p2p gold / silver backed lending. Silverbullion in Singapore are now a major threat to goldmoney

I have been looking out for a company that offers p2p lending with gold / silver for a while now and I finally found one.
They go by the name silverbullion. You can find them here: https://www.silverbullion.com.sg/ .
- They offer a free market interest rate between lenders and borrowers.
- Borrowers must have 200% in collateral vault reserves to lend against. Therefore, a margin call can ensure that the lender gets their money back.
- Interest rates are running around 3-4% depending on the period of time.
- There is 1 month 6, 12, 24 month time periods.

I personally believe that this kind of financial tech is absolutely essential for gold / silver to retake its place a real money. Otherwise it will always be perceived as shiny metal that sits in a vault gathering dust! This brings gold / silver to life, connecting lenders and borrowers and allowing interest to be made without a bank as the middle man!

I would love to see goldmoney adopt implement the same system / do a merger / or otherwise allow my to transfer my gold in a direct vault - vault transfer (on an international gold network) to this company so that I can lend some of it out.

This is my #1 on the wishlist for goldmoney!
- My #1 concern is that for goldmoney to adopt this change, they would likely need to make a decision between sharia compliance or p2p lending. I for one will not stick around for long while they pander to sharia compliance (not allowed to charge interest - total failure to understand time preference value of money)

I'd be interested to hear other people's thoughts

Regards

Comments

  • GMONEY1GMONEY1 Posts: 394 Silver ✭✭✭✭
    @IndividualFreedom thanks for sharing. Loaning out bullion in exchange for a short-term interest payment would be great; I would use it if the transaction were guaranteed somehow.

    I think Goldmoney could technically create a separate business entity to do what silverbullion is doing with loans and still maintain Sharia compliance for their existing companies. I'm not a Sharia expert though.

    Or ... earnings from interest would have to be donated to charity. So at the business level they could have a non-profit/charity that they donate to; and at the consumer level, they could ask when setting up the loan "where would you like the interest payments to go" (your account or donate to charity of your choice).

    I think that still meets compliance; but I could be wrong.

    Also, this might be a technicality but these loans are P2P, so technically GM would be profiting from facilitating the transaction but not the actual interest payment itself (assuming there is a small fee for the transaction).

    I'd love to hear from others on this; very interesting. Thanks again.
  • IndividualFreedomIndividualFreedom Posts: 11 Tin ✭
    edited May 13
    @GMONEY1 - yeah, Goldmoney would be able to take a % cut for creating the framework of bringing lenders and borrowers together. They would also be doing all of the "heavy lifting" in terms of transferring ownership from one person to another and would need to extend all of their current software to accommodate keeping track of who is owed what and automated triggering of margin calls to mitigate any risk on the part of lenders.
    - I'm sure they could do it, just would need to be built on top of what is fairly recently engineered software, so I imagine would be a bit of a challenge initially and I don't know how much cash flow they have to allocate to even more R & D of this kind? Either way it is ESSENTIAL to ever properly challenge the banking cartels.
    - ? Maybe they are waiting for more of a bull run / higher transaction volumes and higher market cap for physical gold first to finance such developments?
    - Gold needs this kind of additional utility to bring it into the 21st century of financial technology and services. It is definitely doable and would be far superior to fiat once implemented and a few extra next milestones e.g. buying houses, cars and widespread retail adoption, governments accepting tax payment in weight of gold. (This is the dream anyway)

    PS: gold vaulting services should avoid creating divisive electronic transaction systems. Afterall, international banks don't have exclusive networks preventing cash transfers from one bank to another competing bank! Hence for any kind of serious future ambitions of gold AS MONEY, we need to have an interconnected system where competing vault providers allow direct vault to vault transfers to occur! The gold vault providers that act as free "hubs" that allow maximum connectivity to other providers will also be of most utility to their customers and for the gold ecosystem as a whole. Freedom works and will produce customer satisfaction over providers that try to "cage in" the holdings of their clients.
  • GMONEY1GMONEY1 Posts: 394 Silver ✭✭✭✭

    ...international banks don't have exclusive networks preventing cash transfers from one bank to another competing bank! Hence for any kind of serious future ambitions of gold AS MONEY, we need to have an interconnected system where competing vault providers allow direct vault to vault transfers to occur! The gold vault providers that act as free "hubs" that allow maximum connectivity to other providers will also be of most utility to their customers and for the gold ecosystem as a whole.

