Thomas Coughlin is the Chief Executive Officer (CEO) of Kinesis Money as well as Allocated Bullion Exchange (ABX). He has worked in the investment, funds management and bullion industries for approximately seventeen years. His professional portfolio management career spans the foundation of the boutique investment company, TRAC Financial, to the establishment of a highly successful Absolute Return Fund.
Thomas has dedicated a significant part of his career working collaboratively to build the complex systems of a cross-border international bullion market with an extensive global network of central bankers, brokers, fund managers and advisers. His experience, extensive network and broad knowledge of capital markets, enable him to deliver exceptional value and insight to all stakeholders.
What initially got you interested in precious metals?
After first leaving university, I began along the career conveyor belt you might expect of a financial graduate. But everything changed when I encountered the precious metals world. It just all seemed so outdated, and so, I saw an opportunity.
I couldn’t help thinking how inefficient, complex, and fractured the bullion markets were. There must have been a better way. Since then, I have dedicated years of my career to enhancing the experience of trading precious metals with technology.
The Allocated Bullion Exchange (ABX) was a fusion of my network of financial institutions and my knowledge of technology to create an infrastructure that made exchanging and clearing physical precious metals smoother.
As cryptocurrencies emerged, I instantly recognised the vast potential for a reliable digital currency of stable value using precious metals. My ambition was to introduce a gold-based digital currency that could have the everyday utility of a fiat currency, the borderless value and efficiency of cryptocurrency, but, crucially, none of the inherent volatility.
Could you discuss how Kinesis was formed out of the Allocated Bullion Exchange?
Kinesis is a project that spun out of the ABX, which was founded more than 10 years ago. It was the first electronic institutional exchange for allocated physical precious metals and, as such, established a good reputation quickly.
From the success of ABX, it became clear there was an opportunity in providing this service to a broader demographic by taking the concept of merging intelligent technology with the stable value of precious metals a few leaps further. For this, the ABX system provided the perfect foothold.
The company name we opted for – Kinesis – reflects one of our key selling points. Kinesis describes the motion in response to a stimulus, which represents a core concept of our business model: the yield system. Through redistributing a share of transaction fee revenue back to our users, we offer the first non debt-based yield on gold and silver in economic history.
Why should investors consider purchasing tokenized precious metals vs the current gold and silver storage solutions?
There will always be demand for precious metals, however, historically, the problem for most people was accessing them. Gold investing was usually reserved for major financial institutions and the mega-wealthy.
Previously, owning gold came with various costs, such as storage and insurance, all of which would chip away at the benefits of holding the metal as a hedge against market turbulence. Our system on the other hand offers precious metals storage without charge, removing the primary expense for investors. We do this by using a portion of the revenue from our transaction fees to cover all the traditional costs.
Another advantage is liquidity. The physical realities of precious metals make them very difficult to exchange and move. Through Kinesis blockchain wallet technology, our users – whether an individual or organisation – can easily send digitised physical gold or silver anywhere in the world, with settlement times of just 3 seconds, 24/7.
What are the advantages of using gold or silver as a currency?
Precious metals are a fantastic option for transactions now they can be exchanged digitally.
Looking at the alternatives, fiat currencies are a poor store of value, prone to inflation, with value that decreases over time. Furthermore, global government debt is rising to unprecedented levels, perpetuating unsustainable debt-based economics and raising questions on the stability of fiat.
Cryptocurrencies have stepped onto the scene as a potential solution, but their inherent volatility also makes them a poor store of value, and a non-viable day-to-day currency. Cryptocurrencies also lack the fundamental intrinsic value and stability to enable global adoption as money. At the same time, stablecoins backed by the US dollar, such as Tether, are simply a reimagination of fiat, shifting the same age-old problems onto the blockchain and solving little.
In a bid to solve all these problems and provide stability, Kinesis has combined the timeless value of physical gold and silver with cutting-edge technology, transforming precious metals into a digital currency, with the everyday utility of fiat, the borderless value and efficiency of a cryptocurrency, but none of the inherent volatility.
Could you discuss how Kinesis offers rewards that are based on the success of the platform?
Part of what makes Kinesis unique is that we give more than half of their global transaction fee revenue back to their users. So not only does Kinesis bring back a true store of value to the global economy but it also rewards all who participate along the way. We call this the Kinesis Yield System.
Kinesis defeats Gresham’s law, by incentivising spending through our revolutionary yield system: 57.5% of all transaction fee revenue gets redistributed back to our users, whether holding, trading or spending your Kinesis silver or gold. The yield system encourages users to spend good money, gold and silver, while providing an attractive prospect for any investor.
A 15% share of all the fees collected across the entire system are shared with everyone who owns gold with Kinesis – we call this the Holder’s Yield. The yields do fluctuate but are based on transaction fees. From October 2020 to October 2021 this has delivered a 6.99% return, which is a huge percentage – bigger than many other saving and investment vehicles. The yield will never be negative as it’s based on the transactional volume within the Kinesis system.
