Bitcoin is often referred to as “digital gold”, but some companies are turning actual gold into digital tokens...or in one case, into a purer form of money.
DigFin is dedicating this week to looking at the companies at the forefront of digitizing gold. In the case of Mobile Assets, this doesn't involve blockchain or issuing tokens. It is the only company featured this week that believes gold is best transformed into everyday money through more conventional mobile-wallet tech.
This is similar to yesterday's featured company, HelloGold, but HelloGold is also tokenizing gold, and has a different target user in mind. Mobile Assets's SendGold app is born from a combination of finance, gaming and marketing. We will continue the week with Emergent Technology and Tradewind Markets.
Mobile Assets: digital wallet for gold
Jodi Stanton, co-founder and CEO at Mobile Assets, says it’s still early days for using blockchain and tokens for digital gold. She looked at the prospects for using gold to support stable coins, but says security, scalability and governance mean it’s not yet time to make a crypto platform bet.
Stanton’s an adventurer. A self-described disillusioned financial engineer who once worked at bulge-bracket firms in New York, she bought her first bitcoin in 2012 and got stuck into understanding it, to the point that she decided it wasn’t ready for prime time. “I was buying bitcoin in different cities with cash in brown paper bags,” she said.
But when the currency spiked last year, “I realized bitcoin can never be money, it’s too volatile.” Similarly the tech isn’t mature enough to support a stable coin. Frustrations with the existing bank payments system is crying out for a response from the world of decentralized ledgers, but she decided gold didn’t belong on a blockchain, especially a public one, because of security issues.
Bitcoin can never be money
Mobile Assets was launched to put real assets behind a mobile wallet for gold. “We’re turning gold into money,” she said. The app, called SendGold, sells title to physical gold, with insurance from Lloyds of London, that can be sent peer-to-peer. “Prosper and Venmo—that P2P movement—that’s our model.”
SendGold is now operating in Australia, where Stanton is based, and China, India, the Philippines and Vietnam. Its target market is sophisticated business professionals, with a strong female component. People use gold as money for gifting, remittances, savings and international payments. The service is only two months old; Stanton declined to share volume or user numbers.
“This is for younger professionals who don’t hold assets, and don’t want to wade through a heavy prospectus,” she said. “There’s $4.3 trillion of emerging-market middle-class wealth entering financial services, but 85% of all transactions [in EMs] are in cash. We give people a faster, cheaper and more accessible alternative to the regular bank currency model.”
To promote adoption, the company is signing distribution partners, to enable companies to reward loyalty points in the form of gold. She’s also talking with social gaming companies, in which players win actual gold instead of tokens. “We’re bankifying games,” she said. And the company has built a location-based game, like Pokemon Go, in which players can roam their city using SendGold to find actual gold, not cartoon characters. “It’s cheap marketing,” she said.
Prosper and Venmo – the P2P movement – that's our model
Stanton says the business is niche but global, with low costs and an easily understandable offer. If it takes off, other commodities and assets can follow; with an eye on that future, the company is seeking a financial license in Australia, which it doesn’t need for gold but would like as a means of establishing trust.
“I believe in complementary currencies,” Stanton said. “Just like we consume ads on multiple devices, we can consume money in different formats.” Companies such as Mobile Assets are disruptive in the way that Uber and Airbnb were to transportation and hotels: “And money is the biggest industry of all.”