SendGold CEO Jodi Stanton has been through the blockchain roller coaster over the last five years, and has the scars to prove it. Today, her young company, SendGold, is live in ten countries in various forms across Asia-Pacific, delivering digital gold money to anyone with a mobile phone, and does so without relying on blockchain.
What is SendGold and how did you get started personally?
“To our customers, we are a very simple product,” Ms Stanton asserts. “We’ve turned gold back into practical money. You can buy it, send it as a payment, gift it cross-border instantly, and sell it at any time. Soon you’ll be able to spend it at merchants as well. It has many of Bitcoin’s attractive properties, but it’s fully-compliant, with an asset at its core.” Stanton stresses that if you buy gold through SendGold, you own full legal title to your gold. It is not a security like an ETF, a derivative or a blockchain security token.
Ms Stanton began her career in risk management in insurance and on Wall Street, helping investment banks both construct and unravel complex derivative trades. But she also bicycled around the globe carrying her own gear, pedalling over 40,000 kilometres across 25 countries including some of the most remote regions on the planet. She’s been communicating and transacting with both the top and bottom ends of town for decades.
“This broad experience is how I really learned about money, its buying power (or lack thereof), and the importance of owning an asset. The gap between the extremely wealthy and everyone else is the widest in history and it’s getting wider, in part because of the way our money systems are designed”, she says.
She adds that even in the age of the mobile internet, cross-border transactions are expensive and slow, relying on complex legacy banking systems and bank currencies that lose buying their power through inflation. And according to Ms Stanton, in many countries these declines in bank currency values have been dramatic. In the Asian Financial Crisis, for example, the South Korean, Thailand, Indonesia, Singapore, and Philippines currencies lost more than 50% of their value in the space of less than one week. According to the Australian Bureau of Statistics, the Australian dollar buys 20% less than it did 10 years ago and 40% less than it did 20 years ago.
“Money is broken, and has been for a long time”, she says.
Ms. Stanton set out to address this growing wealth gap, and put a simple asset into the hands of those who are concerned by money printing, planned inflation, expensive cross-border transactions and the potential for another global crisis.
“Our early customers are sophisticated,” Ms Stanton notes. “Many of them work in the consulting and finance sectors and read a lot of news. They tend to be health conscious and seek to live life to the fullest. Many are well-travelled, politically aware and know that the buying power of their bank money is eroded each year.”
As a money platform, people use SendGold for many purposes. Some send money each month overseas. Some use it as a savings account. Some send gold as a gift. Some social groups have adopted SendGold as a way to routinely split restaurant bills or holiday expenses.
How is SendGold unique in the market?
Ms Stanton states, “I start each and every day with a clear focus on how we can solve problems for our customers and how we can differentiate ourselves in the market for our shareholders. To me these are the same thing.”
According to Ms Stanton, blockchain was designed for digital assets, and any tangible asset-based currency, whether a hybrid cryptocurrency or simply digital like SendGold, are unavoidably more centralised than purely digital alternatives because of the centralised management of the underlying assets.
“All asset-based digital currencies need to address things like regulation, banking integration, liquidity and management, so unlike many others in the market, we started there. And now we have a strong foundation to work from,” she says.
Ms Stanton says they will be able to offer valuable products and services to customers that only a mobile-only company can offer.
She adds that SendGold’s innovation in the gold sector is unparalleled, with its growing Gold-as-a-Service business offer (GaaS). “We have signed on our first few major GaaS partners and are talking to several others including neobanks, global e-wallets, social gaming platforms, reward programs and universities”, she says.
They have also innovated with gamified customer acquisition through its second mobile app “Gold Rush”. It’s like Pokémon Go but with real gold. According to Ms Stanton SendGold can drop real gold in any country to drive awareness.
What have been your key milestones?
Ms. Stanton emphasises that SendGold today maintains the powerful crypto benefits of instant peer-to-peer cross-border exchange, transparency and low cost, but does so in a way that complies with global regulation. The company spent two years making sure SendGold’s infrastructure was globally compliant, secure and low cost.
