The Digital Evolution Of The Gold Standard
Kinesis Money is a monetary platform built around physical gold and silver that enables individuals and businesses to buy, hold, transfer, spend, and receive precious metals through a digital payment system.
Instead of relying on fiat currencies, the platform uses two native tokens: KAU, which represents one gram of gold, and KAG, which represents one ounce of silver. According to Kinesis’ legal documentation, each token represents direct ownership of fully allocated physical metal held in insured, independently operated vaults across a number of major precious-metals trading hubs. The one-to-one backing of KAU and KAG is independently audited twice a year by Bureau Veritas, a global inspection, testing, and certification company.
The idea of using precious metals as money is hardly new. For most of recorded history, gold and silver served as widely accepted media of exchange. 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.”
Unlike gold-backed tokens such as Pax Gold and Tether Gold, which are primarily intended as investment products, KAU and KAG are designed to function as transactional money. Blockchain technology records ownership, settles transactions, and transfers the tokens between users, with the aim of combining the monetary properties of gold and silver with the convenience of modern digital payments.
Why People Are Looking Beyond Fiat Currencies: The Quest for Sound Money
In his 1966 essay Gold and Economic Freedom, long before becoming the 13th Chairman of the Federal Reserve, Alan Greenspan offered a striking explanation for the hostility toward the gold standard: “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.”
We can debate the real intentions of those whom Greenspan called welfare statists, while critics of the gold standard argue that modern economies require monetary flexibility and that strict asset backing can constrain policymakers during economic crises. What is hardly deniable, however, is the vulnerability of fiat currencies to devaluation—particularly when authorities resort to stimulus measures.
The effects are familiar: retirees living on fixed incomes find that their savings buy less each year; conservative savers are forced to take on more investment risk than they otherwise would simply to keep pace with inflation; and unsophisticated investors, as well as those without or with only limited access to financial instruments—according to an FDIC survey, 18% of U.S. households are currently either unbanked or underbanked—experience a steady erosion of their wealth, often without even realizing it.
It is understandable, then, that many have started looking for alternatives. They are seeking a medium of exchange that resists debasement through arbitrary creation. This was, for example, what originally made Bitcoin so attractive before it became a purely speculative asset.
Unfortunately, while fiat currencies steadily lost purchasing power, gold was portrayed as a relic of the past—a pet rock. Investment advisors and financial commentators broadly 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.”
Yet the shift went beyond how gold was viewed as an investment: its role as money was pushed into the background, both in the modern monetary system and in much of the financial commentary surrounding it, so much so that gold’s monetary irrelevance within a modern economy became a widely shared assumption. One can see this, for example, in something as ordinary as online investing forums, where gold is almost always discussed in the commodities section rather than the currency section, as though its monetary history were little more than a historical footnote. And who doesn’t remember Ben Bernanke’s famous answer during the 2011 House Financial Services Committee hearing, when, after being asked by Rep. Ron Paul why central banks continued to hold gold if it was not money, he replied with a single word: tradition.
I believe—due probably to what is known as the Cantillon effect (whereby new money benefits those closest to its creation before prices rise for everyone else)—that the decoupling of money from gold has benefited the financial establishment far more, if not exclusively, than the ordinary citizen.
I believe also that, in the face of the continuous money creation inherent to fiat monetary systems and the resulting currency devaluation, sophisticated investors enjoy substantial advantages over the average person. These include privileged access to superior information and to complex financial products that remain largely unknown and inaccessible to most — particularly to the unbanked and underbanked. Meanwhile, low-income households, who often live paycheck to paycheck, typically lack both the resources and the financial buffer needed to invest effectively.
Democratizing Access to precious metals
In some countries, a mature retail bullion market exists and feels perfectly normal. In many others, however, it is virtually absent, leaving ordinary individuals with few realistic options.
Even where dealers are available, the process is far more complicated than opening a savings account or buying an ETF. Investors face a range of decisions: coins versus bars, small denominations or larger bars, appropriate insurance, secure transportation, methods of verifying authenticity when buying and selling, and competitive buy and sell spreads… and perhaps the most pressing one: where to store their bullion safely.
The solution suggested by the well-known If you don’t hold it, you don’t own it principle, which some stackers treat as an unquestionable rule, often reflects the perspective of investors living in stable, affluent countries, where secure home storage is a realistic option. It overlooks, however, the circumstances of millions of people elsewhere, for whom security concerns, inadequate housing, political instability, or weak legal protections make storing precious metals at home neither practical nor desirable. It also overlooks that the principle is difficult to reconcile with institutional ownership: a pension fund may own allocated bullion, but no one would expect it to store that bullion itself.
Platforms like Kinesis remove many of these hurdles. You can own allocated gold and silver simply through a smartphone and internet connection. On the exchange, people trade against major currencies and crypto at prices close to wholesale, which keeps buy and sell spreads tight.
