Jai Bifulco, Chief Commercial Officer at Kinesis Money shares insights on the role that gold can play in the modern economy.
Chief Commercial Officer at Kinesis Money Mr. Bifulco is stressing the importance of precious metals in today’s economic environment, and he strongly believes that precious metals in conjunction with modern technology should be brought to today’s government and investors.
Great to have you with us today, Mr. Bifulco! Let’s talk about your investment philosophy. What draws you to precious metals in particular?
Precious metals represent an aim for diversification, and they are playing a vital role in today’s global economy, precious metals represent an opportunity for governments and investors via stablecoins.
Gold has been always perceived as a stable asset for trade exchange and across global transactions and, despite social and economic changes, has always held value over time.
The interaction between modern technology and metals is also really interesting. Technology like the blockchain has brought precious metals to everyday investors – it’s breathed a new lease of life into metals like gold.
What do you see as the biggest challenge for consumers in the current economy, and how do you feel tangible investments like precious metals can help meet that challenge?
Inflation continues to surge globally due to an unprecedented rise in energy prices, the BCE and the ECB continue aggressively raising interest rates, even as the region’s economy pushes closer to a recession. The likelihood of a global financial crisis grows by the day. It’s been a tumultuous year for investors and consumers, and markets have been affected.
The stock market is in decline, and inflation as well interest rates are further exacerbating the pain. One of the key focuses at present should be diversification, and finding alternative ways to cope with volatility and seek stability is crucial in today’s global economy.
Do you think gold is going through an ‘identity crisis’ right now? Do you think that gold has ended its status as an inflation hedge in this day and age?
In today’s economic climate, gold is going through an evolution. Precious metals are rapidly becoming a well-established trade tool, which, blended with blockchain and digital innovations, provides endless opportunities for integration as a stable currency and can bring stability across countries.
Zimbabwe’s Central Bank launched gold coins in July as part of efforts to help curb rising inflation amid a fall in the country’s currency. The move sparked interest in whether gold can serve as a safe investment during a market crisis. What do you think of this?
Gold is also playing a vital role in stabilising the currencies in developing regions, hence the introduction of the precious metal in Zimbabwe as part of the central bank’s measures to tackle the country’s currency crisis through exchange rate stabilisation. Gold coins entered Zimbabwe’s market in July this year at 1,823.83 U.S. dollars a piece. Individuals and domestic corporations including institutional investors are allowed to buy gold coins in both local and foreign currency.
This is great at a government level, but it’s not perfect for everyday use, you can’t chip pieces off a gold coin to make payments for a smaller purchase – a coffee, for example – so it needs to be digitalised. In addition, if all your wealth is in one gold coin, what happens if you lose it – or it’s stolen? Gold needs to be integrated with technology to be useful, safe and secure for everyday use.
In the context of higher gold prices, what role does the streaming model have in comparison to traditional forms of financing such as equity?
At present people are looking at ETFs, trading markets, NFTs, etc. but people need to look at physical assets too. Institutions and central banks are stockpiling physically, with more physical delivery in the last month than in the last 30 years. ETFs have their place, however, they are vulnerable to manipulation. Physical gold that’s digitalised can offer all advantages of gold ETFs – liquidity, low costs and convenience – combined with the unparalleled protection of fully insured physical bullion ownership. As interest rates rise gold will hold its place as an inflation hedge. Institutions are ahead of this game.
No longer is gold just an investment. Through blockchain technology, it now has utility as a currency for everyday transactions. How will this shape the way people interact with gold in the digital space?
Precious metals, especially gold, in conjunction with blockchain technology have a relevant role in today’s economy. Digital gold allows people to send, spend, store and trade gold without the cost of vaulting fees. Gold has gone from being expensive, hard to store and illiquid to easy to use in everyday transactions. In addition, with the Kinesis Virtual Card, users can spend their gold, with instant fiat conversion, at any merchant globally that accepts Mastercard. Where gold has always been attractive as an inflation hedge, it can now act as an alternative to faltering, inflation-hit fiat currencies.
As gold is not debt-based, it provides a Shariah-compliant alternative for many countries in the Middle East. What do you think this accessibility to precious metals will prove moving forward?
This will help address muted consumer appetite for gold in the Middle East, where demand has actually fallen in recent years. Islamic financial assets are seen at about $2 trillion, a one percent allocation to gold would boost demand by $20 billion, or about 500 tonnes.
In your expert opinion, what is the future of gold?
Gold as an asset is on the rise and will keep evolving. The benefits of Gold are endless: it protects the downside risk in times of trouble and given its long history as a trading commodity, you’ll easily find a well-regulated market for investing and trading in gold. It is an easy-to-trade asset, always in demand and there’s no need to worry about liquidating your assets, as trading gold as a commodity is a simple process. Metals don’t deteriorate over time, are low maintenance, and are easy to pass to the next generation. As history proves that gold protects your wealth from big downturns and black swan events, it should be part of your investment portfolio, and we consider it the ultimate insurance in a financial portfolio.
This article was originally published on 8 November, 2022.
Jai Bifulco has a track record of driving business growth in director, executive, partner, advisor, and global leadership roles at both established international and early-stage companies. His diverse commercial and operational experience spans the FinTech, precious metals, mining, financial services, investment, and trading spaces.
As a founding member of Kinesis, Jai brings his wealth of experience to drive the adoption of a truly ethical, global monetary system, which he believes will shape the future of precious metals and the monetary space.