Pitch for Yat Siu & Animoca Brands: Tokenizing "Gold in the Ground" with Bank Collateral / crypto / BTC
NEWS: Basel III significantly elevates the status of physical, allocated gold by classifying it as a Tier 1 asset and a High-Quality Liquid Asset (HQLA), similar to cash and government bonds.This change means banks can now hold physical gold as part of their core capital reserves without incurring additional capital requirements.This reclassification is a key component of Basel III, which aims to strengthen the global banking system by enhancing capital requirements and liquidity standards..
The Opportunity:
Basel III's reclassification of physical, allocated gold as a Tier 1 HQLA (effective July 1, 2025) is a game-changer for banks. It legitimizes gold as a core reserve asset, signaling a shift in global financial architecture. This creates an unprecedented opening to bridge traditional finance with the digital asset world, especially concerning a massive, untapped gold market: proven gold reserves still in the ground.
The Problem Your Solution Addresses:
Illiquid "Ground Gold": Gold miners, particularly small caps, possess vast proven reserves that are currently illiquid until extracted. They often lack the immediate cash to accelerate extraction, leading to slower returns and limiting their growth.
Central Bank Demand: As central banks continue to accumulate physical gold, a future supply crunch is plausible. "Ground-vaulted" gold could become a critical next frontier for backing national assets and trade.
Untapped Collateral Potential: Despite its inherent value, gold in the ground is not easily collateralized by traditional banks due to perceived risks and lack of a clear framework.
Your Vision: "Ground Gold" as a New Financial Product via Animoca Brands
Animoca Brands is uniquely positioned to pioneer this new market by leveraging blockchain technology to create "Ground Gold Tokens" and facilitate bank-backed financing:
"One Coin = One Ounce In The Ground" (or fractional equivalent):
Concept: Launch a new crypto token (e.g., "Terra Aurum Token" - TAT) where each token represents a specified fraction (e.g., 1 TAT = 0.01 ounce) of proven, independently verified gold reserves from a specific mining project.
Transparency: Blockchain immutability provides transparent, real-time verification of reserves (via third-party audits and geologists' reports linked on-chain).
Valuation: The initial token price could be dynamic: (Proven Gold Value - Expected Cost of Extraction) / Number of Ounces Tokenized. This directly links the digital asset to real-world, fundamental value.
Bank Finance & Collateral Innovation:
Bridging TradFi & DeFi: This is where Basel III comes in. If banks can hold allocated physical gold as Tier 1, they may be incentivized to explore more innovative ways to secure gold.
Collateralizing the Token: Banks, or even DeFi protocols, could provide loans against these "Ground Gold Tokens." The token itself, representing a claim on verified in-situ gold, becomes the digital collateral.
"Bitcoin as Collateral, Interest on Top": For an extra layer of innovation, a portion of the mining company's existing Bitcoin holdings could serve as secondary collateral for initial financing, earning interest, while the "Ground Gold Tokens" establish themselves.
Strategic Capital Injection for Miners:
Immediate Liquidity: The capital raised from the initial sale of these "Ground Gold Tokens" (or loans against them) goes directly to the mining company.
Accelerated Extraction: This cash can fund drilling, infrastructure, and operational expenses to quickly extract the gold, which many ASX small-cap miners currently lack, transforming illiquid assets into physical gold faster.
"Buy Up Cheap Shares": The capital can also be strategically used by the mining company to consolidate its own equity at attractive valuations, benefiting existing shareholders as production ramps up. (BEZ ASX through Quantum Metals tried this but was unsuccessful sofar)
Why Animoca Brands?
Pioneer Spirit: Animoca Brands thrives on pushing the boundaries of digital ownership and Web3 integration with real-world assets.
Blockchain Expertise: Deep experience in tokenization, smart contracts, and building robust digital ecosystems.1
Investor Network: A vast network of crypto-native and institutional investors keen on innovative, asset-backed opportunities.
Future-Proofing: This initiative anticipates the evolving role of gold in global finance and positions Animoca at the forefront of a potentially multi-trillion dollar market.
Conclusion:
This isn't just about another crypto coin; it's about pioneering a new financial instrument that unlocks immense value from real-world assets, provides liquidity to vital industries, and aligns with global financial shifts. Animoca Brands, with its vision and capabilities, is the ideal partner to bring "Ground Gold Tokens" to fruition.
My note: Definitely hedges the volatile BTC position!
