What is a Vault Receipt?
A vault receipt is a document that proves ownership of gold, silver or other precious metals stored elsewhere.
How Does a Vault Receipt Work?
Let's say John Doe purchases gold through a futures contract. The contract expires and John takes delivery of the gold. However, a truck doesn't just come to John's house with a load of gold. The gold is in a secure storage facility, and John receives a vault receipt indicating that he is now the owner of that gold.
Why Does a Vault Receipt Matter?
Vault receipts are crucial documents because they prove ownership and prevent buyers and sellers from having to physically move heavy objects every time they make trades.