Is BullionStar’s Bitcoin idea as good as gold?

Realising Bitcoin’s potential as a game changer in the financial world, some companies like BullionStar now enable investors to trade commodities like precious metals for it

Image Courtesy: BullionStar

Image Courtesy: BullionStar

Bitcoin and gold share a lot in common. Both have to be ‘mined’, are essentially limited, deflationary and can act as a store of value. Therefore, it seems only natural to see precious metal companies warming up to Bitcoin.

Swedish serial entrepreneur Torgny Persson, the CEO of Singapore-based precious metals exchange BullionStar, was also struck by one such golden idea — trading gold bullion for a digital commodity – Bitcoin. BullionStar essentially consolidates trading, transaction and storage of precious metals into a single entity, disintermediating and simplifying the trading process for investors. BullionStar is the first company in Asia Pacific, and perhaps the world, to trade precious metals for Bitcoin.

When asked about the origins of this venture, Persson explained, “Precious metals have been used as money throughout most of the recorded history. Every time some sort of paper money has been tried, it has failed. I believe that the current money system, where money is created out of thin air, is doomed to fail as well. I, therefore, grew interested in precious metals as a form of savings around 2004.”

His first foray into commodities investment involved founding LibertySilver.se in Sweden in 2008, before expanding to Estonia in 2011 with LibertySilver.ee. He was aware of Singapore being business-friendly, given the government’s support and security. Later  when he learned about Singapore’s tax exemption on precious metals, which took effect in October 2012, he evaluated opportunities to establish a Singapore office.

BullionStar became operational in Singapore in early 2013, enjoying high growth and according to Persson claims has achieved a sales turnover of S$70 million (US$56 million) for 2014.

Also Read: How does Bitcoin differ from other non-traditional currencies?

Trading in Bitcoin
When asked why he chose to allow customers to trade and exchange gold for Bitcoin, which has been notoriously volatile in the past, Perrson explained, “Bitcoin is the leading cryptocurrency. As we are a large well-renowned bullion dealer, we prefer to accept payment methods which have a wide user base and that have withstood the test of time. Bitcoin is the largest, most used and relatively, the most stable cryptocurrency. This is why we’ve enabled it not only as a payment method, but also as a ‘currency’ for customers to view prices, holdings and charts.”

In response to customer demand for Bitcoin payments to be supported, Persson added that transactional banking engines were slow, costly and inconvenient, while Bitcoin enabled rapid, semi-anonymous, user-friendly and low-cost transactions.

When asked about customer response to the implementation, he described it as modest, noting that while the demand for Bitcoin payments is growing, it continues to represent a fraction of the total sales volume. Seeing more opportunities in the cryptocurrency market, which is a relatively underdeveloped space, it seems further business opportunities lie ahead for BullionStar.

About the existing regulations on cryptocurrencies, Persson said, “Singapore is open for business. The government is supportive of bullion. With regard to regulation for cryptocurrencies, Singapore was one of the first countries to recognise the phenomenon of Bitcoins and issue guidelines for how it should be handled, although the regulatory framework still has room for improvement.”

It seems that Bitcoin, currently termed as the “digital petroleum” of our time, is now the equivalent of digital gold as well.

Also Read: Bitcoin’s real value lies in the disruption it promises

Shiwen Yap

Shiwen is passionate about exploring science, technology and entrepreneurship ideas and is an avid advocate of open source technologies and methodologies.

Related posts

Top