Kinesis Gold
A Guide to the Kinesis Monetary System
The Kinesis Monetary System is a platform that enables individuals and businesses to buy, hold, transfer, spend, and receive physical gold and silver through a digital payment infrastructure. Rather than relying on fiat currencies, the system operates on two native tokens: KAU, representing one gram of fully allocated physical gold, and KAG, representing one ounce of fully allocated physical silver. Each token confers direct ownership of metal stored in insured, independently operated vaults, with the one-to-one backing verified twice annually by Bureau Veritas through independent inspection.
Kinesis’ goal is to restore physical gold and silver to their former monetary role — this time embedded within the architecture of digital payments.
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Why People Are Looking Beyond Fiat Currencies
In his 1966 essay Gold and Economic Freedom, long before becoming the 13th Chairman of the Federal Reserve, Alan Greenspan offered a striking explanation of why he believed the gold standard had come under sustained attack: “In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. … The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves. This is the shabby secret of the welfare statists’ tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists’ antagonism toward the gold standard.” Whatever one’s view of the gold standard, the broader concern A. Greenspan identified remains relevant: fiat currencies are not fixed stores of value. Over time, persistent inflation reduces their purchasing power.
Unfortunately, while fiat currencies steadily lost purchasing power, gold was increasingly pushed to the margins of finance and monetary discourse. In A Tract on Monetary Reform (1923), J. M. Keynes had already characterised the gold standard as a barbarous relic. In a July 2015 column for The Wall Street Journal, financial journalist Jason Zweig called gold a pet rock, an expression that became a shorthand for the broader critical view of gold as an investment. Investment advisors and financial analysts largely shared Warren Buffett’s dismissive view that gold was just an unproductive asset sitting idle in a vault: “[Gold] gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again, and pay people to stand around guarding it. It has no utility.”
But the change was about more than gold’s status as an investment. Its much older role as money was also pushed into the background. In modern monetary systems, and in much of the financial commentary surrounding them, gold gradually came to be treated as though its monetary history were largely irrelevant to the present. This assumption can be seen in something as ordinary as online investing forums, where gold is usually discussed under commodities rather than currencies, as though its centuries-long monetary role were merely a historical curiosity. It was also captured memorably during Ben Bernanke’s testimony before the House Financial Services Committee in 2011. When Rep. Ron Paul asked why central banks continued to hold gold if it was not money, Bernanke answered with a single word: tradition.
Democratizing Access to Allocated Physical Gold & Silver
In some countries, a mature retail bullion market makes buying physical precious metals relatively straightforward. In many others, however, such a market is either underdeveloped or virtually nonexistent, leaving ordinary people with few practical ways to acquire and hold bullion. Even where reputable dealers are readily available, investors must decide between coins and bars, determine which denominations make economic sense, consider insurance and secure transportation, verify authenticity, compare dealer spreads, and, perhaps most importantly, decide where the metal should be stored.
Platforms like Kinesis seek to eliminate many of these obstacles: allocated gold and silver can be purchased with nothing more than a smartphone and an internet connection, while the exchange enables trading against major currencies and cryptocurrencies at wholesale prices.
The model bears some resemblance to the way mobile banking transformed access to financial services in emerging markets. M-Pesa, for example, enabled millions of people in East Africa to store and transfer money using basic mobile phones without requiring a conventional bank branch. Kinesis applies a related idea to precious metals: instead of requiring individuals to locate a bullion dealer, purchase a suitable denomination, arrange insurance, and find a secure place to store the metal, it provides a digital interface through which allocated physical gold and silver can be held and used.
Gold Standard 2.0
Kinesis aims to go beyond simply making bullion easier to own: users can transfer Kinesis’ currencies instantly between wallets; the Kinesis Card works like a regular payment card, converting gold and silver holdings into local currency in real time at checkout; merchants can accept payments in precious metals through Kinesis Pay. In each case, the aim is to give gold and silver a practical monetary function again, rather than leaving them confined to the role of investment assets sitting in a vault.
In 1830, the British economist Nassau William Senior observed that “the portableness of the precious metals and the universality of the demand for them render the whole commercial world one country, in which bullion is the money.” While gold-backed tokens such as Pax Gold and Tether Gold are primarily designed as investment products, Kinesis takes a different approach: KAU and KAG are intended to function as digital currencies, bringing precious metals back into a role they occupied for much of human history.
Platforms like Kinesis can be understood as a kind of Gold Standard 2.0. The concept is not to recreate the monetary system of the nineteenth century, but to combine one of the oldest forms of sound money with the technological infrastructure of the digital economy: gold provides the underlying monetary asset; digital technology provides the speed, divisibility, portability, and convenience that physical bullion has traditionally lacked.
Gold Standard 2.0 then—but with a caveat: participation is voluntary. Individuals and businesses can decide whether they want to hold or transact in precious metals, they are not required to abandon national currencies, nor are they forced into a single monetary arrangement imposed from above. This voluntary character—and the currency competition that follows from it—is, in my view, one of the most compelling aspects of the model: rather than asking governments to design a perfect monetary system, it gives individuals and businesses the ability to choose among different forms of money. In that sense, it introduces something that might reasonably be called free monetary choice.
Why the Allocated Bullion Exchange Matters
The infrastructure behind Kinesis is built around the Allocated Bullion Exchange, or ABX, an institutional platform for the trading and storage of physical precious metals. This is an important but easily overlooked part of the model: digital ownership of physical bullion only works if there is a reliable system behind the screen. Someone has to store the metal, maintain accurate ownership records, reconcile transactions, move bullion when necessary, and ensure through regular audits of the metal inventories that the quantity recorded in the system corresponds to the physical assets held in custody. The custody infrastructure of ABX addresses those requirements.
Can Gold and Silver Act As Money in a Digital Economy?
Critics of renewing gold’s monetary role argue that even a technologically sophisticated gold-backed payment system would struggle to compete with fiat currencies, given how they are embedded in taxation, employment contracts, banking systems, accounting standards, government obligations, and virtually every aspect of commercial life. It is one thing to create a digital representation of gold; it is another to persuade consumers, employers, merchants, financial institutions, and governments to use it as money at any meaningful scale.
Precious-metals investors broadly favor a return to some form of gold standard, or at least a more central monetary role for gold. Yet that enthusiasm rapidly dissipates when it comes to gold- and silver-backed digital currencies, reflecting a deep-seated distrust of the digital realm, shaped in large part by Bitcoin and the broader cryptocurrency phenomenon. Within these online circles one repeatedly encounters a nostalgic vision of monetary reform: restore gold and silver to the position they held a century ago, then simply transplant the payment systems of that era into the present, overlooking that a payment infrastructure designed for an era of banknotes, cheques, and paper-based accounting records cannot simply be transplanted into today’s digital economy.
Cryptocurrency enthusiasts often approach the issue from the opposite direction. From that perspective, the physical nature of gold is precisely the problem. Gold has to be mined, transported, vaulted, audited, and ultimately represented somehow in a digital economy. Bitcoin and other digital assets appear, at least conceptually, to avoid many of those constraints.
All of which leads us to the central question: can gold and silver still function as money in economies underpinned by digital payments?