The Sunday Mail
SOUTH Africa-based African Medallion Group (AMG), which is pushing for pan-African cryptocurrencies, recently bought R10 million worth of gold from the Rand Refinery of South Africa as it seeks to further buttress it digital currency.
Cryptocurrencies are digital assets designed to work as a medium of exchange, and their issuance and value are secured through encryption (cryptography).
Bouyed by the rising price of gold on the international market, the US$1AMD (African Medallion Dollar) gold-backed medallion has since increased to US$2,06 per unit.
“The positive value shift has come about as a result of the recent rise in the price of gold against major currencies . . . To date, the AMG has purchased over R10 million worth of gold from the Rand Refinery (South Africa),” said AMG in a statement last week.
Initially, the group — which has since been registered with the London Metal Exchange — launched 10 one-quarter ounce medallions on April 2, 2017.
It was subsequently followed by the issue of 100 AMD$5 on May 25, 2017 and the gold-backed AM$1 that was released on June 16, 2017.
Recently, AMG partnered with the House of Mandela to also issue the US$10 gold-backed Pan African Mandela Medallion.
Its trading price will be linked to the price of gold.
It adds to the bouquet of services, which include the US$1 virtual medallions that can be bought online and redeemed in Malawi, South Africa, Tanzania, the UK, the United States, Zambia and Zimbabwe.
“This virtual medallion is a cash on demand solution which gives you the ability to purchase desired units of virtual medallions using a debit or credit card from any country. After your purchase is complete, you will be able to immediately cash-out your virtual medallions in any currency (for example, British pound, South African rand, United States dollar, etc).
This is a global solution which works in multiple locations (including UK, USA, Zambia, Malawi, Tanzania, Malawi, Zimbabwe, South Africa etc),” said AMG in a recement statement on its website.
The company announced a card-payment threshold of R5 000 (US$385) per transaction, with values above the limit being processed in batches thereafter.
In essence, cash-out transactions can be made through the AMG Visa card, which can facilitate instantaneous withdrawals from any automated teller machine in South Africa, or fund transfers to any bank account around the world.
There is now a gradual shift in the market from fiat money into commodity-backed currencies.
Market watchers forecast gold prices, which have risen by more than 12 percent since the beginning of the year, will reach US$1 400 per ounce by December.
Of late, digital currencies like Bitcoin, Ethereum and medallions have become viable investment and trading options.
Prices of the highly traded Bitcoin, which have since quadrupled this year, rose to a record high of US$4 483 recently.
According to global firm Autonomous Research, companies have raised more than US$1,3 billion this year in digital coin sales.
But limited Internet penetration and financial illiteracy are hampering the growth of cryptocurrencies in Africa.
The Internet penetration rate stood at 50,1 percent as at December 31, 2016, according to the Postal and Telecommunications Regulatory Authority of Zimbabwe.
