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What Is The Allocated Bullion Exchange?

Allocated Bullion Exchange (ABX) has operated an electronic marketplace for fully allocated physical precious metals since 2011. Allocated means that investors hold direct legal title to specific vaulted bullion rather than a claim on a general pool or a promise of future delivery. The metal is stored off the balance sheets of both the exchange and the vault provider.

ABX clients include precious metal producers, refiners, broker-dealers, asset managers and jewellers. The platform links traders across seven global locations through MetalDesk, a single system that handles trading, price discovery and clearing. This replaces older methods that relied mainly on phone calls and emails with electronic execution.

Operational Principles

• Integrated and Allocated Bullion Focus: ABX deals only in fully allocated bullion. It does not use unallocated pools or shared claims. This approach is intended to reduce counterparty risk and give each participant direct ownership of specific metal.
• Global Marketplace: The platform operates as one market across seven major locations. Participants can trade in one place, store metal in another, and arrange delivery according to their needs.
• Shift to Electronic Trading: Traditional bullion dealing still often involves phone calls and email chains. ABX uses electronic execution instead, which is designed to increase speed, transparency and access for traders and investors.
• Innovative Trading Platform: MetalDesk serves as the central online system. It combines trading, price discovery and clearing in one place rather than relying on separate tools.
• Centrally Cleared System: ABX operates a clearing arrangement built for allocated metals. Trades are tracked and the process is designed to be visible to participants.
• Direct Access to Liquidity: Pricing is drawn from major global pools in real time. The aim is to give wholesale participants, whether large or smaller, more direct access to liquidity.

ABX’s Stated Goals

• Modernisation: The electronic platform is intended to improve efficiency and security while allowing anonymity where appropriate. Transparency is used as a way to support trust, and the system is designed to lower certain costs compared with older methods of dealing.
• Globalisation: The interconnected hubs allow ownership to be transferred electronically across borders. This can reduce price differences between locations and make arbitrage more practical by removing some of the previous geographic barriers.
• Integration: ABX seeks to bring different stages of the chain — from production through to the final buyer — onto a single platform. The goal is to reduce fragmentation so that participants can see a more consistent global picture and take part in real-time price discovery that reflects supply and demand.

Storage and Logistics

Global Storage Options: ABX offers storage through a network of secure vaults in several locations around the world. Clients can choose to keep metal near their main operations or in another region if that is more practical, which can help reduce transport costs and delays. The company works with established logistics and custody providers, including Armaguard and Loomis International, for the physical movement and safekeeping of bullion.

Bullion Deposits and Deliveries: Deposits are accepted only when certain conditions are met. Bullion must arrive either a) directly from an approved refiner on ABX’s list, together with the refiner’s certificate, or b) as a transfer between ABX vaults, accompanied by a refiner or assayer certificate, or c) through an ABX-approved assayer, with a matching assayer certificate. These requirements are intended to ensure that only properly documented metal enters the system.

Inspections and Audits: Independent checks are carried out by specialised firms. Inspectorate (part of Bureau Veritas) conducts commodity inspections, while BDO handles financial auditing and assurance. The purpose of this external verification is to support accountability for the holdings and processes across the network.

Allocated Bullion Exchange vs. Kinesis Exchange

The Allocated Bullion Exchange and the Kinesis Exchange: aren’t they the same?

No. If it were so simple it wouldn’t be Kinesis. The Allocated Bullion Exchange (ABX) and the Kinesis Exchange perform different roles within the Kinesis Monetary System.

ABX is the institutional wholesale marketplace where physical gold and silver are bought, sold, and stored. It connects refiners, bullion dealers, brokers, wealth managers, institutional investors and other professional participants in the precious metals industry. ABX is responsible for the physical bullion infrastructure that supports the Kinesis system, including the acquisition, allocation and custody of the gold and silver that back KAU and KAG. It also supplies the wholesale liquidity from which those digital currencies are created. 

The Kinesis Exchange, on the other hand, is the digital asset trading platform that sits inside the Kinesis Money interface. It is the venue where users buy, sell and exchange KAU, KAG, cryptocurrencies and fiat currencies. Users do not deal with physical bullion directly on this platform; instead they trade digital representations and other financial assets. For most people it is the main interface for day-to-day transactions and portfolio activity.