September is Heritage Month and a great reminder to acknowledge our country’s countless achievements. You probably think of Olympic medals, and rugby world cup wins, but if you dust off your history textbook, you will be reminded that another impressive triumph is the South African Krugerrand.
Originally minted in South Africa in 1967, it was the first of its kind in the world. The Krugerrand was the first modern gold bullion coin - consisting of one troy ounce of fine gold, in a coin blended with a copper alloy for hardiness, to yield a 22-karat (91.67% purity) gold coin of which over 50 million ounces have been sold globally. This has made the Krugerrand the most widely traded and most liquid gold bullion coin in the world.
A joint invention by the South African Reserve Bank and the Chamber of Mines at the time, the idea behind the coin was to create something that would stimulate local demand for South Africa’s gold production and appeal to collectors and investors alike. Interestingly, the coin is also legal tender in South Africa in terms of the South African Reserve Bank Act of 1989 and can therefore also be presented as payment.
We have proved that we are serious about innovation with over 45 years in the industry, traditional retail shops, an eCommerce site and pioneering cryptocurrency payment systems. As the South African market leader in gold coin trading, we are again embracing new technologies by collaborating with Troygold, a Stellenbosch based fintech startup.
In 1967 The Krugerrand was revolutionary because it democratised gold ownership for retail investors – at the time an ounce of gold only cost R25. People bought gold as insurance against economic shocks and as an inflation hedge in diversified investment portfolios. But this gold is sitting idle – simply stored in a vault, or safe – awaiting either higher prices or the end of the financial system.
Today, Troygold is on a mission to help gold owners do more with their gold. Troygold’s Fractional Ownership Technology (FOT) digitises physical gold Krugerrand coins and bullion bars. This homegrown technology allows Krugerrand owners who upload their gold onto the Troygold platform, to access financial services and instant liquidity on their gold holdings.
Troygold was founded in 2018 by brothers Bastiat and Dane Viljoen. The pair have experience in the investment banking and gold mining industries. They believe Troygold gives people an alternative to safeguard their wealth – in a stable, non-inflationary money like gold – whilst enjoying the same financial products that those with paper currency have access to. Troygold is building financial tools on gold for gold owners – currently allowing customers to save and spend in gold. They saw an opportunity for a technology-led solution to extend financial services to physical gold owners and are looking to launch additional financial products later this year.
Via an Apple App and Google Play Store supported Troygold mobile app, a customer opens a Troygold account that offers a gold savings wallet that digitises the customer’s gold - bought or uploaded onto the platform - with a linked Mastercard debit card. The card is enables spending of the gold’s ZAR value at any Mastercard accepting stores. The gold savings wallet is linked to specific, numbered gold Krugerrands and bars in a vault. Each owner receives an ownership certificate that indicates which bar or coin (with indicated serial number) the customer owns, along with details as to where it is stored. Troygold currently has storage facilities in Singapore and Johannesburg, where the physical bullion bars or gold Krugerrands are securely stored and fully insured in the world’s safest vaults.
The South African Gold Coin Exchange (SAGCE) & The Scoin Shop, and Troygold recognise that the ongoing volatility of the global financial system and the deteriorating value of fiat currency make a strong argument for a return to gold-backed stores of value. Gold has a six-thousand-year track record as a safe store of value and is the only money that carries no counterparty risk. In a volatile world, gold offers a safe haven asset that always maintains value. However, most gold sits idle in dark vaults and safety deposit boxes. Troygold introduces utility which changes gold into something that can be used for day-to-day transactions and finance.
We have a strong foothold of eleven brick and mortar stores in all major centres in South Africa and an e-commerce platform. These allow the active marketing of Troygold products to our extensive client base. Our collaboration with TroyGold creates a store network of physical on-ramps into the digital Troygold platform. South African customers can upload or withdraw gold Krugerrands into and from the Troygold platform, directly from The Scoin Shops’ physical retail outlets.
The launch of the gold bullion Krugerrand created a new marketplace and made gold ownership more accessible. Now home-grown technology enables a broader market to save and transact in fractions of gold. The Krugerrand is globally recognised as an immense numismatic achievement; couple that with leading-edge, locally developed technology, and you are looking at two reasons to celebrate this Heritage Day.
Rael Demby, CEO The South African Gold Coin Exchange & The Scoin Shop and Dane Viljoen, Co-Founder and Chief Sales Officer Troygold