The crypto that was promised… delivered Down Under

BROUGHTON, EDINBURGH – I have some bad news, dear reader: the Aussies have us beat.

I’m not talking about the cricket. I can accept the weaponised autism of Steve Smith being a challenge (especially when sandpaper is involved).

But when it comes to this particular competition, I really do feel that more could have been done on our side…

Remember back in March, where took a look at the Royal Mint’s new investment product, the gold exchange-traded commodity, or ETC? (See: Welsh gold on offer.)

I commented back at the time that this gold offering (effectively a gold exchange-traded fund), was all that remained of what could have been a ground-breaking innovation with massive applications: a gold-backed cryptocurrency. There have been numerous attempts at creating a gold-backed digital currency, but there has always been the niggling doubt that the gold backing them doesn’t actually exist or might be stolen. This gold-backed currency would be issued by a mint that’s been trusted with gold for over a millennium.

The disruptive potential was huge. This is an opportunity to “seize the golden fleece” from the fiat money authorities and bring back hard money that’s as good as gold. Or so I argued at the time (very long-time readers may recall Seize the golden fleece in Southbank Investment Daily, 2 March 2018), when the Royal Mint was developing a gold-backed crypto called RMG – Royal Mint Gold. One token of RMG, it was planned, would be backed by one gram of gold held in the Royal Mint vaults in Wales.

But alas, the project went dark. Developments and progress on the project stopped arriving, and the excited chatter surrounding it dwindled into silence. I later discovered that the mint had axed the project, for fear of tarnishing its brand. It didn’t want to stain its reputation with some of the negative press that crypto attracts.

The mint released a gold ETC instead, the $RMAU. It’s a welcome investment product to the UK market to be sure… but a shallow promise of what could have been. It was such a missed opportunity.

But what the Royal Mint passed up… the Perth Mint in the land Down Under picked up.


The Perth Mint Gold Token, or $PMGT.

The Perth Mint, the official bullion mint of Australia, has run a “gold certificate program” for many years. These certificates entitle investors to gold held in its vaults, with a government guarantee. They’re not for everyone (for many – including myself – you just can’t beat physical ownership), but for the right investor, they are very useful.

A business called Trovio, in collaboration with the mint, has taken things a step further, and mounted the certificates on the Ethereum blockchain. Users of the Ethereum network can now trade and exchange ownership of Perth Mint Gold across the ETH blockchain.

We finally have a quasi-state-backed gold cryptocurrency. How far this goes we have yet to see. Personally, I’ll be fascinated to see where it goes. This last bull run in crypto saw the rise of De-Fi, or decentralised finance – borrowing, lending, and everything in between without requiring a bank in the middle. Now that gold can be added to that mix… I wonder what might come of it.

So far, you can only acquire the token directly from Trovio or an Aussie crypto exchange called Independent Reserve. It’ll be interesting to see how much demand there is for the token, and if other exchanges start listing it.

I’m not telling you to go out there and buy this token – if you’ve got gold already, you can just sit tight and relax. This is an experiment, and one should remember that the Ethereum blockchain which this token has been mounted on is far from perfect.

But watch this space – take a read of the PGMT whitepaper and cast your eyes on what just might be… a golden revolution.

If only we’d beaten the Aussies to it….

Wishing you a good weekend,

Boaz Shoshan
Editor, Capital & Conflict

PS In another case of the Aussies beating the Brits, my Australian colleague Sam Volkering was the first editor here at Southbank Investment Research to start telling his readers about a formerly niche sector of the stock market that has since been on a terrific tear. It’s not for everyone, but if you’ve the stomach for some of the wildest action stocks can deliver, this market may well be for you

Category: Investing in Gold

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