Australian Gold Refinery Announces Plan to Develop Cryptocurrency

Perth Mint, Australia’s largest gold refiner, has announced plans for the development a cryptocurrency backed by physical gold. If successful in developing the altcoin, it will join a long list of virtual currencies seeking to entice cryptocurrency investors to experiment with commodity-backed virtual currencies, including Venezuela’s soon to be launched ‘petro’.

Also Read: Venezuela Considers Selling Its ”Oil-Backed” Cryptocurrency With a 60% Discount

Australian Gold Refinery to Develop Cryptocurrency

The chief executive of Perth Mint, Richard Hayes, states that the company has identified a significant opportunity in “bring[ing] investors back to precious metals after a boom in alternative investments such as cryptocurrencies,” the Australian Broadcasting Corporation reports.

“I think as the world moves through times of increasing uncertainty, you’re seeing people look for alternate offerings,” Mr. Hayes stated, adding “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.”

Perth Mint CEO Claims Metal-Based Crypto Potentially Offers Price Stability

Mr. Hayes explained Perth Mint’s decision to develop a gold-backed cryptocurrency, emphasizing the purported benefits of using distributed ledger technology for fast and efficient settlement, whilst potentially affording the cryptocurrency greater price stability than unbacked virtual currencies. The CEO stated that “us[ing] precious metals to back something […] allied to blockchain […] retains its intrinsic value,” adding that unbacked cryptocurrencies “rely on everyone believing that there’s something behind it.”

“With a crypto-gold or a crypto-precious metals offering, what you will see is that gold is actually backing it,” Mr. Hayes stated. “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.”

Commodity-Backed Cryptocurrencies Proliferate

If successful in launching the cryptocurrency, Perth Mint’s altcoin will join a long list of virtual currencies purporting to be backed by gold. Last year, the initial coin offering (ICO) for Onegram – a purportedly Shariah-compliant, gold-backed, cryptocurrency – garnered significant international media attention for what the company hoped would be a more than $500 million USD token-sale.

At the closure of the first phase of the ICO, Onegram only saw the sale of 16,926 of the 12,400,786 Onegramcoins (OGC) that the company had hoped to sell – comprising less than 0.14% of the company’s goal. Presently, Onegram claims that the platform is still in development, and has given its investors the option to resell their OGC for a meager 25% return should they wish to liquidate their holdings.

Venezuela also recently announced that it will launch a commodity-backed cryptocurrency, the ‘petro’ – a national cryptocurrency purportedly backed by 5 billion barrels of Venezuelan crude oil. In recent weeks, Venezuelan officials have urged neighboring countries to adopt the cryptocurrency. At present, it appears as though the Venezuelan government will seek to sell the crypto in “private placements at a discount of up to 60 percent,” with the sale set to start of February 15.

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Images courtesy of Shutterstock, The Perth Mint Australia

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