Cryptocurrencies have provided a great service in regions that are facing economic strife.
Crypto-aware residents of a country that faces economic decline try to exit into a number of established coins. WebMoney is an example of a common path they utilize to acquire Crypto. This was witnessed in Turkey when the currency began to decline and has been witnessed in Venezuela for an extended period of time.
Such moves have helped residents of dismayed economies quickly secure their wealth from dismay as hyperinflation swiftly devalues the local currency. Digital currencies, though, have served primarily as a means of preserving and storing wealth. Some shops in Venezuela have begun accepting Bitcoin but the volume of such participants is low and the decision came after many months. The cause for this is that cryptocurrencies are in a nascent stage and only a small portion of the world understands them.
There is, however, one asset that is unquestionably associated with value all across the globe: gold.
The Next Step for Digital Currencies
Bitcoin’s ability to provide a store of value has been accepted by many. However, there’s a need to affordably convert the wealth stored in Crypto into a spendable form.
Kinesis is a new monetary system based on the New Gold Standard.
Gold is globally associated with value and it was once the primary means of payment. However, it was heavy, difficult to divide, and a burden to transport. The Kinesis Monetary System aims to create a New Gold Standard, one where gold is available in a tokenized form. Gold-backed Kinesis coins are emitted when a person mints them by using fiat or cryptocurrency to buy them and then have them deposited in a network of globally accessible vaults.
Those who mint the KAU coins can then sell (on exchanges), hold, or spend them. The minting process is incentivized as the person minting the coins is given a portion of the network’s fees.
These fees are derived from the transactions that are based on KAU coins, which can be transacted digitally on a wallet-wallet basis or via cards. Kinesis exists on a fork of the Stellar blockchain and can thus not only scale its transaction flow, but also benefit from Stellar’s low transaction costs. The result is that payment card fees which hover at about 3% and reduced to just 0.5%.
Access to Spendable Gold
The people living in dismayed economies have already proven to have access to cryptocurrencies. The Kinesis Blockchain Exchange (KBE) will give them the option to move from those cryptocurrencies into KAU coins. People may choose to retain their wealth via other Bitcoin or gold-backed KAU coins, but they will have a near-instant opportunity to convert their Crypto in KAU when the time comes to spend their wealth.
The KAU coins can then be converted into fiat at will through the Kinesis Currency Exchange (KCX). Though, this option only becomes rational once the people in a dismayed economy exit into a better one. Meanwhile, Kinesis coins remain backed by gold no matter where the person holds them.
The benefit the Kinesis Monetary System provides is the fluidity of the gold-state of the currency; KAU coins can be seamlessly converted to and from fiat and cryptocurrencies.
Thus, not only do people earn near-instant access to a currency backed by something that has been associated with value for millennia, but they also get the ability to spend it. Thanks to the Stellar blockchain, KAU coins will be movable quickly and at low costs; thus, people in dismayed economies will be able to utilize major cryptocurrencies to quickly access a more spendable cryptocurrency.
The factor that makes KAU coins valuable is that they are backed by physical gold.
While access to physical gold is tough in a dismayed economy, a digitalized form, only emitted when physical gold is deposited into a vault by any person (anywhere), of gold will be made widely accessible by minters who would be incentivized to mint gold to then sell it onwards on the KCX and KBE.
Thus, physical gold will be made highly accessible, liquid, divisible, and convertible between both major Crypto and fiat.
The best factor is that these benefits would be available without bias; people across the world will be able to access KAU coins due to the fact that minters are incentivized to sell for both Crypto and fiat. Thus, merchants, in economies of any state of robustness, will have the ability to accept payment in KAU as not only are the transactions cheap and fast, but they are convertible into any Crypto and fiat.
While residents of weak economies are an early market for KAU coins, gold-backed Kinesis coins just as easily accessible and useful in other countries.
Kinesis is being launched by ABX, a well-established online bullion exchange which already has much of the infrastructure needed to make Kinesis a reality. Further development of proper blockchain integration in underway and a demo functionality of minting is available. The team is leveraging their network to grow the usability of KAU coins across merchants across the world.
The fact that KAU coins can be converted at any point into fiat (and Crypto) make them equivalent to payments of those currencies. The differentiating competitive edge is that KAU can be transacted at a fraction of the fee offered by current payment networks.
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💡 Whitepaper: https://kinesis.money/documents/translations/kinesis-whitepaper-summary-en.pdf
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