Return of the (Crypto) Gold Standard?
Perhaps the biggest criticism, indeed difficulty, with cryptocurrencies and tokens is price volatility. So how about a return to the ‘Gold Standard’? Enter asset-backed and ‘StableCoins’.
One of the great promises of blockchain technology is the mobilisation of whole swathes of assets, from property through jewellery, fine art and luxury goods to commodities such as gold and silver. With the potential to bring much ‘dead money’ to life. The Holy Grail is perhaps the ability to retain use of your property while sharing them, as assets, with others.
Stable coins and asset backed tokens are distinct but overlapping categories. In that overlap are those that represent the value of a stable asset – one which can be confidently expected to remain stable or, in some cases, appreciate in value, such as fine wines. There are now dozens of tokens, coins and currencies that do just that.
Famously each ‘Tether’ coin (USDT) represents, and is backed by, $1. But why bother? For one thing the ability to quickly, easily and cheaply transact across the globe. A small fee is charged on entry (0.1 per cent) and exit. Not only providing better means to move money around but also in and out of more volatile cryptocurrencies quickly and easily. Compare that to Paypal or a bank’s charges.
In other cases the underlying asset may be a parcel of land, a property, or a collection of them. Such as the St. Regis Aspen Resort, tokenised as securities and offered to US accredited investors by the Crowdfunding platform Indiegogo – so moving into Crowdfunding 3.0.
Or backed by a commodity such as gold or silver. Kinesis.Money is creating tokens backed by gold (a KAU token equals 1 gram of gold) and silver (KAG likewise).
They are, or course, almost infinitely divisible – so owning a tiny amount is no problem with the metals held in seven long established storage locations worldwide and managed by Australia’s Allocated Bullion Exchange.
The really clever twist here, apart from better, faster cheaper transactions globally, is that attached to your Kinesis account is a debit card that allows you to, in effect, spend your gold or silver as sterling or dollars. You can buy anything from a cup of coffee to a golden retriever or a Porsche. This is no longer funny money… more like an amazingly flexible friend.
For more on listen at ICOrad.io or email questions to [email protected]
