Finance Monthly April 2019 Edition
47 www.finance-monthly.com SPECIAL FEATURE - DIGITAL GOLD here to stay. These official purchases are expected to provide a stable base for the gold market long- term, but how can the full commercial potential of the booming gold industry be unlocked? The answer is simple – blockchain technology. Christine Lagarde, the head of the IMF, declared late last year that all central banks should consider issuing their own digital currencies, cementing blockchain as a financial services mainstay. However, two IMF economists recently explored how this digital currency could be used by central banks to stimulate economic growth and counter a possible recession by implementing as negative an interest rate as necessary. So, the question arises whether blockchain-based currencies can truly serve consumers. Digitising gold on the blockchain could hold the answer – providing a stable currency through a safe haven asset. This evolutionary system would need to be backed by real assets of gold and silver, providing a 1:1 allocation to physical bullion. The gold industry must adapt to join the fast-paced digital world to stay relevant today. A digital currency pegged to gold is the most suitable way to usher in a new era of stability to financial markets. Although previous digital gold currencies have failed in the past, the latest innovations in blockchain technology provide a trustworthy way to record transactions and ownership of gold, whilst permitting fast international transactions at low rates. This platform will allow the seamless everyday spending, management, and retrieval of these gold and silver-based currencies by using a physical debit card leveraging the global networks such as Visa. The transaction fees accumulated whenever the currencies are sent, spent or traded are proportionately redistributed as a velocity- based yield, incentivising use. Renewed interest in gold, distrust in the banking system, combined with the shift to convenient, agile online-only banking has set the perfect scene for digital gold to flourish. A precedent in the FinTech scene has been established; providing the stable, trustworthy financial platform consumers are looking for. The use of advanced blockchain technology is bringing accessibility to gold trading and shows how old world investment and new world technology can work together to create a new stable currency. Significant technical developments have already been completed, and this year will see a new monetary system flourish that will change the way people see and use gold. With gold at a 50 year high, there has never been a better time to invest in this bank-free monetary revolution and return to the gold standard. www.kinesis.money 1 https://www.gold.org/news-and-events/press-releases/central-bank-buying-drives-growth-in-gold-demand-in-2018 2 https://www.cnbc.com/2019/01/31/world-gold-council-central-banks-buy-most-gold-since-1967-.html 3 https://www.theguardian.com/business/2018/nov/14/imf-says-governments-could-set-up-their-own-cryptocurrencies
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