Monday, November 20, 2017

New Gold Backed Payment App from Glint Launches - Q&A Interview with CEO Jason Cozens

Today Glint launched their new product that I think readers here will find very interesting. It is a honor to be able to present a detailed Q&A style interview with the CEO of Glint, Jason Cozens.


He kindly agreed to do a Q&A interview with us to help provide some basic information on this potentially game changing financial product. Below are his answers to some questions we sent by email on how Glint will work. I strongly encourage readers to both read the interview and pass this news along to others who may have interest in this topic. This is an exclusive interview done for readers here.



Jason Cozens - Glint CEO

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Q: What is Glint and when should we expect to see it launch?

Glint (www.glintpay.com) is a new payments service that is reintroducing gold as money. For the first time ever we’re making gold a global currency that can be used in today’s electronic payments world.

Glint lets you spend, exchange, store and send local and foreign currencies, including physical gold - the most universally trusted form of money. You can pay with your Glint Mastercard, through the global banking payment system and via P2P (email).

We just launched today after being in stealth for a few years.

Q: What prompted you to get involved with Glint? 


First of all, I just became very interested in gold. Like many, the global financial crisis had woken me up to the fact that today’s fiat money is inherently unfair since it doesn’t maintain its purchasing power due to central bank policies. I also realised that a bank account is not the secure deposit of money that I once thought it was. Instead it is lent out, intentionally put at risk. We used to get an interest rate in return for that risk, but not so much these days. When your money can’t buy you what it used to and when banks go bust, even in the UK, it makes you think twice about what you use as money and where your money is stored.

So, I learnt that gold holds its purchasing power over time and – if it’s kept in an independent vault – it’s free from the contagion of a financial crisis. 

The problem with it until now has been that it is stuck in a vault and can’t buy you a coffee. I’d spent the previous 15 years leveraging emerging digital technology to help us do things differently, more efficiently or faster, so this problem was like a red rag to a bull. I set out to find out how to reintroduce it as money in today’s electronic payments world and then make it so. I then teamed up with Ben Davies who had a similar mindset and who had co-founded Hinde Capital (www.hindecapital.com), arguably the world’s first gold hedge fund. Glint is now the combined effort of a team of 30 talented people. 


Q: Do you see a strong consumer demand for a gold backed digital currency that can be both held as a store of wealth and also used in regular commerce?  


First of all Glint gives you real actual gold, it’s not a digital currency that is ‘backed’ by gold. Glint allows you to spend and receive physical gold itself as money. There is no credit, no need to sell your gold in advance into fiat. But in relation to using gold as money: I talk to people from different walks of life, young and old, and many of them have the belief that our hard-earned money should be sacrosanct and incorruptible. Why should the money that we have worked so hard to earn, whether you are an artist or an engineer, be subject to corruption by the policies of central banks? Why should its purchasing power be diluted over time? The emergence of, and interest in, cryptocurrencies is a clear demonstration of this world view. However, unlike gold, cryptocurrencies are not universally trusted. Gold is accepted globally, anytime and anywhere. Glint’s ability to use gold as money in electronic payments is an unprecedented event and gives us all the tantalising opportunity of a bottom-up return to sound money. 


Q: Followup: Where do you see that kind of demand coming from?


At first I thought that the product market fit was closest with the wealthy. They have the most to lose. But then we realised that this was not about wealth tiers. This is about a world view, a philosophy. No one wants to have their money corrupted, to lose its purchasing power or lose it in a financial crisis or an overstretched bank. Whether it’s your savings or ‘ready money’, owned by someone who had built a successful business or by a farmer in a developing country. The people who have pre-registered for Glint come from across the demographic landscape. There are of course some cultures where there is already a strong proclivity for gold, such as Germany, Italy, the Middle East, India and China. These are counties where the vast majority of people have never really trusted their banks or domestic money.


Q: Will the gold backing Glint be allocated physical gold?  If so, where will the gold be vaulted?


Yes, all the gold that Glint clients buy or receive is physical gold that is legally allocated to them. It is insured and stored in one of the world’s most secure and independent vaults run by Brink’s. So if the banks or currencies have a wobble, your gold is safe and secure.

Q: How easy will it be for merchants to accept Glint from customers?


