The last decade is a hard time to be a saver, but the new phenomenon of negative rates of interest combined with recent resurgence within the cost of gold is causing savers to look again to gold as a savings vehicle able to preserving purchasing power.
All which makes the timing from the recent launch of BitGold, a new digital saving and payment service, look prescient. First, remember that BitGold is not the just like the greater known digital currency called Bitcoin. However at a briefing Tuesday morning, coincident with the annual Prospectors and Developers Association of Canada conference, BitGold executives credited Bitcoin for raising awareness about network-based alternatives to the central banking system.
The rise of so-called \”fintech\” (financial technology) has also made it possible for BitGold to quickly build a network effect. It\’s supplied by GoldMoney Inc., a global precious metals custodian located in Toronto (trading as XAU on the TSX Venture Exchange). The organization has raised $70 million and hopes to be listed on the TSX soon.
Until the early 1970s, paper money was backed by physical gold; then, when Richard Nixon took the U.S. dollar from the gold standard, most nations gone to live in \”fiat\” currencies backed by nothing more than government promises. Now a third phase of digital currency ledgers is developing a comeback for gold, albeit away from central banking system.
Personally, I\’ve been a believer to maintain roughly a ten percent overall allocation to gold or gold and silver. Until now, this was achieved either with gold mutual funds or ETFs, or by holding coins or bullion directly.
- BitGold Inc\’s soaring stock raises warning flags for onlookers: \’It feels nearly the same as 1999\’BitGold begins trading on TSX Venture Exchange as gold transaction platform builds momentum
Gold often zigs when other markets (for example U.S. stocks) zag, so it can provide a measure of diversification and, therefore, safety. During the 2007-2008 financial crisis, for instance, gold, cash and bonds were about the only asset classes that rose when most other assets fell. While gold has already established a rough go from it the final 2 yrs, to date in 2016 it\’s been strong, even relative to the Canadian dollar.
With BitGold, customers\’ are credited with real physical gold, stored at any one of seven Brink\’s locations in main global financial centres. Customers can also take physical delivery.
BitGold\’s global gold network is almost 75 % of the way to some million users (739,252 finally count) in 150 countries. A million users has proven a vital threshold for a range of tech companies, including PayPal (which took two years to obtain there), Facebook (under a year) and Uber (1 . 5 years) C BitGold is at spitting distance of this milestone after just nine months.
Through this gold-based global network, you can purchase or sell gold at a one per cent transaction cost in each direction.
Early clients are mining companies, which permit employees to be paid wholly or in part in BitGold, or permit shareholders to get dividends in BitGold.
One reason the firm made a decision to go public early was to assure customers of regulatory compliance. There is no counterparty risk because C unlike ETFs that are essentially paper offers to deliver real gold C BitGold customers have direct ownership from the underlying metal. It\’s \”fully reserved, allocated and redeemable under Bailment law,\” the company\’s materials state. Customers do not pay for that storage at Brink\’s C it\’s included in BitGold C and also the holdings are fully insured. BitGold can be transacted in additional than 100 currencies around the world.
This occur in just three steps: first, you buy the gold in the funding source of choice for a fee of one percent of gold\’s spot price; then you choose the currency in any amount; and lastly you choose the Brink\’s vault location. You are able to later sell your gold in your bank\’s currency, also for a fee of one percent from the spot price. If your intent is to build long-term savings, that can be done with recurring bank transfers daily, weekly or monthly.
BitGold also provides a gold-backed prepaid GoldMoney MasterCard (free whenever you open a merchant account), which may be used for everyday spending anywhere in the world. It is also launching a Global Business Payments business.