This M’sian Startup Just Launched A Token That Could Fix One Of Bitcoin’s Biggest Problems
GoldX is an Ethereum-based token that represents actual gold, launched by Malaysian startup HelloGold.
It enters the market at a time where cryptocurrency players are demanding more regulation.
The token may serve as a way for them to place their bets in a more stable asset.
Gold is probably one of the older currencies still in use today, even as the world’s slowly moving towards accepting digital currency.
While today’s cryptocurrency landscape has prided itself on being decentralised, the discerning crypto-investor might be able to mitigate risk by incorporating gold into their portfolio. It’s how fiat investors do it too.
A recent uptake in cryptocurrency thefts has left the usually unregulated crypto-market hungry for laws, and the idea of nation-controlled cryptocurrencies seem tantalising. Dubai has already launched their own cryptocurrency, and so has Venezuela.
It’s this particular market that has led to the rise of cryptocurrencies backed by other assets, and this includes gold. Options include the DinarCoin, OneGram, Royal Mint Gold (launched by the UK’s Royal Mint)—and now GoldX.
GoldX is an Ethereum-based token representing actual, physical gold.
The token is a fully operational ERC20 token, and it’s backed by 99.99% investment-grade gold in vaults in Singapore, held by Bullion Star International.
There is a two-layer auditing going on here; the contract was audited by ZK Labs and ChainSecurity, while the gold is audited by Bureur Veritas, and insured by XL Group.
If you don’t speak crypto, that means each GoldX token represents audited and insured gold. Even though the gold is stored in a Singaporean vault, owning the token means that the gold is yours.
This makes it possible for you to transfer that gold back and forth too, as long as you have an Ethereum wallet.
It can be purchased using Bitcoin or Ethereum, and it goes into the market to provide investors with liquid access to physical gold as an investment.
GoldX is run by Malaysian startup HelloGold, which helps the everyday person figure out how to invest in gold for long-term savings.
“Tokenising the gold was always part of the game plan,” said Robin about GoldX. He referenced our previous interview with HelloGold, stating that it was always blockchain-enabled not just from a customer transaction standpoint, but in all of the underlying assets.
“There is a fair amount of transparency about the assets we hold on behalf of people,” said Robin.
In fact, the new token was developed as a way for their existing HelloGold customers to use their gold beyond just on the app. Currently, buying or selling gold can only be done through HelloGold, which isn’t owned by everyone, or available everywhere.
So by developing GoldX, users can potentially now give or trade their gold with everyone else with an Ethereum wallet.
They can also use GoldX as collateral for loans or credit outside of the parties that HelloGold has partnered with.
“It just gives customers more choice. We offer products and we want them to use our services, but if they want to use someone else’s services to borrow, they can, which is great,” said Robin, referring to HelloGold’s partnership with Aeon Credit.
If someone who owns GoldX decides to get onto the HelloGold ecosystem, then their GoldX can instead be transferred into the platform, rather than an Ethereum wallet.
But let’s go back to its value as a stabilising agent for cryptocurrencies for a second.
GoldX isn’t the only player in the field. But there is also no current default gold-backed cryptocurrency, which might help GoldX pave its way into more wallets.
But of course, we wondered: what makes GoldX stand apart?
The HelloGold brand has yet to build a name for itself among cryptocurrency circles, but Robin highlighted the credentials HelloGold has managed to accumulate since its launched as differentiation point.
Speaking about what might appeal to Malaysians, Robin pointed out their MSC status, awarded by MDEC. They also received backing from 500 Startups, and FinLab (a joint venture with UOB). Besides that, HelloGold has been identified by the Malaysian Ministry of Finance, firstly through their tax programme, and as a startup that they will actively nurture within Malaysia.
Their strategic partnerships also drive up credibility; they count among their partners Aeon, and more recently Axiata—major players in this region.
“We work hard to be as transparent as possible, so we publish our customer list every day, update it, and we make it very easy for our customers to validate what our buyer list is against our custodian’s buyer list.”
“The gold is audited every 6 months, and we try to make sure that we’ve done as much as we can to give our customers comfort that our product is real and fully backed.”
GoldX’s launch into today’s cryptocurrency market seems opportune. I believe that competition is good within the same industry. It helps prevent monopoly when buyers have a choice, and it generally means that the people behind the products are nicer to consumers.
While GoldX may not have the experience that other gold-backed tokens have, I think that being developed under the same person who used to be the CFO of the World Gold Council might help even the odds a little bit.
Cryptocurrency prices have been fluctuating lately, and over US$100 billion was wiped off the global cryptocurrency market in just 24 hours just last Friday. In the face of such news, there’s definitely potential for a player like GoldX, backed by a much more stable asset, to make a mark in the industry.
Update on 19/2/2018:GoldX has announced that the token is now shariah-compliant under the Shariah Supervisory Board of Amanie Advisors. The certification was given thanks to how the tokens are issued, audited to ensure transparency, and the immediacy of transactions.
You can find out more about GoldX on their website.