Kinesis Money, a blockchain startup based in the Cayman Islands, announced on Wednesday the launch of the Kinesis Mint, which aims to bring the gold standard to the blockchain.
The platform will allow investors to create assets backed by precious metals. The first Kinesis coins, KAU—a gold-backed cryptocurrency—and KAG—a silver-backed cryptocurrency—are based on the Kinesis Blockchain Network, which is a fork of the Stellar Network. This allows the network to process near-instant transactions at a flat fee of 0.45%.
These tokens are backed 1:1 by physical bullion, with KAU representing 1 fine gram of gold, and KAG representing 1 ounce of silver. Each bears an identifying stamp and serial number, where appropriate, per the Allocated Bullion Exchange (ABX) Quality Assurance Framework.
Kinesis Money CEO, Thomas Coughlin, described the launch as “a monumental time for [Kinesis]; the Kinesis Mint is the historic first step in the release of our pioneering monetary system.” He continued:
“The global shift towards decentralised digital currency is picking up momentum and Kinesis Money is setting a precedent in the precious metals space. Amidst uncertainty and volatile currencies, the new Kinesis currencies provide the stable, trustworthy financial platform that modern consumers are looking for.“
The company will first hold an Initial Token Offering of the Kinesis Velocity Token (KVT), which is an ERC-20 token on the Ethereum blockchain. The token sale will run until June 30, and is priced at $1,000 per token. Holders of KVT will be rewarded with 20% of all transaction fees.
Kinesis plan to allow investors to trade cryptocurrency and multiple fiat currencies against KAU and KAG by July 2019.
The tokenization of gold on the blockchain is by no means a new idea. JP Morgan announced their intention in October 2018 to tokenize gold bars on Quorum, a private Ethereum blockchain, and Paxos plan to launch gold-backed tokens of their own.
More recently, CEDEX launched their exchange with $50 million worth of tokenized diamonds.
However, it seems Kinesis Money will be the first to launch a stablecoin backed by gold. Indeed, in the wake of the ongoing Tether controversy, perhaps this is the ideal time to introduce the gold standard to the blockchain?