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A Global Bankers Cryptocurrency?

Op-ed - A Global Bankers Cryptocurrency?

The Bitcoin buzz is pervasive and a lot of people are trying to understand this whole new concept of some kind of money that exists somewhere out there in cyberspace. Bitcoin advocates like to point out the advantages of a unit of exchange that potentially reduces transaction fees for users. But more importantly, Bitcoin operates OUTSIDE the existing establishment financial system. That is a main attraction for more and more people as countries all over the world create more and more of their fiat currencies in an effort to stave off a massive deflation event. The expansion of fiat currency has been seen as essential to saving the existing financial system from possible collapse. But the price paid is increasing loss of confidence and trust in currencies.

So let’s look at this from the point of view of a global banker whose job is to maintain stability and confidence in the existing world monetary system (say the IMF for example). Things have not gone too well in recent years. People are looking around for alternatives. Bitcoin surfaces as a very popular one. The technology is new and not as easily regulated under the existing financial banking system.

What do we do about this? Maybe instead of trying to wipe out Bitcoin and other digital competitors, we decide it would be great to have a cryptocurrency of our own Perhaps we could find an up-and-coming financial tech startup to beta test one for us. They might try out this idea quietly in a less high profile part of the world to see how it might work. And, if we are going to ask people to trust our digital currency, why not just make it an “asset backed currency”, fully approved and backed by our existing global financial banking system.

That will never happen, you say. Not so fast my friend! Now Klickex enters the picture.

Recently, after doing research for my blog site on potential future monetary system change, I posted this little item: An IMF Approved Digital Currency?

It’s about a company based in New Zealand (Klickex) that up till now has just been a peer-to-peer digital money transfer specialist. They have a technology that allows people in the South Pacific to transfer money at far lower costs than using traditional money transfer services. They have been a big help to unbanked people who need to send money to relatives or others and had to pay very high fees for small transfer amounts.

But that’s not all Klickex has been up to. Last November they did a news release about a new “asset backed cryptocurrency 2.0”. Along with that was a very interesting 7 minute video where they presented this new idea at FinovateAsia 2013.

Ok, that’s nice, but there are a lot of startups. What makes Klickex different?

Maybe this. Klickex seems to have caught the attention of some interesting players in the existing global banking system. Earlier in 2013 they were awarded the prize for top startup at the Innotribe Challenge. Guess who sponsors that award. It’s SWIFT. A key partner in the existing global banking system.

Klickex CEO Robert Bell had this to say to Bank Innovation, “SWIFT loved that we want to set up a new global central bank to eliminate global FX risks and costs… and have already done it in the Pacific with United Nations Capital Development Program funding.”

Excuse me. Did I see that correctly? SWIFT loves their idea to set up a new global central bank? They have already done it in the Pacific with UN funding? Interesting.

A little more research turned up the fact that the World Bank has said some nice things about Klickex related to their existing money transfer technology. It is used with Digicel Mobile Money in the South Pacific. It seems their ability to reach out to the unbanked and lower fees for them has gained approval at some high profile global institutions.

In November 2013, they inform us in the video above they have been testing this “asset backed currency” for awhile now. And they apparently have the attention of some friends in high places like SWIFT, the IMF and the UN.

Their investor profile at Finovate2013 lists the following key investors: SWIFT, EU, AusAID, United Nations Capital Development Program (UNCDP/PFIP), HM NZ Treasury, Private Investors, Friends and Family & Management.

They also mention these key partnerships: SWIFT & The United Nations Capital Development Program.

So let’s recap. Here we have a small financial tech startup running a seemingly routine business model. It helps poorer unbanked people have improved ability to transfer money with low fees.

They have a new product though. It’s an asset backed cryptocurrency. It is working on regulatory approval with some very high profile global institutions to function INSIDE the existing banking system. They say the approval process for their currency takes from 6-60 weeks in various nations.

Some contact I had with Klickex convinces me that they are a company to keep an eye on for the future. Bitcoin users may find this worth following to see what unfolds. But if their GSD (Global Stability Dollar) really becomes a “global digital reserve currency” that is asset backed and establishment approved, I suspect we all will want to keep an eye on it.