UK’s Royal Mint Creates Gold Backed Cryptocurrency

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The body responsible for providing the UK with all the physical money they have in circulation, the Royal Mint, have launched their own cryptocurrency. It’s called Royal Mint Gold (RMG) and the idea behind it is to provide a safe, secure, cheap, and convenient way for people to hold gold as an investment.

In an interview with the UK’s Express newspaper, Tom Coghill of the Royal Mint’s RMG sector stated:

“We already sell physical gold through our Royal Mint Bullion business and we sell coins and bars. In this sense what we’re doing here is simply making that a digital business and allowing for our clients to be able to hold gold for the first time on a blockchain basis. The difference between what we’re doing and what other crypto digital assets is that we’re a physical tangible asset. One gram on our blockchain represents one gram physically in our vault. So it’s real gold you’re holding when you’re holding our RMG.”

Essentially, what the Royal Mint are doing is storing gold for people and tracking who owns it using a blockchain. It’s really not all that revolutionary.

Coghill went on to trot out a tired argument that many gold bugs rely on when defending the value proposition of the planet’s most widely regarded precious metal. For him, the fact that people have been using gold to store value for over 6,000 years makes it a better investment than Bitcoin or other cryptocurrencies. However, what seems strange is that RMG provides a way for folk to “own” gold but the Royal Mint remain the custodian of the bullion. Many who want to invest in gold do so because they fear a massive breakdown in society would render money useless and in which case, gold would be a suitable tool for barter in the place of cash. In such a scenario, is the Royal Mint really going to dishing physical metal out in exchange for RMG tokens? It seems doubtful…

The UK isn’t alone in their creation of a gold-backed cryptocurrency. In Australia, the Perth Mint claims to be doing something similar. Richard Hayes, the Chief Executive there told the Express:

“I think as the world moves through times of increasing uncertainty, you’re seeing people look for alternate offerings… And you’re seeing this massive flow of funds into the likes of Bitcoin at the moment because people are looking for something outside of the traditional investments.”