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Interviews

Mitch Davis on gold-backed G-coin and its use for making and accepting payments

Tuesday 14 August 2018 | 09:27 AM CET

Mitch Davis of Emergent Technology tells us what’s behind the value and use of G-Coin token, a digital currency set to disrupt the market

The interview aims to find out more about G-Coin and will focus on two aspects: the Responsible Gold Ecosystem that tracks conflict-free gold from mine, to refinery, to vault, and on the G-Coin digital tokens that are used for making and accepting payments.

What is a G-Coin token? How are G-Coin tokens different from other gold-backed tokens in the market?

Emergent Technology (“Emergent”) is introducing a transformative digital currency into a market that is ripe for disruption. G-Coins are digital tokens backed by responsibly sourced, physical gold. One G-Coin token is a digital certificate of ownership of one gram of responsibly sourced gold that is stored in a highly secure vault. Responsibly sourced gold is tracked from mine to vault and is digitized into G-Coin tokens on a permissioned blockchain. The provenance information of the underlying gold can be tracked to the source mine and through every stage of the supply chain process. For the first time, conflict-free gold can be used as an investment tool, wealth transfer vehicle, and payment mechanism.

The Responsible Gold Ecosystem was built for financial markets on a platform that handles thousands of concurrent trades, offers settlement finality in less than one second, and importantly, delivers the highest levels of security with blockchain cryptographic algorithms. G-Coin tokens are a highly liquid and tradeable asset, with multiple use cases, particularly as an investment, store of value and as an alternative to cash. For more information visit www.gcoin.com.

Who will benefit most from the Responsible Gold Ecosystem and G-Coin? What are some of the G-Coin token use cases?

Many audiences benefit from using G-Coin tokens:

Multinational companies: By 2022, it’s predicted that cross-border B2B transactions will exceed USD 218 trillion. Multinational companies are routinely moving funds to and from their overseas subsidiaries. Managing these payments can be complicated and expensive. Our ecosystem provides a highly efficient and cost-effective platform for cross-border transactions. G-Coin tokens allow companies to move value seamlessly across borders and without intermediaries. They reduce cost, time and volatility for multinationals.

New investment groups: Traditional equity and fixed income portfolio managers are increasingly integrating ESG into their decision-making process. Today, USD 82 trillion of assets under management is controlled by more than 2,000 managers that follow ethical mandates. Without proof of ethical mining and production practices, these funds are unable to invest in gold. G-Coin tokens are the next step in gold investment. They open the market to family offices, sovereign wealth funds, pension, hedge and mutual funds and other institutions with ethical mandates. They promote sustainability values through backing with responsibly sourced gold and the ability to see the provenance of this gold at every point in the supply chain. Emergent also expects millennials to be attracted to G-Coin tokens. This is driven by their increasing ethical awareness, comfort with the digital world and familiarity with alternative currencies.

Emerging market citizens: In markets where the local currency is sensitive to inflation, volatility or devaluations, people are turning to alternatives, such as cryptocurrencies, to sustain their wealth. However, cryptocurrencies have a history of being exceptionally volatile. They are more a speculative investment than a safe, long-term hold. The introduction of a gold-backed digital currency is very appealing in emerging market environments. Users can convert their local currency into G-Coin tokens to protect their wealth and purchasing power with confidence, knowing there is real physical gold that is redeemable and vaulted in their names.

How can G-Coin tokens be used for making and accepting payments? How can cross-border trading/remittances benefit from using them?

Emergent has created an alternative to cash with responsibly sourced, digital gold. G-Coin tokens are well positioned to replace traditional payment methods. Individuals and companies can send, spend and trade G-Coin tokens using a secure wallet. At the beginning of 2018, Emergent tested a debit card in Europe using G-Coin tokens in point-of-sale transactions. We will be extending this pilot program on a broader basis later this year.

Our development focused on streamlining cross-border payments and cutting the unnecessary costs attached. As it stands, cross-border payments face lengthy settlement times, high fees, no FX transparency, limited payment status visibility and no support once payment is sent. A recent SWIFT and EuroFinance survey revealed that 64% of treasurers want the ability to track payments in real-time, while 42% want instant payments. Also high on their list is greater visibility on costs and deductions. We know that reconciliation is a significant challenge in the current international payments landscape. G-Coin solves these pain points. Multinational companies can move money faster than international bank wires. They can track payments from end-to-end, and there are no wire fees to send or receive. We offer competitive FX conversion rates, as well as a natural hedge to volatile emerging market currencies.

The cryptocurrency landscape deals with trust issues, focusing on compliance, security, and data protection. How do you secure that trust with your customers?

The Responsible Gold Ecosystem was built on trust. Our permissioned blockchain platform combines role-based security with state of the art technology. Its decentralized nature assures the highest level of trust. Both individuals and companies undergo full KYC/KYB processes during onboarding, whether they intend on sending, spending, investing or redeeming G-Coin tokens. G-Coin token transactions are recorded on a distributed ledger, which is immutable and cannot be tampered with. The ledger irrefutably tracks physical ownership of the gold throughout the network.

Unlike cryptocurrencies, G-Coin is value-backed by a real, reliable and stable physical asset. Gold is a trusted asset around the world, particularly in volatile and challenging economies. It has reliable pricing and is heavily traded with nearly USD 250 bln daily through London markets. G-Coin tokens are tokenized representations of a specific bar of responsibly-sourced gold stored in a high-security vault. The provenance of each G-Coin token can be looked up by owners, who are able to see the gold provenance information (e.g., what mine it came from, where it was refined) of each G-Coin token at any time. A G-Coin account holder can redeem the physical gold, and have it shipped wherever they choose in the world. Our goal is to make gold the most liquid asset on Earth.

About Mitch Davis

Mitch Davis is Chief Commercial Officer at Emergent Technology, as well as the Chairman and Chief Executive Officer of Emergent Payments, a company he co-founded in 2006. A digital media pioneer with a long record of entrepreneurial success, Mitch sparked a revolution in the video game industry when he founded the world’s first and largest in-game advertising network, Massive, which he sold to Microsoft in 2006. He was consequently named as one of the most influential people in the video game industry by the Wall Street Journal. Other successes include co-founding Digital Rights, acquired by Liberty One; and co-founding Parcelhouse. Mitch also served as Senior Vice President of Encyclopedia Britannica, responsible for Britannica.com and CD Rom business units.

About Emergent Technology

Emergent Technology owns and operates Emergent Payments, a global provider of local payment solutions for digital merchants in more than 60 high-growth markets across Asia-Pacific, Latin America, Africa and the Middle East. The company is also the owner of Responsible Gold, a blockchain-based technology and smart contract platform that traces responsibly sourced gold from mine, to refinery to vault and then digitizes that gold into G-Coin tokens for trade around the world.

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