Goldzip launches in Hong Kong with US$300 million worth of physical metal in reserve from exchange members
- Goldzip tokens will be matched against physical gold, backed by an audited reserve of US$300 million worth of the precious metal
Hong Kong’s local gold exchange will back its new platform for trading digital gold with an initial US$300 million worth of the precious metal, with the minimum reserve to be guaranteed by members of the Chinese Gold & Silver Exchange (CGSE) for three years.
Participating members in the new platform called Goldzip are undergoing an audit of their physical gold inventory before it is moved into a vault at the exchange, said CGSE executive director Calvin Ng.
The auditing is for verifying that each Goldzip digital token that CGSE issues will be backed by one gram of gold.
Ng said the mission of Goldzip, which launched on Wednesday, is to make the transfer and payment with gold easier through the use of asset-backed tokens which will be linked to a blockchain ledger technology.
Based on the current price of HK$12,110 (US$1,543) for every 999.9 tael gold contract traded on the exchange, that would mean each digital token can be bought for about HK$320 per gram.
The exchange is seeking to develop an ecosystem that will allow investors to buy and sell Goldzip across cryptocurrency exchanges, over-the-counter brokers, and gold retailers, he said. Ultimately, spending with the tokens would also be made easier as Goldzip has lined up some 30,000 merchants across Southeast Asia. For every transaction, Goldzip will charge a transaction fee equivalent to 0.001 token.