Bitcoin site disappears

Australia’s biggest gold refiner, the Bitcoin site disappears Mint, is developing its own cryptocurrency backed by physical precious metals. The ambitious plan, which is subject to a confidentiality agreement, will make it easier for consumers to buy gold.

The mint also plans to make use of blockchain technology, first used as the core component of the digital currency Bitcoin, where it works as a public ledger for transactions. In the 10 years since its inception, blockchain has been used to track transactions in industries from agriculture to land registration and the music recording industry. For the Perth Mint, the need to bring investors back to precious metals after a boom in alternative investments such as cryptocurrencies posed an opportunity, according to chief executive Richard Hayes. I think as the world moves through times of increasing uncertainty, you’re seeing people look for alternate offerings,” he said. And you’re seeing this massive flow of funds into the likes of Bitcoin at the moment because people are looking for something outside of the traditional investments. But Mr Hayes said the volatility of some of the current cryptocurrencies meant they did not suit all investors.

And that is where a gold-backed offering may fit. With a crypto-gold or a crypto-precious metals offering, what you will see is that gold is actually backing it,” Mr Hayes said. So it will have all the benefits of something that is on a distributed ledger that settles very, very quickly, that is easy to trade, but is actually backed by precious metals, so there is actually something behind it, something backing it. Photo: The Perth Mint’s crypto-gold product would make it easier for people to buy gold.

Mr Hayes said that made the prospect of offering a crypto-gold product even more exciting and possibly a world first. Bitcoin is a formula almost guaranteed to end in tears, but still speculators pile in to the bubble, writes Ian Verrender. He said the aim was to provide a transparent offering that would allow investors to buy and sell with confidence, knowing the products they were buying were completely traceable. Mr Hayes said the beauty of the blockchain was that the products investors were buying were managed on a ledger or system that was almost incorruptible. There are a number of offerings out there that use standard blockchain as the underlying record-keeping system, but many of those are not actually gold-backed, so you’re relying on the actual blockchain technology itself. So there’s nothing in terms of cryptocurrencies that actually back the currencies.

If you use precious metals to back something on blockchain or something that is allied to blockchain, it retains its intrinsic value, unlike the offerings from Bitcoin and Ethereum, which really rely on everyone believing that there’s something behind it. However, Mr Hayes believed the technology behind cryptocurrency, blockchain, was here to stay. Mr Hayes said the security aspect of blockchain technology worked well with other elements of the mint’s forward prospects. He said the desire to trace gold from mine site to processing and end consumer fitted well with the blockchain principles. Photo: Physical gold will back a cryptocurrency under development at the Perth Mint.

The introduction of a crypto-gold product would increase the accessibility of gold by consumers. As far as Perth Mint is concerned, gold has certainly become far more accessible to the ordinary man in the street,” Mr Hayes said. We certainly try to make it easier and easier, within reason, for people to access precious metals. This would just be another way for them to do it. Mr Hayes said while a date for a launch of the blockchain-allied products had not been set, he expected the next 12 to 18 months would result in significant movement in that direction. Will those who’ve made cryptocurrency profits pay their tax?

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