Someone told me that we should take a leaf out of the Japanese Bitcoin community because they had managed to get 200,000 merchants signed up to accept Bitcoin. This kind of limited scale was never good enough for us. We wanted your gold and other currencies in your Glint account to be accepted anywhere and anytime, just like any other form of money within electronic payments. So, we have invested a lot of time and money to fully integrate it with the world’s financial system. Glint is accepted anywhere that Mastercard is accepted and can also be used in payments to traditional bank accounts around the world. Merchants don’t know what currency you are paying with, whether it is gold or another currency in your account, they get their currency of invoice. 

Q: How will Glint work for a consumer who wants to use it to pay for retail purchases?

You hand over your Glint Mastercard, the merchant swipes it and your default currency, whether you have set it to gold or one of your domestic currencies, is debited for the equivalent value using the real exchange rate at the point of purchase. You can easily change your default currency by swiping the wallet on the dashboard of your Glint app which you can download from Apple’s App Store. Of course you will have to have enough money in that currency in order for it to be approved.

Q: What advantages will Glint provide over using regular fiat currency or cryptocurrencies such as Bitcoin?

Unlike fiat money held with banks, Glint does not lend your gold out and it is legally allocated to our clients so it is not on our balance sheet, or the vault’s.

Gold is proven to retain its purchasing power over time unlike the US dollar which has lost 98% of its value since the Federal Reserve Bank was set-up in 1913.


Unlike cryptocurrencies, gold has stood the test of time. Your gold at Glint cannot be corrupted, lost or disappear. Gold is a constant from the moment it is created when neutron stars collide, it will be here long after the last computer dies or humans leave the planet. 

Q: What advantages will Glint provide over using other gold backed currency products such as Goldmoney (see added note below on Goldmoney)? 

Glint has enabled gold to be used as money in real-time. As soon as you get your Glint card and app you can spend it straight away if you wish. You don’t have to first sell your gold for cash and then spend it.

Q: Will Glint be usable globally or just in certain parts of the world?

You will be able to use your Glint account and Mastercard to make payments anywhere in the world. However, in order to ensure quality control we will stagger the role out, starting off with those registered in the UK, then Europe, then other parts of the world. It’s on a first come first serve basis so I’d encourage people from all over the world to download the app and register. We’ve started out with an Apple iPhone app and we’ll have an Android version out soon.

Q: What kind of investor backing does Glint have? 

We are very fortunate to have some fantastic investors who have given us a huge vote of confidence with their investment and with the advice they give us. We have a number of individual investors as well as Bray Capital, NEC Capital Solutions and the Tokyo Commodities Exchange (TOCOM). Bray Capital is an early stage VC, NEC Capital Solutions is the affiliated company of NEC Corporation, a leader in the integration of IT and network technologies. TOCOM is Japan’s largest and one of Asia’s most prominent commodity exchanges.

Q: Do you think Glint can attract support from institutions like banks and pension funds or even sovereign wealth funds?

Glint already has the support of these types of institutions. We spent months preparing for and then receiving regulatory approval from the UK’s Financial Conduct Authority and from the corresponding bodies across Europe. We also worked hard with the UK banking community to ensure money in client wallets is stored in segregated and safeguarded accounts at a UK Tier 1 bank. Apart from the reliability and independence that Glint’s global gold currency brings to our clients, we also believe in providing choice and control to our clients. Therefore, whilst essentially independent of the financial system we are still totally integrated with it. That’s why we have worked with the incumbent institutions, regulators and banks to bring a comprehensive solution.

Q: Is Glint regulated and by whom?

Glint is regulated by the UK’s Financial Conduct Authority as an e-money institution and has regulatory approval across Europe.

Q: Do you think Glint will attract new demand for physical gold or just divert demand from people already purchasing gold? 

TOCOM invested in Glint because they realise that Glint will grow the size of the gold market, not just take market share. People normally restrict how much gold they have because it has traditionally been stuck in a vault. Glint allows people to put more of their wealth into gold than they would normally. They can put their ‘ready money’ into it too and still have instant access to it, since they can use it as money at a moment’s notice.

Q: Will Glint have a silver backed product or just gold?

We believe that gold is the transcendent money. We don’t want to confuse the Glint proposition with other forms of money at the moment.

Q: Is there anything else you would like for readers to know about Glint?