How is gold and silver stored in the system and who holds the title?
Kinesis gold and silver is stored free of charge in an independently, bi-annually audited extensive vaulting network, provided by ABX. We have 7 partner vaults across the world in London, Singapore, Sydney, Dubai, Hong Kong, Switzerland and Liechtenstein.
All gold and silver bullion is fully redeemable. Kinesis currencies are 1:1 allocated and backed by fully insured physical precious metals. Our blockchain technology provides a decentralised registry for the allocated precious metal, bringing a digital level of quality assurance, fairness and high liquidity, by facilitating transfers peer-to-peer.
The ABX system provides the highest levels of transparency, accessibility and accountability with respect to all services associated with the provision of trading, storing and transporting bullion in connection with the Exchange. All bullion has a verified audit trail with multi-layered third-party audit and verification in place, and a regularly audited and transparent holdings system. This allows for superior security, while eliminating the risk of fraud because ownership is tracked using blockchain.
Are the precious metals segregated in the system?
Kinesis offers two programs, a fully allocated pooled program and a segregated storage facility for deposited metals.
In both cases, legal ownership of the metals is recorded through blockchain technology. In this way, Kinesis users can instantly buy, sell and trade just a fraction of their holdings, and utilise physical gold and silver for everyday transactions. Through offering digital ownership of physical holdings, it’s never been this easy to own precious metals in the history of investing. With the segregated storage facility, users are able to deposit and maintain access to their personal coins and bar collections, while accessing all the benefits of holding metals with Kinesis.
If a user wishes to withdraw their metals, we have ensured that ease and value of redemption is a core component of our offering. From working in the precious metals space for over a decade, we understand the imperative assurance redeemability brings to our investors. For this reason, the Kinesis Monetary System offers a minimum withdrawal requirement five times lower than the market standard, starting at just 200 ounces for silver and 100 grams for gold.
Additionally, the cost of taking delivery on your metals is among the lowest in the industry. One of our users calculated the total cost for purchasing and redeeming a 200oz silver bar working out at around 8% above spot price, which is exceptionally well-priced in the industry.
What are some of the white-label solutions that are offered for business clients?
Kinesis’s technology can also be leveraged by both businesses and financial institutions in various ways, depending on what the organisation is trying to achieve.
We design and build bespoke applications that allow our customers to make use of innovative financial and trading technology. With the ability to buy, save, and send digital gold and silver with limitless liquidity, businesses and institutions alike can drastically improve efficiency across their financial and payments infrastructure, increasing the speed of transactions and lowering costs.
One project I am particularly proud of is our government-backed project with PTPOS in Indonesia. This is the first gold-based sharia-compliant financial infrastructure ever created and one of the largest public private partnerships in economic history.
The Kinesis-powered PosGo Syariah digital platform allows all Indonesian citizens with a mobile phone and internet to access low-cost, efficient financial services. Of Indonesia’s 270 million population, 80% of the nation is unbanked or underbanked. At the same time, more than 80% of the Indonesian citizens are active smartphone users. There was a clear opportunity to provide core banking and payments services via smartphone.
Crucially, the gold-based nature of Kinesis means it’s Sharia compliant. The PosGo platform enables Indonesia’s predominantly Islamic population to manage their wealth, trade, save and transact in debt and interest-free gold bullion, via mobile device. Unbanked citizens once excluded from the financial system are now able to securely save funds for their future and use low-cost, instant, mobile cross-border payments, which free citizens from the extortionate fees and skewed exchange rates of leading local remittance providers.
This project shows just how the Kinesis technology can be applied in the real world at a national level to benefit individuals and society. The technology is set to be applied across Indonesia to improve an array of government-run services and enhance citizen experience in utilities, transport, healthcare and lending services.
Is there anything else that you would like to share about Kinesis?
The invention of a yield-bearing, digital, physical gold-based monetary system could not be timelier. Today’s economic climate is unpredictable; inflation is beginning to soar and there’s a lot of risk among traditional assets.
Kinesis Money is a haven for individuals to safeguard their wealth and allows for a fairer and more stable form of money, but it also promotes sustainable growth. The system allows people to use a tangible asset in the real economy, which pumps a stable, debt-free store of value into the financial system while rewarding all who participate with a yield. It is designed for stable growth by providing persistent value, all of which provides debt-free economic growth, which to me is an exciting prospect.
I believe there’s going to be a growing movement away from debt-based economics, which is what using gold as a currency provides. It’s exactly what the global financial system needs right now.
Thank you for your detailed responses and for sharing with us the advantages of the Kinesis platform. Readers who wish to learn more should visit Kinesis Money.