For the first time in South Africa and probably on the continent, cryptocurrencies are being exchanged for gold and silver. Crypto Magazine speaks to Richard de Sousa, Senior Partner of
AltCoinTrader, the South Africa company that launched the initiative on 5 August 2019.
Crypto Magazine: Changing cryptocurrencies against gold and silver is something unheard of in South Africa, and probably in Africa. Some people will definitely wonder why would you attempt to take such a risk given the heated debate going on around its value?
Richard de Sousa: To the best of my knowledge AltCoinTrader is the first crypto exchange in history anywhere in the world to offer real world assets like gold and silver. We have done this because it seems an obvious choice to allow clients to diversify their portfolios.
So if you feel that there is a lot of volatility in the market you can move between more stable commodities like gold or silver where there are still very good investment vehicles and the volatility is not the same as the cryptocurrencies.
This just gives AltCoinTrader clients a greater trading option, a greater facility to trade and also a bigger portfolio option. Clients now have a choice to not only hold crypto but to have a more
diversified real world asset portfolio.
Crypto Magazine: how does it work?
Richard de Sousa: It was launched on 5 August 2019 and it is going well so far. All gold and silver, or any other precious metals traded on the platform will be represented and fully backed by real
physical gold and silver or the relevant precious metal.
Gold and Silver is traded in ounces represented by a one ounce coin. Gold is represented by a Krugerrand in most cases but can also be any one ounce gold coin. No gold, silver or precious metal is ever kept on the property.
These assets are securely stored off site at one of our third party vaults. Investors can buy small amounts of gold to hold, trade or sell, but they will not be able to withdraw it unless it is in one ounce units. If they wish to withdraw the gold, they would be paid out in Krugerrands.
These coins would either be delivered via a third party or collected from one of the retailer partners situated across South Africa.
AltCoinTrader will only accept deposits if the exchange is low on physcial assets and special arrangements would be made to accept gold and silver coins.
On such requests, a detailed template will be sent to clients explaining the steps that need to be taken. The coins would then be accepted by the retail partners. Only after the assets have been verified, will it be credited to the client’s AltCoinTrader account with either the gold or silver asset.
Crypto Magazine: Let’s talk about the issue of volatility which seems not to be going away anytime soon. Are digital currencies that useless to an extent of being undermined the way it is being done now?
Richard de Sousa: Cryptocurrencies may be volatile but that is indicative to the fact that it is a very new monetary system. While volatility might be at the forefront of everyone’s discussion it should not be forgotten that cryptocurrencies, specifically Bitcoin, is the best performing asset in 2019, as it has been for many years, giving its investors thousands of percent in returns.
There have been falls but mostly cryptocurrencies have outperformed any other asset. So whilechaters may say that the volatility might undermine it, we need to understand that is a currency that is here to stay. It is a real threat to the current financial system and it can simply not be ignored.
Crypto Magazine:What about Libra, the digital money Facebook is planning to launch in the near future?
Richard de Sousa: As far as Libra is concerned, it is my opinion that Libra will not launch in the next 18 months. They will probably miss their target because the American authority, in conjunction with Europe specifically France and Germany, have decided that they are not going to allow Libra to launch.
Libra is trying to open the biggest bank in the world. They are trying to have a monopoly on the financial system globally and the regulators are not just going to allow that.
The reason that this is different from Bitcoin is that Bitcoin cannot be stopped, because it is decentralised whereas Libra can be very easily stopped because it has a central office in a central place where it can be stopped.
Crypto Magazine: As Bitcoin’s explosive price rise appears to be a mix of fear, greed, increased adoption and price chasing, this might be the prime reason for some to find alternative ways to manage risk. This statement is loud and clear, but can you safely say that this is one of the strongest approaches of managing the crypto-volatility issue once and for all?
Richard de Sousa: We certainly do offer our clients a measure of curbing the volatility of their portfolio, by simply having gold and silver investment vehicles available all on one platform. It is
however not our intention to in any way curb the volatility of cryptocurrencies, firstly, because we could not do so even if we tried.
And secondly, because this is all part of the growth or the growing pains of cryptocurrencies. The volatility is not going to be curbed in the near future, nor should it be.
This is an investment vehicle or an alternative financial system that needs to first grow to maturity before the volatility issue should even be thought about and tackled. Right now it needs to grow and find its place in the current financial system.
So, volatility in my opinion is not an issue, it’s part of a growing process.