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HelloGold: digitizing gold for the masses

This week we are featuring startups digitizing gold. Today we look at Malaysia’s HelloGold and its GoldX coin.



Bitcoin is often referred to as “digital gold”, but some companies are turning actual gold into digital tokens.

The motives behind these ventures vary, but one thing looks clear: digital technology, especially blockchain, is going to transform the way gold is held, traded and valued. This should bolster gold’s popularity and utility as a store of value or investible asset, both at a retail and institutional level, and sets a precedent for other real assets.

DigFin is dedicating this week to looking at the companies at the forefront of digitizing gold. Today we look at HelloGold, which is combining mobile and DLT to make gold affordable to emerging markets’ unbanked populations. Mobile Assets, Emergent Technology and Tradewind will follow.

HelloGold: for the unbanked
HelloGold is a Kuala Lumpur-based startup whose product aims to let retail customers in emerging markets access basic financial products. It uses blockchain for the registry, and has a token that might evolve into a gold-based stable coin, but these are secondary to its mission.

“We’re focused on the underserved and unbanked,” said Robin Lee, founder, whose career includes creating gold investment products for State Street Global Advisors and ICBC, and serving as CFO at the World Gold Council.

“Gold is the easiest product to launch and for people to understand,” he said. “Gold is in all cultures.” And it’s not a regulated financial product, which is why many startups are going to market with gold-based ideas.

HelloGold launched in April 2017 with Japanese retail corporate group Aeon, which provides the financing for lending products. Local telco Axiata is the third partner. HelloGold now has 25,000 customers in Malaysia, and is now expanding to Thailand; Dubai and Indonesia plans are in the works.

(Lee chose to set up in Malaysia because it’s a medium-sized, medium-income, urban country with a diverse ethnic base that is smartphone-savvy but still dependent on cash transactions.)

The basic service is simple: download the mobile app, add a bank account, and buy and sell gold at the prevailing spot rate; transfer gold (as a gift); borrow against it.

“Ultimately, if our customers have gold,” Lee said, “we would like them to enjoy a pre-approved [loan] facility, just like rich people have.”

For now customer data is kept on a distributed ledger, and HelloGold will at some point build a core banking system, with a view to tokenizing other assets or adding other financial services.

HelloGold is more than an app. It has also launched a crypto-coin, GoldX, which over time could evolve into a gold-based stable coin, or as a mechanism for users to transact peer-to-peer, moving money as with a debit card or a payments rail like AliPay.

HelloGold supports the value of GoldX by always being long gold. If the company owns, say, 10 kilograms of gold, it will only mint 10,000 GoldX coins.

It operates on a fully allocated basis, which is to say, the gold is owned by the customer and kept in a third-party vault, with the blockchain there to provide transparency on what’s being held alongside traditional audits and insurance. This is meant to assure users that the gold is not being on-lent or exposed to any counterparty or credit risk.

Why have the token? Lee says it plays a more transparent role of evidence of ownership. Over time, tokenized assets will provide customers with flexibility over their savings, and support HelloGold’s ambitions to become a ubiquitous platform for financial services.

But Lee says GoldX could also serve as a stable coin – a crypto unit fixed to some other asset’s value, in order to facilitate mainstream adoption of other digital monies. The most prominent stable coins such as Tether try to link to the U.S. dollar, but Lee says gold is a more reliable, less political anchor.

Right now GoldX is available only over the counter, with HelloGold serving as the market maker of last resort. HelloGold has raised money via an initial coin offering (structured as a utility coin that delivers tokens as the company meets business objectives), but hasn’t done an ICO just for GoldX. “GoldX is out there but it’s not our core proposition,” Lee said. “Our focus is the mass-market wallet.”

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