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Kinesis Money
UK-based Kinesis Money, builders of a crypto-currency the value of which is tied to physical gold and silver, is entering the Indonesian market. Many of its 260 million citizens don’t have regular bank accounts but internet use is almost universal.

Each currency unit is locked at 1:1 with real gold assets, and users are able to physically redeem their holdings when they want. The currency is also, its framer says, designed to be as easy to spend and use as any debit card or mobile wallet tied to a traditional modern bank deposit account, including for smaller transactions and micropayments.

While pitched at people who certainly don’t fall into the high net worth category, there is of course nothing to stop HNW clients from using the currency. Also, by filling a big gap in the banking space, such technology may fuel economic development and, with it, HNW business owners in the future.

Kinesis Money has partnered with Allocated Bullion Exchange (ABX) and the national commodities exchange of Indonesia, Jakarta Futures Exchange (JFX), to establish spot Sharia Gold contracts to enable the physical trading, vaulting, vault management and logistics of Sharia compliant physical bullion. Kliring Berjangka Indonesia (KBI), Indonesia’s state-owned commodity clearing house, will have oversight responsibilities; Kinesis as the Indonesian vault provider, when operational; ABX and PT POS as physical bullion agent and logistics provider.

The organisation said it is targeting Indonesia because the country remains “severely under-banked” with less than a third of its 260 million citizens owning a bank account, while mobile adoption and internet access is widespread and gold is a well-known form of investment allowed under Shariah law in the predominantly Muslim nation.

“Countries such as Indonesia hold staggering economic potential, but the lack of infrastructure for its citizens to engage in financial transactions commonplace in mature markets presents a major barrier to unlocking that potential – the UN itself has made clear that greater financial inclusion is one of the most effective ways of catalysing social and economic progress,” Thomas Coughlin, CEO at Kinesis Money, said.

“In previous eras the focus in regards to this ‘under-banking’ problem has been on how to achieve greater penetration for traditional banking services. However, what we at Kinesis have achieved here with our partners shows that this is unnecessary, the world has moved on,” he added.

Kinesis Money has worked closely with Indonesian authorities and religious organisations, and has partnered with a number of major Indonesian companies, including the state-owned post office, PT POS Indonesia.

Indonesia introduced new rules in February this year for gold-backed trading, opening the doors to the initiative, Kinesis said. The rules say that any online or exchange-based physical gold trading product must be deliverable and physically located within Indonesia. To this end, Kinesis has agreed, together with OZL (part of the Liechtenstein Precious Metals Group) and the state-owned post office, PT POS, to build, develop and operate Indonesia’s first purpose-built bullion vault according to international best-in-class standards.

To enable widespread take-up of the new system, Kinesis Money has partnered with PT Bullion Ecosystem International (BEI), an Indonesian e-commerce and financial technology company which provides mobile applications for gold trading, collateral gold finance and Shariah gold financing.