SINGAPORE, Nov. 19, 2018 /PRNewswire/ -- In recent weeks, the global gold industry blockchain alliance, Goldlinks, has been forging alliances with gold mines around the world at an unprecedented pace. Soon after concluding a strategic partnership with Erd Khul LLC, a Mongolian gold mine, Goldlinks recently announced plans to collaborate with a large gold mine in Africa on gold extraction, the creation of gold-backed digital assets, mine acquisitions, and more. The mine has proven gold reserves of 520 tonnes, giving it an in-ground value in the order of $120 billion and signaling bright prospects for the future.
Goldlinks expands reserves yet again
This latest partnership will add another 520 tonnes of physical gold to Goldlinks' reserves, which are used to collateralize the issuance of the Global Gold Cash (GGC) token. GGC is an ERC20-compliant token that operates on the Ethereum blockchain, and is the first gold-backed digital currency to be used for international trade settlement and commerce. Currently, 100 GGC is equal to one gram of gold, which means that every GGC token is backed by 0.01g of physical gold.
The addition of new reserves will build trust in the physical backing of the GGC token. Goldlinks also accepts third-party oversight of gold assets and periodical audits to ensure the highest level of transparency and security. Moreover, because GGC is pegged to gold, it has unique advantages over other 'stablecoins' that are pegged to government-issued currencies. For example, GGC is a good inflation hedge, is resistant to currency fluctuations, and is secure and stable.
GGC is already used as a unit of account and settlement tool for international trade. It can also be used in commercial applications and should gain increasing traction among consumers thanks to its ability to provide fast, convenient, and secure payments.
GGT: The silver bullet for gold mine finance
Global Gold Token (GGT) is a utility token issued by Goldlinks that aims to establish a unique ecosystem in the gold industry. The ecosystem has a dual-token structure comprised of the GGT and GGC tokens. In exchange for purchasing GGT, members of the Goldlinks community earn the right to invest in gold mines, buy gold at a discount, and share community benefits.
Mines that have already partnered with Goldlinks have agreed to accept GGT at market price from investors in exchange for an equity stake. In other words, by investing in GGT tokens, individual investors can indirectly invest in gold mines. Conversely, these tokens provide a much-needed source of finance for gold mines, which face significant up-front capital costs.
Running a gold mine requires ongoing capital outlay. However, because many small and medium-size mines can't go directly to the public to raise funds, their operations are often interrupted, and they don't always realize their full potential. By partnering with Goldlinks, mines can offer equity in exchange for GGT, enabling them to raise capital from the market directly.
This arrangement also benefits ordinary investors: traditionally, the gold mining business has had high financial and technical barriers to entry that have held back retail investors. However, Goldlinks' gold digital currency solution puts mine owners and investors in direct contact, helping the latter to generate returns on small equity stakes and reap rewards across the gold value chain. Going forward, this development could revolutionize the gold industry and maximize benefits for both producers and consumers.