Updated: Feb 7
Global Investor Group, a Singaporean private equity firm, is to invest up to £2 million in UK-based blockchain security start-up, Blockchain Innovation Ltd to help launch the new Gold Backed token; Credyts.
Blockchain Innovation (BIL) has been developing two key projects centred around blockchain security.
The first, “Medi-Cert”, was initiated in 2017 and presents the ability to securely store and verify an individual’s university qualifications using Blockchain technology.
The second project, developed in 2016 and now in the final stages of pre-launch, relates to the introduction to market of gold-backed tokens referred to by the company as “Credyts”.
Blockchain Innovation believes that through utilising blockchain security technology they can not only revolutionise the immediate and stable transfer of hard wealth (gold), but also now verify qualifications instantly, (a crucial need in many industries, for example the medical profession).
They feel this will not only revolutionise the usability, protection and transfer of gold based assets but potentially save lives, as blockchain drastically reduces recruitment time and the risks of CV exaggeration or fraud.
Founder and CEO of Global Investor Group, Aaron Banks, says he is passionate about solving real world problems, wherever possible, in line with the United Nations stated Sustainable Development Goals, which were agreed on recently by 193 countries and which encompass bold initiatives around zero poverty, gender equality and global health and wellbeing.
Banks stresses that, in keeping these UN Goals in mind when looking to invest, Global Investor Group is able to rapidly filter opportunities that will gain central governmental support, along with traction in communities who need these tools the most - ultimately aiding speed to market and adoption.
Banks feels that the two key projects underway by Blockchain Innovation not only addresses some of these needs, but that they offer a unique opportunity for investors and first movers to benefit from core blockchain technology, without the wild fluctuations and risk associated with Crypto Currency.
Banks describes these benefits as being as big as the introduction of the internet itself.
When asked to clarify, Banks explains; “Blockchain was a little tarnished at its inception by the rapid deployment and wild fluctuations of crypto currency. Many people believed the two were mutually exclusive and that Blockchain was, or meant, Crypto. Well that’s like saying the internet, at inception, was just for porn and pizza.” He continues “…at the end of the day, many central governments and large corporations have already formed departments, think tanks and research facilities, to investigate ways this new technology can be deployed. Just as they did with cellphones, GPS, and the Internet. We’re not alone in taking this very seriously.”
Banks states that Blockchain Innovations already has agreements in place to support the depositing of funds with Royal Mail in the UK to purchase Credyts (one-to-one backed by gold) at Post Shops nationwide. There is also an app and web portal to allow the transfer, payment and liquidation of gold.
How does "Credyts" work?
While Banks is tight lipped about all the details of what Credyts can offer, citing commercial sensitivity, he suggests that at its core, a client owning a Credyt in the UK, could transfer ownership of this to a colleague in, say, Singapore within seconds using the Blockchain.
The colleague could then convert his Credyt into one ounce of pure gold from a local approved bullion mint or vault, or indeed retain it in his digital wallet for future use to buy anything on the open market through currency.
To allow this functionality, Credyts is approaching key transaction websites globally, with several already on board and others in the final stages of signing up.
Banks feels that the ability to “bank the unbanked” in developing nations is a game-changer. He suggests evidence shows that the traditional middle classes in countries like the UK and US are losing faith in central governmental monetary policy and banknotes themselves, while the ability to hold and trade gold, in fractions of an ounce, stored digitally in wallets, will appeal to many in countries such as India, Africa and China as their economies develop.
Others in the UK and US for example may enjoy the security of knowing that the ones and zeros in their accounts are finally represented by gold once again, as they were for their great grandparents before the US scrapped the protection of the “Gold Standard”.
Should we bring back the Gold Standard?
In noting how animated Banks becomes at the mention of the long lost Gold Standard, he quotes Ben Bernanke, the current Chair of the Federal Reserve in the U.S, who in 2002 said “The U.S. Government has a technology called a printing press (or today, its electronic equivalent), that allows it to produce as many U.S dollars as it wishes at no cost”.
Banks suggest that the U.S has effectively had their finger on the print button for so long that paper currency may again become virtually worthless (as it did in Germany through the 30’s, along with many other recent examples including Venezuela). He goes further in pointing out that many leading economies such as the U.S and UK don’t even bother to “hit print” anymore on these presses. As they encourage consumers to move towards fully digital spending, they need only generate numbers on a spreadsheet at central government to flood the economy with “economic stimulus”. Banks suggests many leading economists along with his colleagues in major fund management, suggest this final step towards devaluation can only end one way - badly.
Blockchain Innovation believes that with an unstable global economy and no intrinsic value remaining in the worlds leading paper currencies, there is a growing unease and need amongst those that understand the numbers. This, they feel, is where Credyts comes in. They point to its ease of use, through debit cards, e-wallets and electronic transactions, but stress that each gram of gold (or fraction of a Credyt) is assigned to it’s owner through the Blockchain and available to “withdraw” at any point. The aim is to guarantee the physical delivery of a users gold, door to door, within 48 hours. Far more, Banks argues, than can be said for the Dollar or Pound.
Banks suggest that what Global Investors are trying to do is sponsor a return to traditional monetary values, updated for a public that demands online, or instant purchasing power. Banks cites the fact that the traditional bank note was in fact a promissory note in paper-form, effectively guaranteeing the bearer a sum of silver or gold on presentation to the bank. Credyts he claims offers precisely the same, digitally, which means of course that they can be used globally in an instant.
Whilst Global Investor, through its investment in Blockchain Innovations is not alone in exploring what can be achieved in coming years with Blockchain security and technology; it believes it has early adopter advantage with two diverse, but equally game-changing, solutions to real world problems. A formula, Banks notes, has worked very well in the past.