Micro Gold: Assessing the Use Case of DLT and Physical Gold

by John Dwyer, September 1, 2016
Product Trends/ Reviews
Global, EMEA

Abstract

Celent has released a report titled Micro Gold: Assessing the Use Case of DLT and Physical Gold. The report was written by John Dwyer, senior analyst in Celent’s Securities & Investment practice.

 

In the recent report Beyond the Buzz, Celent considered integrating distributed ledger technology (DLT) into a number of different use cases, most of which are established within the banking and capital markets industries. 

In Micro Gold we consider the impact of combining physical gold with DLT, which together have the potential to establish a new platform upon which a variety of financial services can emerge — including payments and wealth management.

Instantaneous transaction settlement, micropayments, cross-border remittances, and insulation from FX volatility present key benefits of Micro Gold to individuals, merchants, and institutions alike. Critically, this use case lacks any significant established players, has global relevance, and is demonstrating advanced rates of adoption.

“Micro Gold combines interoperability with legacy systems, in-built regulatory compliance, seamless user experience, and a developer API platform without the inertia of incumbency faced by other use cases. It is also demonstrating advanced rates of adoption such that Micro Gold is one of the leading use cases for DLT,” says Dwyer.

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned subsidiary of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

Executive Summary

1

 

Goldmoney Inc.

2

 

Key Research Questions

2

Introduction

3

Negative Nominal Interest Rates

4

 

Breaking Business Models

6

 

Macro, Systemic, and Currency Uncertainty

7

 

Store of Value

8

Traditional Gold’s Role in the Financial System

9

Micro Gold

11

 

Positive Carry

11

 

Addressing Traditional Drawbacks

11

 

The Double Whammy

11

Company Profile — Goldmoney Inc.

12

 

Goldmoney Network

12

 

AURUM Technology

13

 

Micropayments

14

Rapid Payment Rate

16

Key Drivers of Micro Gold Adoption

17

 

DLT’s Defining Attributes

20

Sizing the Market Opportunity

21

Micro Gold Vs. Other Gold Securities

22

Micro Gold Use Case in Context

23

Conclusion

25

Leveraging Celent’s Expertise

26

 

Support for Financial Institutions

26

 

Support for Vendors

26

Related Celent Research

27

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