Glint allows users to spend gold on cash
Meet Glint, a UK fintech with an app and debit card that lets users save, trade and spend in physical gold and multiple currencies.
The company was founded in 2015 by Jason Cozens.
“Glint is neither a bank nor a cryptocurrency, but takes a different approach to the issues of diminishing purchasing power of money and systemic risk,” Cozens said.
Glint has raised £28.5m ($37.5m) in funding over six rounds. The main investors are Sprott Asset Management, Venture Labo Investment, Tokyo Commodity Exchange and Bray Capital.
So why gold?
Humans have always intuitively placed a high value on gold, but the high costs of refining, inspecting, storing and insuring gold have kept most small investors from owning physical gold.
This fact, combined with the move away from centralized distributed ledgers, has created the space for consumers to consider that maybe it’s time to “shine it up”.
Inflation driving thrust
But the main reason is inflation.
“In my lifetime, the US dollar and the British pound have lost about 85% of their purchasing power. On the other hand, while we recognize that the value of gold can fall, which means that the purchasing power of the customer can also fall, we can see that the purchasing power of gold has increased by more than 500% over the same period,” Cozens said. .
The price of gold is rising to offset inflationary consequences and maintain stable purchasing power in times of global uncertainty, so many investors are turning to gold as an alternative to paper money.
In modern financial history, there have been waves of peaks and crashes, which speaks to the increasingly volatile nature of the financial market, which more and more investors fear.
Most notably, the housing bubble in the United States (2008) and the associated burst of the Eurozone sovereign debt crisis (2010), the global economy is still not fully recovered.
To add to the mix, the geopolitical uncertainties of BREXIT, the Ukraine crisis, sharp energy increases and the economic effects of COVID-19 have added to the skepticism.
The Bank of England reports that the inflation rate in the UK has risen to 5.5% in the 12 months to January 2022, with forecasts that it will climb to a peak of 8% this spring. in 30 years.
For Glint, this again confirms his need to exist. During this same period of rising inflation, they saw a 30% increase in gold purchases from their existing customers and reached a new milestone of 100,000 registered users last week.
According to the World Gold Council (WGC), global gold investment demand has increased by 15% per year since 2001. In 2020, global investment demand grew by 40% to reach an annual high of 1 773.8 tons.
So, does gold count?
“We now have the opportunity, the ability and the finances to create a gold-based echo system connected but outside of the banking system,” adds Cozens.
The need for a viable alternative remains, especially since, according to a recent Ernest & Young 2021 report, 37% of consumers now name fintech as their most trusted financial services brand, compared to 33% who name banks as the most reliable and 12% who say wealth management companies.
COVID-19 appears to have accelerated the erosion of trust as physical presence, a traditional advantage for traditional incumbent banks, has become less meaningful.
Fintechs and big tech companies benefit the most from the loss of trust due to their agile strategies, decentralization and innovative business models, which have been accepted.
However, rising inflation, geopolitical uncertainty and energy prices justify investing in crypto, so does gold matter?
“Crypto can give big gains, but also huge losses. Its volatility is not for the faint-hearted. Gold is stable. It’s not about getting rich quick, it’s about maintaining your value against fiat currencies,” Cozens said.
For Glint, it’s not one or the other, but the reasons above demonstrate that consumers need to diversify their investment portfolio and have money in both crypto and gold.
“There is room for crypto and gold,” he said.
However, it is debatable whether there is a long-term need for Glint. What happens if inflation goes down? Many investors view gold as something of limited use, primarily for jewelry, scared individuals, or speculators.
“Our existence is not based on fear”
“Our existence is not based on fear; we will always need to save and protect our hard-earned money, even in good times,” Cozens added.
In the long term, Glint plans to create a gold-based echo-system connected but outside of the banking system, where they can bring Glint’s vision of a world where everyone has the opportunity to thrive.
- About the Author
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Helen Femi Williams is a freelance journalist and podcaster interested in fintech, politics, economics and their intersections.
Prior to this role, she worked as an innovation consultant developing insurtech and fintech products and ideas for brands, startups and large corporations. She studied International Relations at the University of Nottingham (UK and Malaysia).