In a volatile decade for markets, investors are looking for capital preservation and real stores of value. WorldVest, a private investment firm, has teamed up with Tokenized to build TroyMoney in an effort to build gold and precious metal-backed token currencies on the BSV blockchain. The physical backing assets remain in a vault, while the tokenized assets can be exchanged instantly anywhere in the world digitally.
The recent presentation by economist Peter Schiff at the London Blockchain Conference 2023 and his other recent statements in articles and interviews have renewed enthusiasm for blockchain assets with more stable values backed by physical commodities with “intrinsic value.” Gold grabs the most attention, though TroyMoney’s plans include others such as silver, platinum, and palladium.
A press release from WorldVest last week described a new “Metals as Money” initiative to educate the public on what it calls “a viable alternative to the current system of holding government IOU’s, known as fiat currencies, and CBDCs (central bank digital currencies).”
While gold and silver have a reputation as stores of value that has endured for thousands of years, the modern world demands a way to use them in transactions without needing to store or move the physical materials themselves. The more hardcore “gold bugs” insist that maintaining and securing your own physical vault is the only way to have true peace of mind, but this comes with additional costs and logistical concerns that make it impractical for most.
Individual physical vaults also make precious metals challenging to use in regular transactions, especially over long distances and/or when speed is important. Therefore, the next-best solution is to tokenize the assets on a blockchain network with adequate speed and scalability to handle the traffic. The BSV blockchain supplies this, and Tokenized provides the interface to manage and trade digital units based on the metals stored in vaults.
WorldVest Chairman Garrett Krause said global market volatility and geopolitical instability over the past decade or so are driving gold demand.
“The opportunity to launch this project using Tokenized Smart Contract Protocol on the BSV Blockchain, which follows the original Bitcoin White paper by Satoshi, allowing for a stable, scalable, secure, and safe and instant economic transaction that other blockchains struggle to deliver. Further, as we integrate the BSV Wallets, TroyMoney is enabled to be transferred peer to peer, like a Gold Venmo, and for an efficient micropayment to a merchant for the purchase of a coffee.”
The USD value of a gold troy ounce went from around $1,630 in October 2022 to $2,050 in April 2023, and today sits at $1,920 (still a 10% increase over the past year). Silver ounces have risen 19.1% over the same period. There’s even talk of new international trading or even reserve currencies backed by gold or other commodities, raising speculation of values pushing even higher.
Tokenized CEO James Belding said he believes tokens “are just the tip of the iceberg to really bring about a step change in financial infrastructure.” However, this also needs “a complete digital transformation of the terms and conditions of private financial contracts, as well as the related commercial events.”
“This holistic approach allows us to unlock novel insights, increase automation, and simplify administrative and performance-related processes. Our architecture utilizes private and permissioned subledgers at the application layer of a public and permissionless distributed ledger—BSV.”
Much will depend on the TroyMoney project’s ability to supply enough metals in reserve to meet demand and convince potential users of real metals back their digital assets in secure locations. While the benefits of metals-backed digital assets are easy to explain, the biggest challenge is in trust and reputation, which can take time.
Belding added that Tokenized had been impressed with TroyMoney’s vision and team and that together they would “deliver unique and compelling financial products with capabilities that will push the boundaries of what many in the industry think is possible.”
Watch Peter Schiff at the London Blockchain Conference 2023: How a ‘digital gold’ system should really work
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