I’d encourage everybody to download our app at the Apple App store (http://bit.ly/glintpayapp). They can also find more information, view video’s, access Frequently Asked Questions (FAQ’s) and read our online Perspectives magazine at our website (www.glintpay.com)


                                                               
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Added notes: 


Just for reader information, I have no affiliation of any kind with Glint or any financial investment in it. I am providing this information as a service to readers because I believe this is truly significant news about a new financial product with the potential to both impact the global gold market and the global financial payments system. I greatly appreciate Mr. Cozens taking time from what must be a very busy schedule to do this interview and provide such detailed insight into how Glint is designed to work. We will continue to follow Glint with interest over the coming months and wish them good luck with this new venture! 

Addendum 12-6-17: Today I received an email from a marketing representative for Goldmoney asking that I point out that Goldmoney is another alternative in this space available to anyone that may be interested. I have offered Goldmoney the opportunity to send an article explaining its advantages if they would like to do that. If I get something back from Goldmoney, I am happy to publish that here on the blog as a service to readers as well.
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Glint is getting good global news coverage of their launch. Here are some article links:

CNBC - Gold becomes shoppers new digtial way to pay

Express UK - Glint Challenges Bitcoin

TechCrunch - Glint DeCloaks

City AM - Glint launches MaserCard App

Quartz - Startup thinks now is time to pay with gold

The Times (UK) - Gold Startup

Bank Innovation - Glint lets Users pay for goods in gold

Financial Times - Gold App brings gold into the digital age


6 comments:

  1. Do they charge a storage fee, purchase/sell fees? If so, how much?
    Do they charge a transaction fee? If so, how much and is it paid by the Glint owner or the merchant?

    ReplyDelete
  2. See this link (also posted at the end of the interview above) for a schedule of account limits and fees:

    https://glintpay.com/help/glint-fees-limits/

    ReplyDelete
  3. Goldmoney has had this system in place for over a year or so now. The problem as I see it is the tax implications. Short term capital gains will cost you 33% and LTCG 25 because of the collectables status by the IRS. The nightmare at year end to determine gains and losses on purchases if not automated would be staggering.

    ReplyDelete
    Replies
    1. Thank you for those comments. You raise a good point on taxes. By no means am I going to give tax advice. In doing research on BullionCoin earlier this year one of my blog readers emailed me that it may be that small amounts (under $600) might not have to be kept up with. But I am not sure on that at all. I note that Glint states in the FAQ section that people should understand they need to look at the tax rules where they live for guidance. Also, they say that users will be able to get a statement of gains and losses on all transactions from their app if they should need that information. Bitcoin must deal with this same issue and I am not sure many Bitcoin owners realize that is the case.

      I will add that one thing Glint does is automate the process of liquidating your gold on their app for you if you decide to use gold for payments which is a bit different from Goldmoney as I understand the process. You don't have to convert your gold to fiat currency first, you just hand the merchant your MasterCard and pay as I understand it. But that transaction very likely does generate a gain or loss that the user may need for tax reporting (depending on whether amounts under $600 have to be reported).

      Thank you again for raising that point and for your thoughts.

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  4. Are there purchase taxes (such as VAT) at the point of purchasing the gold? Are there storage costs associated with the gold? Is there a CGT implication for spending gold which has risen in value since purchase?

    If the answer to either of the first two questions is yes then the value of your gold is being eroded. Of course there's also the issue of the fluctuating cost of gold itself.

    Just wondering how they are approaching these issues.

    ReplyDelete
    Replies
    1. Thank you for those questions. The FAQ section of the Glint web site (link is posted above) does address these questions. I will just paste in below what it says on their site:

      Do I have to pay VAT (tax sales) on my gold?
      No, sales tax is not due on gold.


      Do I have any tax liabilities?

      Glint cannot offer tax advice specific to your circumstances. The following is general.

      Glint Pay Services Ltd operates out of the UK where no taxes apply on the purchase of physical gold for storage in accredited LBMA vaults.

      If you spend or sell your physical gold at a profit it is likely that you’d be liable to a form of capital gains tax. This will depend on your tax rules where your tax jurisdiction resides. Glint provides a statement in app of all your physical gold transactions showing if you have a loss or gain over time periods you can set
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      According to the schedule of fees listed on the Glint web site, there is no fee for gold storage or for insurance.

      Fee type Fee
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      Gold Storage & Insurance Fees Free

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