Gold never goes out of fashion. A major global market, estimates suggest that almost $3 trillion is held in physical stores by investors and banks, with a further $400 billion in trading volume. The investment proposition is undoubtedly a compelling one – a liquid asset and a strong driver of global economies, this precious metal also offers investors long-term returns and a way to diversify portfolios against risk.
Within the investment community, however, it’s a tale of two halves as bigger investors benefit from earlier and easier access to emerging opportunities while retail investors, who would typically invest in gold through avenues such as ETFs, often lack the necessary knowledge or ability to invest directly and reap the same rewards. Until now.
The rise of cryptocurrencies and blockchain technologies has opened up extraordinary possibilities that were not available before. Leading the charge for the next generation of fintech innovators is GoldFinX, a breakthrough platform focused on addressing a gaping need in a market that has remained underserved while breaking down barriers to entry for smaller investors. Specifically, by shining a light on a sector that holds tremendous promise yet has been hugely neglected – artisanal and small-scale gold mining (ASGM).
By harnessing the strengths of blockchain technology, GoldFinX is democratizing the process for investors of all sizes by giving everyone the same access to selected mines with considerable growth potential. Most importantly, this is directly linked to making positive and much-needed changes to the lives of millions of people and the environment.
The Human Factor
In recent years, ASGM has grown to become a significant source of gold production, representing 20% of the gold supply worldwide, and accounting for 90% of the total workforce. Among those working in ASGM are millions of men, women and children, who form part of the overall 40.5 million directly engaged in artisanal and small-scale mining. According to figures from the IISD, this number has almost tripled in twenty years.
But at what price? The picture loses its sheen if you look deeper into the conditions for many of those involved in small-scale gold extraction.
In rural communities where employment is scarce and people desperate to support their families are unable to do so from agriculture alone, local small-scale gold mining operations offer a lifeline. However, the vast majority work in ‘informal’ mines that do not comply with any industry standards or safety regulations.
With no security or legal protection, these people face the everyday reality of serious risk to their health and, sadly, reports of injuries and death are not uncommon. Largely unskilled and untrained, miners in small-scale operations also rely on very basic, poor-quality tools and dangerous methods to do their job. Trapped in a cycle of grinding poverty, they have no alternative choice for survival.
In addition to the horrific working conditions, current ASGM practices pose a substantial ecological threat. The widespread use of toxic chemical processes, including mercury and cyanide, destroys the local environment and causes irreversible water and air pollution. In fact, the ASGM sector is responsible for nearly 40% of the world’s total man-made mercury emissions.
At its core, the problem is that it’s impossible for small-scale miners to access the financing they need for modern resources and technology to enable environmentally-friendly and safe extraction. Avoided and largely unknown by mainstream lenders, the sector faces a real blockage to progress.
In order to prevent further devastating social and environmental consequences, it is vital to level the playing field and accelerate the formalization of the ASGM industry.
How can Crypto Redress the Balance?
With current models proving ineffective, an innovative approach to crypto finance holds the answer in a space ripe for disruption. By its very nature, digital currency is democratic and offers the flexibility not available in traditional institutions, lending itself perfectly to fundraising, exchange and transactions.
GoldFinX’s digital coin, the GiX, combines the strongest attributes of conventional utility and security tokens to create a new vision for the future of cryptocurrencies. An enhanced utility token with asset protection, it will be easily tradable by retail investors but will also become a new micro-currency for millions of unbanked miners to pay wages and purchase supplies.
Backed by a solid and highly profitable business model, the GoldFinX platform has been designed to facilitate the flow of capital from investors – using GiX – into ASGM mines worldwide, which should enable them to finance mechanization, cover operating costs and adhere to best practice for clean gold production.
From an investor’s perspective, the manifold properties of blockchain technology enable instant and secure cross-border trading of the coin without the need for third party involvement. Crucially, it is also the key to introducing a fully traceable and verifiable supply chain, taking care of regulatory due diligence for responsible investors who want to see the origin of the gold they are investing in.
Looking ahead, this solution could be the one to finally unlock the full value and scale of the mines’ capabilities, transforming them into credible, high-quality operators and kick-starting immediate wealth creation.
In return, GoldFinX will receive a portion of the gold produced for the duration of the mine’s lifecycle, stored and accumulated over time in Swiss bank vaults to provide an underlying guarantee for investors in case of any future instability.
This additional safeguarding measure is the result of a Protected Coin Offering (PCO), a fundraising model pioneered by GoldFinX. It ensures that investors benefit from holding a coin protected by a constantly growing asset reserve that steadily appreciates in value – with projected revenues of over €15 billion over the next decade.
Redefining the Future of the Gold and Financial Markets
The GoldFinX model has never been seen before in the market and delivers a powerful hedge against the volatility typically associated with cryptocurrencies. Potentially heralding a new subsection of the financial markets, the same ‘crypto finance’ methodology could be successfully replicated to revolutionize many other industries.
Through a truly sustainable mechanism that leverages new technology, GoldFinX is not only resolving the funding challenges of the ASGM industry but is making this investment opportunity accessible to the ordinary person for the first time. Simultaneously, it adds value by driving meaningful social and environmental change, giving hope to previously marginalized communities.
GoldFinX’s approach complements the socially and environmentally responsible investing movement that is gaining traction worldwide, as investors realise their duty to view each decision in terms of its potential impact. In the past two years, environmental, social and governance (ESG) investing has seen a 60% spike, and integrating these factors has been proven to deliver enhanced performance in the longer term.
It is important to recognise that making good investments and helping to make the world a better place are not mutually exclusive. ‘Doing good’ is just good business sense.
GiX will be launched for public sale from 1 July.