“Full compliance was non-negotiable for us, not just for legal reasons but because we feel user adoption requires full integration to the world’s existing banking system. Putting gold at the heart of the system also addresses the complexity and price volatility issues of crypto, which are hindrances to large scale adoption”, Ms Stanton asserts. “And we’ve done this with proven, enterprise-scale, bank-grade technologies so SendGold stays in control of the operating infrastructure.”
“Digital asset risk mitigation was like moving air around in a balloon animal. We were excited when we cleverly solved one risk, deflating the arm of the animal, only to see the air expand in the other arm. With distributed ledgers as infrastructure, you have to be careful you’re not simply moving the risk around.”
SendGold spent significant resources to ensure that SendGold is fully-regulated under Australian law. Agencies and laws included in the scope of SendGold’s Compliance Policy include AUSTRAC, RBA, APRA, ASIC, ACCC, AFSA, FIRB, OAIC, privacy laws and the ATO and Australia tax law. Planting SendGold in Australia made sense not only for compliance reasons but because Australia has a long historical association with the precious metal and is the world’s second-largest producer. She said they chose gold as it’s one of the largest markets in the world, it’s well understood, and has delivered impressive returns to investors over the long run.
To underscore SendGold’s commitment to the highest levels of security, Ms Stanton explains that, early on, the company employed Steve Wilson. A global expert in cybersecurity in financial services, Mr Wilson sits on a number of committees and programs including the U.S. National Strategy for Trusted Identities in Cyberspace, and the U.S. Department of Homeland Security Science and Technology program.
“We began with a threat risk assessment (TRA) for both the company and its customers across confidentiality, integrity, and availability,” Ms Stanton explains. “We have maintained a live TRA, a live security policy and quarterly risk reviews with our (financial and cybersecurity) risk committee. We’re not afraid to say we’re obsessed by managing risk and security.”
And while SendGold is low cost, Ms Stanton hinted that the company is busy lowering costs even further and will make an announcement on this subject before the end of the year.
You began with blockchain, but given you are not reliant on blockchain now, is blockchain in your future?
“We started out looking for a solution that satisfied our security, liquidity and compliance requirements to solve real business problems beyond storage and speculation. After 24 months full-time investigation, several in-house trials and an end-to-end prototype on a distributed ledger, we were convinced that blockchain ledgers did not yet present a compelling solution to that brief.” She adds that putting gold on current blockchain platforms presents more effort than it’s worth, adding an unnecessary layer of complexity and cost.
“After almost ten years, very few are using Bitcoin as money, in large part because of these ongoing security challenges”, she says. According to Ms Stanton, user-level security, in particular, has a long way to go, and crypto theft has already topped $1B this year. “The irony of a trustless system.”
But she is keen to point out that the company is immersed in the cryptocurrency sector and ready to move their dedicated tokenised product when decentralised ledger technology is proven, scalable and compliant.
“Blockchain innovation is a long-term fundamental paradigm shift versus a short-term disruptor. We believe it will take years to evolve into practicality. On the other hand, gold has been a store of value for thousands of years. Gold is the only investment asset that has survived every war, calamity, and economic recession in history, and it solves the volatility issue of cryptocurrencies.”
Ms Stanton believes this provides a significant opportunity for SendGold to combine history’s most reliable asset with fintech’s most innovative paradigm shift, as digital money matures.
She claims SendGold’s early work was invaluable and ongoing, and led the team to their unique business model of today.
What is your next goal?
From late 2017 SendGold has been able to accept a customer from any non-sanctioned country (from a compliance standpoint) and is currently live in various forms in India, Australian, New Zealand, China, Vietnam, Indonesia, Hong Kong, Singapore and the Philippines.
Given its compliance mandate, the company rollout makes SendGold a regional, rather than global play, requiring regional expertise across a number of domains including payments, regulatory and anti-money laundering laws.
The company is busy rolling out its peer-to-peer cross-border application with 350 global ways for ‘money-in’ and redemption in 140 currencies in 160 countries at wholesale exchange rates.
Ms Stanton concluded, “We are an iceberg, with very simple customer-facing products, and a robust framework below the surface. We are now ready to scale.”
Find out more about SendGold by visiting www.sendgold.com