Exploring the stablecoins based on gold
The rise of Bitcoin has opened a plethora of new and exciting opportunities in cryptocurrency. The future of cryptocurrency may very well rely on the fusion between traditional stable stores of value such as gold and silver to eliminate volatility.
A number of emerging projects allow investors the opportunity to participate in what is effectively a digital system for precious metals. The promise of a cryptocurrency offering price stability, allowing greater confidence from a wider market.
It’s for this reason I have been drawn towards the Kinesis Monetary System.
What does this really mean? What is the difference between a gold-backed token, pegged to the price of gold and a gold-based monetary system enabling people to spend their gold as a superior alternative to paper money.
After exploring the majority of gold pegged stablecoins in the market, I struggled to find real world application to benefit the end user.
Almost all of the tokens are pegged to the price of gold with an underlying asset allocated to a physical counterpart, allowing investors to purchase and move gold over networks like Ethereum or Bespoke Proof of Stake. Unfortunately these networks will never allow for transaction speeds needed for scalable, global adoption.
A common thread is that fees are high and the objective is to digitise precious metals, however I can’t help feel this is no different than just buying and storing gold in a vault, what is the real world application and how can it change the way we transact? After all that’s what cryptocurrency is meant to be about, right?
A gold based monetary system brings the concept of a digital asset into useable currency that is secure, easy to use and most importantly incentivises use over anything else. A system that is not only founded on scalable infrastructure but run by an experienced team, already in the gold markets years before the buzz word “stablecoin”.
It’s for this reason I have been drawn towards the Kinesis Monetary System.
