Partnerships among blockchain-enabled protocols and applications are common. However, the dedication to work of one team isn’t always met by the dedication of another team. Thus, great developments are often held back by partners they relied upon.
Thus, the Crypto space is witnessing an increasingly common trend: new developments are trying to internalize as much of the operational and technological cogs as possible. The Kinesis Monetary System is an example of a project that internalizes nearly every aspect of its functionality in order to ensure there’s a harmonious operational efficiency within its infrastructure; this is necessary for a project that has ambitions to replace the world’s existing monetary system.
Building a Robust Foundation
The Allocated Bullion Exchange, which is the first e-platform for the trade of physical precious metals, has recognized the world-changing potential of blockchain technology. The world is racing towards a society that’s primarily cashless and adjusted to digital transactions and ABX aims to utilize its infrastructure to provide a new leg to the Crypto market.
ABX has launched Kinesis, a new monetary system that tokenizes gold and then allows the emitted currency to be transactable across the world through the infrastructure provided by Kinesis, Stellar blockchain technology, and ABX’s myriad partners.
The Liquidity
Naturally, building a monetary system backed by digital gold is a challenging task but ABX already possesses the ability to fulfill digital trade of physical gold. ABX connects global liquidity providers and bullion suppliers; this is a key foundation to providing a globally transacted gold-backed currency. While the current Crypto market has grown at an exponential pace, it does not possess the liquidity needed to sustain a global monetary system.
Physical gold, however, is an ultra-high demand asset and is one of the primary commodities used for value storage and wealth protection against inflation. Merchant suppliers (who supply to over a billion people across the globe), enterprise liquidity providers, market makers, and major institutional suppliers participate in this market. ABX provides an open system for these institutions to handle physical gold. Now, via Kinesis, it will bring these market players together to provide the liquidity foundation of Kinesis.
liquidity foundation of Kinesis.
Kinesis Monetary System begins with the minting of KAU coins, which are fully backed by gold. To retain an open system, anyone can mint these tokens. ABX already has the network to provide the physical gold supply and market makers needed to provide instant access to physical gold at the time of minting. ABX also possesses the means to store it instantly. Thus, when Kinesis is utilized to mint tokens, minters get instant ownership of the gold they purchase. This gold is simultaneously tokenized and issued upon the blockchain, thereby allowing the gold to be transactable.
The Gold is Yours
Prior to the minting process, the gold that is about to be bought is owned by a supplier. Once the payment for the minting is done, the gold that backs the KAU coins is owned by the minter (and rightfully so).
ABX has the global vault system needed to support the safe storage of the gold. Blockchain technology provides immutable ledgers of proof of the gold’s storage (in the vault). ABX merely provides the facility of storing the gold, however, gold depositories exist across the globe and as the Kinesis Monetary System grows, users will have the right to deposit their gold at the vault of their choice. This is the user’s rightful choice as they are the owners of the gold that backs KAU coins.
The ownership of the gold goes beyond the physical state. The tokenized gold is exclusively in the hands of the owner as only he/she will have the keys to access the currency that exists on the blockchain. The emitted tokens exist on the blockchain and key-based permissions grant access to the tokenized gold. From the moment gold is minted, the blockchain tracks ownership. However, Kinesis is more than just a means to own digital gold; it’s a means to transact and thus the foundational support goes beyond vaults and liquidity provision.
Transact and Trade
To facilitate transactions, Kinesis provides the payment channels.
Kinesis Monetary System will issue payment cards that will allow transactions across any physical store that supports payments cards like Visa or Mastercard. Naturally, as Kinesis emits digital currencies on the blockchain, transacting on digital fronts would be a seamless experience. Due to the highly scalable nature of the Stellar blockchain, the transaction fulfillment would be possible even as demand grows.
Transacting isn’t limited to minters.
Kinesis has taken the intuitive approach to developing an internal exchange to provide a great circulation mechanism for KAU. Minters will have the ability to sell the KAU they minted at the KCX (Kinesis Currency Exchange) and KBS (Kinesis Blockchain Exchange). Kinesis is creating the exchange platforms internally to ensure that the users of its monetary system do not need to rely on other exchanges to provide a facilitation for Kinesis currencies.
This also makes it easy to extend the liquidity network. At any point, a person can purchase KAU coins with both fiat and Crypto. Given that KAU will have natural trading pairs with Crypto, it will have an early utility as a stabelcoin in exchanges. However, Kinesis has the intent of making KAU coins a global currency that can be held and transacted without the consumer or merchants that hold them worrying about devaluation due to inflation.
Audit and Legal Framework
The blockchain provides a powerful means of validating on-chain currency ownerships and the fulfillment of trades. In the case of Kinesis, it can provide proof of gold-backing as the documentation that proves can be easily stored in decentralized, immutable ledgers.
However, Kinesis will go beyond this and will also pursue third-party audits.
It’s important to note that minting KAU coins involves minters buying gold from suppliers. ABX provides the platform for that physical gold purchase as it is the market-leader for this facility. It will also provide the vaults for such storage. However, the gold backing KAU coins is under the complete owner of the currency holder.
Regular audits will be done to ensure the vaults are properly secured and to check the accounting books’ valuation of the gold. Additionally, ABX’s own experience in the physical bullion trade market gives it the legal experience needed to ensure such a development moves forward smoothly. Thus, the development will follow a legally-compliant roadmap.