Gold-backed RMG Cryptocurrency Launched by Royal Mint (VIDEO)
The Royal Mint, the government-owned mint that produces coins for the United Kingdom, has launched its own gold-backed cryptocurrency to be used for trading of the precious metal.
Marketed as “a new, cost-effective, convenient and secure way to hold, transact and trade physical gold using blockchain technology”, the coin, Royal Mint Gold (RMG), first unveiled in December 2016, is a digital representation of gold stored in the Royal Mint. It is the only institution that allows customers to hold gold-backed assets on the a blockchain.
Their slogan of ‘Physical Gold / Digitally Traded’ references the fact that one RMG coin represents direct ownership of one gram of gold, and is supported by the commercial lead at RMG, Tom Coghill, who said “it’s real gold you’re holding when you’re holding our RMG” in an interview with The Express, a newspaper in the UK. RMG holders have the full title to their gold holdings at all times and can request physical delivery of their gold at any time.
It argues that it aims to combine the “investment performance of the London Gold Market with the transparency of an exchange-traded asset”. The gold is held in bar form within the highly secure storage facilities in the Royal Mint’s vault. The platform charges no ongoing management or storage fees and coins can be traded instantly. However, there are simply exchange fee structures.
A fixed amount of RMG will be released in the initial offering, but there are policies in place for further issuance. Moreover, the Royal Mint says, “With our commitment to the market, we will support premium pricing through buying demand and provide investment managers with a stable, known and controlled base of gold in which to invest.”
The coin was developed in a partnership between the Royal Mint and CME group, world leaders in export minting and derivatives marketplaces respectively. However, the Royal Mint is not alone in wanting to develop such a cryptocurrency, with local sources in Australia reporting that Perth Mint, the largest precious metal refinery in Australia, was looking to develop its own precious metals-backed cryptocurrency.
Goghill was somewhat disparaging about the cryptocurrency that brought to life the blockchain industry and this new venture, saying, “gold has probably had an argument that it’s been a store of value for 6,000 years, bitcoin’s a bit younger and the future of bitcoin is uncertain.”
Author: Charlie McCombie for EXSCUDO Blog.