    @IndividualFreedom You are basically describing a cooperative, collaborative, consortium based business model in the industry ... opposed to the apparent status quo -- a competitive environment that "fights" for customers. I agree with this, and I've said it before. The industry needs to band together to make the overall pie (i.e. user base and adoption) much bigger instead of each company just trying to grab a bigger piece of the status quo pie. A much bigger pie that incorporates many of the P2P lending functionalities that you brought up in this discussion (and also the P2P gold payments at the core of Goldmoney Personal) would be a strong challenger to the existing banking system. But separately, it's like pea-shooters trying to take down T-rex.

    A consortium with Goldmoney, Sprott Money Ltd, APMEX/Citadel, and others who wanted to collaborate could be the way forward to de facto sound money reform.

    (Attached: upper right is considered optimal for win/win maximum productivity...in theory
    )

    Tagging @Roy Sebag and @Josh Crumb because this is a great thread for items to discuss with the board and strategic decision makers.
  • mr1mr1 Posts: 312 Bronze ✭✭✭
    @IndividualFreedom
    Looks like your wish will be granted. Goldmoney just barely sent out a press release about a partnership with the p2p lending company LBT in order to offer p2p lending backed by gold:
    http://community.goldmoney.com/discussion/4002/new-partnership-announced-with-lbt-p2p-lending-and-borrowing
    http://m.marketwired.com/press-release/-2217830.htm

    Very exciting!
  • mr1mr1 Posts: 312 Bronze ✭✭✭
    edited May 23
    @IndividualFreedom
    I think I was actually incorrect in my last post. I don't think that Goldmoney's partnership with LBT satisfies what you were requesting. I do think that it will be similar to p2p lending facilitated by SilverBullion.com, but I don't think that even they do what you are asking for.

    It sounds like you want to lend out your gold, in order to get a return on your gold. However, SilverBullion doesn't do that. What they do is allow borrowers to use their existing gold bullion as collateral to get a loan in a fiat currency from another user. So if you have gold bullion, you can use it as collateral to get a loan in dollars, but you are paying interest to the lender in dollars, not receiving interest.

    Gold's function in the transaction is not as the money being lent to the borrow, but as the collateral the borrower uses in order to borrow fiat currency, much like a house is used as collateral in a mortgage.

    I don't know if anyone really offers what you want. Although some are trying in some ways. Here is one example of a business deal where gold is borrowed, and the payments are made back in gold.

    "FREEDOMFEST LAS VEGAS, Nev., July 15, 2016—At FreedomFest, Monetary Metals announces that it has closed its first gold fixed-income deal, to finance the gold working inventory of Valaurum. The initial amount of gold meets Valaurum’s current needs, with room for expansion driven by its growth. The interest rate is 5 percent of the gold, paid in gold."
    https://monetary-metals.com/fixed-income/
  • BigMouseBigMouse Posts: 74 Copper ✭✭
    @IndividualFreedom great info! thanks for posting! I like P2P service offered by silver bullion! I am wondering when can GM offer it?
    @mr1 I would like to use Gold as collateral only. So I can borrow or lend using fiat money. This would be a great feature. So your gold can earn some interest (if you lend out) or help you get better rate (if you borrow).
  • BigMouseBigMouse Posts: 74 Copper ✭✭
    edited May 31
    I am no expert. Using block chain technology, it might be cost effective to manage all those contract. And GM has similar technology. I really hope GM is willing to do it!
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