Gold is a component of a diversified portfolio and can help protect investors against adverse market conditions in traditional investments like equities and debt. Gold also admittedly has its own fan-following and attracts a class of investors known as gold bugs.
Yet, as an investment, holding physical gold has always been troublesome. The fact that it needs to be stored in a safe place so that it can’t be stolen, misplaced or robbed has always been an issue. There is also the question of how to buy and sell gold with the assuredness that it is pure. Selling gold requires time, energy and effort and thus the liquidity of gold is certainly less than cash.
Now, however, Panama-based company Orocrypt is creating a “crypto-alternative” that will enable easier trading, holding and investing in precious metals, including gold.
Orocrypt is putting precious metals on the Blockchain
Orocrypt is all set to launch an equity token followed by a gold token in October, where each token will be representative of 30 grams of LBMA quality gold. This token will be fully backed up by physical gold which will be stored safely and will be audited.
The token will not only be fully convertible into physical gold at the demand of the investor but also compatible with all Ethereum wallets. Orocrypt is, thus, bringing precious metals to the Blockchain.
The company has built robust mechanisms surrounding this process with gold being stored at diverse geographical locations like the Cayman Islands, Switzerland, Liechtenstein and Hong Kong, and the auditing will be carried out by Société Générale de Surveillance SA.
Orocrypt ICO all set to roll out
The Initial Coin Offer (ICO) of the OROC token, which represents common shares in Orocrypt Inc. and gives the token holder rights and privileges akin to shareholders, will begin on June 14, 2017. Only 45 percent of Class A tokenized shares are being sold, so that means there are only 500,000 out of the total 1,112,000 tokens up for grabs.
The price of each share is €9 and these shares are of a non-divisible nature, which means that there will be no shares in decimal points. If during the token issue the investor funds sent to Orocrypt are in excess of multiples of nine, the fraction will be donated to certain charities.
Investors are eligible for a five percent discount on the token price in the first week of the ICO, and in the second week, a two percent discount is available.
Voice of industry experience
The people behind Orocrypt each have more than 30 years of experience in large international investment banks, insurance and leisure groups.
Alejandra de Gaustad, the founder and CEO, has held a distinguished banking career and has also been a member of the Board of Trustees of the Global Association of Risk Professionals. She has also been an independent financial consultant since 2003.
Darlene Hart, the CFO, founded US Tax and Financial Services Ltd, Switzerland in 1986 and is an expert on matters related to cross-border tax and compliance. José Antonio de la Cerda is the CEO of Grupo Futuro, a prestigious Ecuadorian insurance and leisure group since 2005, supervising the boards of eleven companies with a combined income of $450 mln as of 2016.
Margaret Bentham, director of Orocrypt, is the co-founder of Onlime Group and has more than 30 years of experience in international investments.
Real physical gold sets Orocrypt apart
Digitizing gold is not a new idea. At the moment, it is possible to invest in Gold Equity Traded Funds (ETFs). However, Orocrypt is unique as it will offer a new approach to gold ownership.
We talked with Alejandra de Gaustad, CEO of Orocrypt, and she tells us:
“The Orocrypt business model consists of digitizing assets, whilst a gold ETF is an exchange-traded fund that tracks the price of gold. ETF investors cannot take delivery of their share of ETF gold reserves. They benefit from the gold price movement. Orocrypt is a company that will provide its clients with digitalized assets in the form of Ethereum tokens as proof of ownership. Our first token will be a digitalized gold vault receipt for 30 grams of fine gold. In the near future, we plan to digitize receipts of silver and platinum. Further down the line, we plan to digitize other asset classes, such as portfolios of a mix of cryptocurrencies and precious metals. These portfolios will be managed quantitatively in order to produce the maximum return for a given risk.”
Interestingly, the CEO also revealed that it is possible to directly take delivery of physical gold. Clients can receive gold in person or at their registered address as long as they are ready to bear the delivery costs. The only caveat being that physical gold will not be sent out by Orocrypt to non-registered addresses or released to third parties.
Making gold and cryptocurrencies more accessible and usable
Can cryptocurrencies backed by gold and other assets one day be widely used as a medium of payment? Will digital assets decide what the value of a cryptocurrency is? Orocrypt thinks this may be the case in the future.
Gaustad tells Cointelegraph:
“We are neither the first nor the only ones offering some form of digitized precious metals, although our gold tokens have properties that make them different than others available on the market. In our view, this is good for everyone. We welcome the existence of those competitors. Our chances of success would be less if we were the first or the only ones. The precious metals market is so big that there is ample space for many participants. All of us are contributing to making these products more known and accepted. We further believe that asset digitization could be a significant part of the crypto ecosystem. One of the reasons being their lower volatility.”
Certainly, bringing stable assets to the crypto universe is an interesting idea and there are future plans for Orocrypt as well to broaden their horizons. Although the company, operating from Panama, at the moment can’t take US persons as clients, in the future they want to explore their options worldwide, including the United States.
The CEO of Orocrypt says:
“Depending on our future clients’ locations, we may establish subsidiaries in those places where we could offer a better service to our clients. We also plan to set up a subsidiary in the US to service the US market.”
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