This setup is particularly useful for lower-income users. Instead of metals sitting unused until sold, Kinesis lets people access their value when needed. The system is highly divisible—you can work with amounts as small as 0.00001 grams of gold or 0.00001 ounces of silver—so modest sums are enough to start.
To me, this approach mirrors how mobile banking opened up finance in emerging markets. Just as M-Pesa let millions in East Africa store and send money via basic phones without ever visiting a bank branch, Kinesis makes it possible to hold and use physical precious metals without dealing with vaults or dealers. That kind of access to sound money could be just as significant as the spread of mobile banking.
Gold Standard 2.0: Sound Money for the Digital Age
Kinesis goes further than simply making bullion easier to own. Users can transfer value 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 also accept payments in precious metals through Kinesis Pay. In all these cases, the aim is to return gold and silver to their traditional role as actual money, not just investment assets.
History shows that new payment methods often face skepticism at first. When credit cards arrived, plenty of people doubted anyone would trust plastic over cash. Similar doubts greeted online banking—many said they would never handle their money over the internet and preferred walking into their local branch. Today both feel ordinary.
In that sense, Kinesis could be thought of as Gold Standard 2.0. It’s not about going back to the 1800s, but about pairing gold’s traditional discipline with the speed and convenience of digital tools. Recent laws in states like Texas, Utah, and Florida have started laying the groundwork for electronic gold and silver payment systems, showing the idea is gaining real traction.
An important distinction separates Gold Standard 2.0 from the first one though: participation is voluntary. People choose whether to hold and transact in precious metals rather than having a single monetary system imposed upon them. It aligns with one of Hayek’s fundamental convictions in Towards a Free Market Monetary System: “I am more convinced than ever that if we ever again are going to have a decent money, it will not come from government: it will be issued by private enterprise, because providing the public with good money which it can trust and use can not only be an extremely profitable business; it imposes on the issuer a discipline to which the government has never been and cannot be subject.”
To me, this voluntary aspect and the resulting competition are among the strongest parts of the model. It gives people real choice. Those who want to preserve purchasing power through metals can opt in, while others continue using fiat currencies without restriction.
Why the Allocated Bullion Exchange Matters
Kinesis builds on the Allocated Bullion Exchange, or ABX—an institutional platform for physical precious metals trading and storage that started in 2011 and fully launched in 2016.
For everyday users, what matters most is ABX’s established network of professional vaults and logistics partners like Malca-Amit, Armaguard, and Loomis International. These relationships provide access to insured, globally distributed storage infrastructure. The system handles ownership records, reconciliations, and independent audits. That’s why audits of the metal backing KAU and KAG, carried out by Bureau Veritas, can be done regularly and efficiently—everything sits within an established professional custody setup.
Can Gold and Silver Become Money Again in a Digital Economy?
When one considers the early history of the United States, it is striking how deeply some of the most influential Founding Fathers distrusted unbacked paper currency and warned of its consequences: Thomas Jefferson, for example, warned, “Paper is poverty, it is only the ghost of money, and not money itself”; George Washington expressed concern about states “falling into very foolish and wicked plans of emitting paper money”; James Madison described paper money as unjust and unconstitutional, noting that it “affects the rights of property as much as taking away equal value in land.” There is an obvious historical irony here: the very men who warned against paper currency now adorn the paper money whose expansion they would have decried.
Critics of the Gold Standard 2.0 idea maintain that gold-backed systems cannot compete with established fiat networks, particularly given the widespread acceptance of national currencies and the dominance of the US dollar in cross-border transactions.
Within the precious metals community, there is broad agreement in favour of returning to some version of a gold standard—essentially, anchoring money once again to gold rather than relying on fiat currencies. Yet this preference is often accompanied by a deep-seated distrust of anything digital, a caution shaped in large part by the Bitcoin phenomenon. One frequently encounters a nostalgic vision that seeks to revive payment systems from a century ago, when the original gold standard was in place, and apply them directly to today’s far more complex economy.
Within cryptocurrency circles, the opposite attitude often prevails. There, the physical nature of gold is sometimes seen as a limitation, suggesting its monetary role belongs to history.
So, there we have it, the million-dollar question: can gold and silver resume their monetary role in an economy built on digital payments?
If sound money interests you, if you’re looking to diversify your savings, if you already invest in precious metals, or if you run a business open to accepting gold and silver as payment, I hope this website proves useful.
Should you choose to open a Kinesis account, you will have access to several integrated tools like the Kinesis Exchange for trading precious metals against major fiat and cryptocurrencies; the Kinesis Card (still in beta testing) for everyday spending; Metalback, a cashback program for online purchases that rewards users in precious metals instead of cash; Kinesis Pay for merchants who accept or wish to receive payments in allocated, audited bullion; and the Kinesis Yield System, which provides rewards based on platform participation.
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