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Importance of a Safe Digital Currency

Making BullionCoin a safe digital currency means that it must have certain characteristics that aren't just technological in nature. The entire concept of what makes traditional money safe, useable and stable has been reviewed and incorporated into this new monetary asset.

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It's important for any currency to be safe and stable otherwise it'll severely restrict how and to what extent it can be used by everyone across every trade the way money is currently used today.

Asset Managers of institutions, companies and private individuals need currencies to be stable in order to avoid losses through unpredictable volatility. But just solving volatility is not the only thing to consider and implement.

Designing the Safe Digital Currency BullionCoin

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The starting point was to base it on the safest form of money our species has ever used with a proven 5000 year track record; physical Gold and Silver bullion.

BullionCoin is 100% backed by allocated physical gold or silver bullion on a 1:1 basis.

  • 1 Gold BullionCoin equals 1 gram of vaulted physical gold
  • 1 Silver BullionCoin equals 50 grams of vaulted physical silver

All of the metal backing the coins is privately vaulted outside the banking system within ABX's global vaulting network.

Using gold and silver in this way allows BullionCoin to replicate the metal's impressive long-term storage of wealth characteristics. Gold bullion and silver's use a long-term store of wealth is made possible because its physical properties can't be altered and the creation of new quantities is difficult and limited, creating a very stable pricing environment, as you will see below.

This physical backing is the core feature and benefit towards making BullionCoin a safe digital currency.

Join as a founding investor to generate initial liquidity and get rewarded double the yield rate over standard primary participants.

Digitising Physical Precious Metals by Using Blockchain

Bank transfers and transactions can take up to 5 working days to complete. BullionCoin takes around 4 seconds. Why the difference?

The emergence of the new working technological application of blockchain, has delivered advantages to BullionCoin and allowed all currency transactions to be both much faster and recorded more safely than the current traditional banking system.

Blockchain is an electronic ledger system that can't be tampered with, without it being known. This electronic ledger is available to be held freely by anyone so that everyone can access and check its historical records whenever they want.

To ensure that record tampering is not possible without discovery BullionCoin utilises the proven blockchain technology to facilitate global currency transactions and improve asset liquidity and velocity.

Find out about your ability to transfer your existing precious metals into ABX / BCX to convert into BullionCoins.***

BullionCoin Introduces Much Needed Stability

To be considered a safe digital currency, BullionCoin also needs to counter the main & consistent problem that plagues cryptocurrencies, which is volatility.

Cryptocurrencies can have huge percentage changes which can easily move more than 10% one day and then 20% in the other direction the next day. Moves more than 30% up & down each day are not uncommon.

Such extreme levels of volatility makes the whole market unsuitable for trading as a mainstream form of currency or to be used as an asset that can be safely relied upon to store wealth.

Monetary Velocity

In currency terms, velocity refers to the rate at which its monetary base / capitalisation changes hands (turned over) each day.

The higher the velocity, the higher the liquidity at any point in time which enables the currency's ability to absorb the volatility associated with buying and selling.

This means that:

  • Low velocity translates into high levels of price volatility 
  • High velocity translates into low levels of price volatility

In the case of cryptocurrencies low velocity is created mainly due to speculation that their prices will go up, which is why they are being held for profit and not used for transactional purposes the way traditional currencies are.

BullionCoin has built-in characteristics that incentivises high velocity. This is one of several reasons that enables BullionCoin to defy Gresham's Law. 

Price Floor

Due to the BullionCoin's ability to be redeemed in exchange for the physical precious metals backing it, the coin's price will never likely drop below the spot price for physical gold or silver otherwise the market will be in a position to buy physical precious metals at a discount.

The ability to redeem ensures that any volatility down is restricted by a floor dictated by the spot price of allocated gold and silver.

The actual price appreciation, in the form of premiums, will occur in BCX's secondary retail market.

This premium will effectively be the retail margin on top of the primary markets' wholesale price + the value that investors place on the coin's seamless capability to transfer title of ownership over the bullion across international borders, in the form of a currency transaction.

Digital Currency Going Mainstream

Recent large price rises have coincided with the announcement by the Japanese government officially recognising cryptocurrencies as legal tender.

Following that announcement there was a sudden and huge surge of companies across Japan that said they will soon be accepting cryptocurrencies in the normal course of business.

However, this could be a problem for the Japanese public who really need a safe digital currency that lacks volatility.

Japan has a quiet and unusual trading market whereby households (usually the housewives) trade small amounts of currency every day or week in order to attempt to make a small profit and extra income. These quiet trades are astonishingly estimated to have a collective annual value of around USD$ 40 trillion!

These traders look for and need stable currencies to trade and are not trying to profit from trading volatile ones, where they are more likely to make losses.

Whilst this new access to Bitcoin and other cryptocurrencies is great, their extreme volatility makes it very difficult for these conservative households to use them as part of their currency trading strategies.

BullionCoin, as a safe digital currency, is ideally placed for what they are looking for and will create much needed level of stability in the cryptocurrency market.

Who Else Will a Safe Digital Currency Benefit?

In scenarios where there are problems in the financial markets, asset managers and investors will normally cash out of their positions and look to move it into an asset are deemed to be stable under those market conditions, such as the US Dollar or bonds.

BullionCoin will be able to act as a surrogate where asset managers can choose it as a safe harbour liquid currency that is fully backed by physical gold and silver. It would provide a highly sought after alternative to many assets normally used.

Asset Managers can find more information relating to how BullionCoin fits into their requirements versus overnight high counterparty risk bonds and this new ability to access monetized gold and silver.

To get access to this safe digital currency, you will need to create an account. Contact us if you need any further information relating how this new asset can support you.

Join one or all of our Social pages to keep up-to-date with important news & events, or just to learn & ask us questions about physical or digital precious metals:

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Or, use our registered hashtags #GetBullion and #BullionCoin to join our Tweets about physical & digital precious metals on the ABX & BCX.

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