Following the abolition of the gold standard which once determined currency value in the 20th century until 1970, the monetary system became dependent on central banking policies. The Kinesis team decided to create its own “efficient, secure and fair monetary system” based on two of the most stable commodities in the world — gold and silver.
“There is [approximately] $15 trillion in gold traded every year, creating exceptional but untapped potential for investment and exchange if gold can be remonetized. Adding a yield to this exchange multiplies this potential exponentially,” says Thomas Coughlin, CEO of Kinesis.
Kinesis provides digital currencies each one based 1:1 on physical gold (KAU) and silver (KAG). As users purchase currencies from Kinesis they actually buy real metals. Gold and silver ownership are digitized by blockchain technology, enabling the users to keep or move their currency from their Kinesis e-Wallet.
The Kinesis debit card will help the user to immediately convert KAU and KAG into fiat currency and thus to spend their cryptocurrencies across the globe. The company notes that, unlike other cryptocurrencies, transactions via the Kinesis system should take just two to three seconds as a result of their Stellar network custom-made fork, which can handle more than 3,000 transactions per second. Kinesis claims that KAU and KAG currencies may be used in daily transactions, such as buying a cup of coffee or purchasing a bike. The Kinesis Monetary System can be used as a platform in order to handle international payments with transfer rates lower than those provided by banks and other international payment providers.
Another option offered by the Kinesis platform is the ability to trade holdings on the Kinesis Blockchain Exchange. Cryptocurrencies may be converted back to actual gold or silver as the network charges a 0.45% fee on each exchange between the holders, accumulating in a pool to be distributed back to network users in the form of a yield.
Kinesis was founded by the Allocated Bullion Exchange (
ABX), the world’s first electronic, institutional bullion exchange for physical precious metal. This gave an exceptional start to the new blockchain-based fintech company: comprehensive infrastructure and a fully operational exchange designed for the trading and storage of physical bullion at seven locations worldwide. The new — but experienced — startup is able to “bring back a truly decentralized, [digitized] stable asset, based on blockchain technology,” Kinesis says.