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Digital banking goes gold: an interview with Glint’s Ben Davies

The London-based fintech talks to AltFi about its mission to “democratise” gold, switching up the world of multicurrency banking.

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The London-based fintech talks to AltFi about its mission to “democratise” gold, switching up the world of multicurrency banking.

Launching today, Glint is a multi-currency account, complete with smartphone app and Mastercard debit card, that will allow users to store money in physical gold and convert it back into currency on demand or at point of sale.

For the first time ever, users can make day-to-day payments with their Glint Mastercard with multicurrency capabilities, including gold, at the interbank exchange rate with no fee or charge.

AltFi spoke to Ben Davies, co-founder and COO at Glint, to learn more about why the start-up chose gold, the challenges it has faced so far and what this could mean for the future of digital payments.

But first, how does it work? The Glint account lets customers  load up their account with Sterling which can then be used to buy fractions of physical gold bars, allocated in your name and held in real vaults in Switzerland.

But after that? Well, as Davies explains: “We attach a Glint Mastercard to your gold, so that when you go to a point of sale, you can transact immediately based on that gold account. We are converting, in the background, your physical gold into paper money, instantly.”

And it’s there that the real innovation lies. As we know it, gold is an immobile physical asset class that previously has been inaccessible to the digital banking platform. It seems an unusual choice for a multicurrency platform, given its difficulty to turn digital. But that didn’t deter Glint from trying.

“Gold is a physical asset, so it’s got its logistical issues. We started looking at it even as far as back as seven years ago, with the advent of e-wallets and e-money regulation,” said Davies. “We wanted to take an environment where we had all the rigors of compliance, and apply it to the gold world as an unregulated market.”

“Being able to really create a movement in the ledger of physical gold, in real time: that is what we solved for. One way we did it was to create our own ledger systems using micro-services architecture. It was about taking cutting edge technology and integrating into financial services. The innovation is in the application of that technology.”

But the technology wasn’t the only thing stopping the platform from achieving its goal of turning the asset class into a monetary democracy for the modern age.

“We also had to go through Swiss law and UK law to ascertain whether or not people could even own fractions of a bar in such a way so that should anyone default in the chain, it would still be your gold. That was a big outcome that took several years and lots of meetings.”

So if it took all that effort, why choose gold in the first place?

Davies summed it up in three words: “Because we can”. Despite gold being one of the oldest forms of money, it’s been off the market for most consumers since we stopped utilising the gold standard in the twentieth century.

But as he explained: “The more currency debauches, the more gold retains its value. Gold is really an equaliser, it’s a stabiliser.”

Unlike the cryptocurrencies of the 21st century, gold is a tangible asset which means that when applied innovatively, it can be used instantly at the point of sale as a form of currency without the other side needing to hold an account. With Glint, you can spend gold based on the interbank rate in real time, and have it accepted anywhere that takes Mastercard.

The costs of using Glint are minimal, with a 0.5 per cent fee for transfers between currencies on the app and free spending abroad. Over time, Davies estimates that as transactional volumes pick up, Glint can make that fee for spending less and less.

Part of gold’s appeal over other forms of digital currency, particularly to the younger generation, might lie in that stability. After all, there’s no risk of default from Glint or any of its third parties, as the physical gold is held legally in the user’s name.

Davies commented: “A lot of millennials experienced the 2008 financial crisis, and have begun to pick up and understand that the banking system itself and money are faith-based concepts. They also understand that currencies are floating, and are inherently volatile.”

“The way we’re pitching it is as a ‘world view’, and as an understanding that gold isn’t about wealth. If anything, we’re trying to demystify that view. You can save in gold on a regular basis, and before you know it, you begin to realise that you’ve bought into a stable currency over time.”

As Glint now looks ahead to the future, Davis mentioned some big plans for 2018. The app is currently available in iOS, with Android due to be released in Q1 next year. On top of that, he expects Glint accounts to have an IBAN, sort code and account number in Q3 or Q4, as well as launching opportunities for crowdfunding investment.

So what does Davies think we can expect from digital banking over the next decade? Well, it might not even be digital.

“It’s a bigger question that’s less about digital, and more about moving towards a cashless society. I always walk around with a couple hundred pounds in my pocket, because if the banks ever go down, I still have cash in my pocket. With our system, if the banks and processes go down, as long as the internet is working you can send money peer to peer to pay for things, and eventually merchant-to-merchant.”

“We’re in a fourth wave change of money, and the advent of bitcoin has clearly shown a distrust of traditional money and the frictional cost of payments. Stripping all of that out, I think it’s a really exciting time to be engaged with it. We’ve got some young people with us from all walks of life. I think if we can recreate that zeitgeist, and gold does lend itself to that, then watch this space.”

Glint is available now on iOS in the UK and Europe, with plans to launch in the United States and elsewhere in 2018.

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