WASHINGTON – A new digital currency backed by gold is billing itself as a more compliant, liquid and ultimately reliable store of value than decentralized systems such as bitcoin. CMO Inc., doing business as COEPTIS, has been beta testing its digital currency platform for two months and over the next two weeks will be expanding its membership to the invitation-only platform. COEPTIS issues its own digital currency, calling it Global Standard Gold (AUG), which is backed by physical gold and held in a trust account. The digital currency is issued after a licensed financial institution, acting similarly to a primary dealer, acquires the gold on the open market and deposits it in the trust. The institution then notifies COEPTIS, which issues the proprietary currency. The currency is meant to bridge the gap between physical and digital currencies. Because it is backed by gold and held in a trust, in theory it can be liquidated at market value at any time. The founders believe gold enthusiasts looking for liquidity will be the earliest adopters but hope to eventually reach a larger market. Its digital nature allows for the potential to process payments more efficiently, which could eventually appeal to online merchants and banks. "It is a situation where the currency itself is never going to default because if anything were to go wrong you are in the position where you can liquidate the gold to convert to currency to convert back to a national currency," said Bill Cunningham, chief executive officer of COEPTIS. "That is a very strong provision of the system and distinctly different than any of the cryptocurrency." Many cyptocurrencies such as bitcoin use a decentralized system, but COEPTIS uses a centralized one. While a decentralized currency avoids the potential for a single point of failure, Cunningham claims a centralized one makes it more efficient and cheaper to operate. "We have looked at the cost of running the blockchain in terms of how much money is invested" and "we are at orders of magnitude less expensive" if COEPTIS eventually achieves the scale of bitcoin, Cunningham said. (COEPTIS also offers a collateral-backed currency, unlike many alternatives.) Cunningham added that using a centralized system allows for greater protections against money laundering because it is "very easy to monitor…unlike a cryptocurrency where you can leave a well regulated exchange and enter into the netherworld," Cunningham said. The platform for COEPTIS is a reboot from an earlier predecessor known as E-gold that was shut down after it was found guilty in 2008 for money laundering and operating an unlicensed money transmitting business. (E-gold's founder, Douglas Jackson, who was convicted of money laundering violations, will be a consultant for COEPTIS). Cunningham contends that the E-gold operators were not acting nefariously, but rather made poor legal decisions that caused them to run afoul of anti-money-laundering regulations. He said the E-gold experience has benefited COEPTIS because the regulatory guard rails are clear – and it's clear any digital currency needs a strong anti-laundering program in place. "We know precisely what we need to do and we are doing more" than is required, Cunningham said about the E-gold experience. He also added that because COEPTIS is a private system, it can implement a strong customer identification program. "To become a member you have to go through that customer identification," Cunningham said. "If you know other people you are transacting with have gone through the same identification that you did, you are going to feel better knowing they have been vetted as well."
A new gold-backed digital currency has been launched by COEPTIS , operating as COEPTIS , which is billing itself as more compliant, liquid, and reliable as a store of value than its non-gold-backed peers. The platform for the new currency platform has been under beta testing for years and is to expand its membership to invited participants over two months . The currency is called Global Standard Gold (AUG), and is backed by physical gold, which is held in a trust account. The currency aims to combine some of the positive aspects of both digital and physical currency, pairing efficiency of use of a digital currency with the reliability of gold-backing; while cryptocurrency industry enthusiasts have called for such a currency for the next two weeks , COEPTIS appears to be the first to market.