such, the company tracks the gold from its source mine, helping to "connect all steps in the supply-chain."



By attaching a cryptographic seal to the gold, they are able to use technology to track it at every point along the way, says Davis.