Summary:
On Prime Time, Rachel Kelly and Timothy Go spoke to Victor Foo, CEO and Co-Founder of SGPMX who shared more on the world’s first 100 percent physically-backed precious metals exchange, and how investors can get involved.
Transcript:
Rachel Kelly:
You’re listening to Prime Time on Money FM 89.3. I’m Rachel Kelly joined by Timothy Go.
Gold seems to be regaining some of its momentum with prices pushing past that $1,800 per ozt. Number for investors who are interested to buy gold but perhaps concerned about storage, security.
There are of course options such as paper gold.
Timothy Go:
So-called digital offering is available from Singapore Precious Metals Exchange, and it launched a world first end to end platform that democratizes precious metals investments. Let’s find out more now Victor Foo, CEO and Co Founder of SGPMX is joining us on the line.
What’s the stock market and how does it differ from your current offering?
Victor Foo:
Good evening, Timothy and Rachel. Thanks for having me on the show.
Well, Stacker Market is something new that we have created from the collaboration between ourselves and Scottsdale Mint, USA. So we’ve been around for the last ten years and as an exchange like a bullion dealer, our role was to basically match both buyers and sellers. So as a company, we don’t take positions. Just like the Stock Exchange, we match buyers and sellers. So Stacker Market is something that we have been aspiring to due to reach out to the masses.
As you know gold is something that is expensive and not necessarily accessible to the mass market. So by having this new platform, we have fractionalized the traits to as little as one US Dollars, which means today everyone can afford to basically trade in goal.
Rachel:
And that’s interesting in terms of the buy in for this. Because I was curious as to how this differs from you know other trading options when it comes to gold. Because there are other options as opposed to buying physical gold, aren’t there? Perhaps you can walk us through the thought process behind launching this and what exactly investors would get if they were to buy an investment in gold through this platform.
Victor:
That’s a good question. By us operating at the Freeport in Singapore, which means every single piece of gold traded is fully allocated, so what we’ve done is we’ve allocated it with one’s kilo bars and fractionalize it digitally, which means if you put in a dollar, you actually have ownership of a fraction of that kilobar which is sitting in the vault. So it could be you buying over 10 crates and reach a gram of gold, and then you can physically pick it up. That’s an option.
Rachel:
Is there a minimum for the amount that you can take out?
Victor:
So the minimum size for gold is 1 gram, which is about 60 U.S. dollars today.
Rachel:
Right, I see. So what kind of fees are involved then? You’ve shared the minimum trade size and the minimum quantity that you can withdraw from your vaults. But are there fees involved?
Victor:
Yes, so actually the gold and silver that’s traded on the platform, we do not mark up on the prices. You actually trade at spot and we charge a trading fee of 1% for gold and 1.5% for silver.
Timothy:
Interesting. Alright, we’re talking to Victor Foo, Co Founder of SGPMX and the CEO as well. Bitcoin has been touted as digital gold for the next generation of investors, but what you are really offering is digital gold. So can you tell us about the people? The profile of investors who may be interested in this kind of product?
Victor:
So the timing about digital currencies has been around for less last ten years. And that was one of the reason that basically took us to embark on this journey to create this platform. To mimic what digital currency like Bitcoin is. But the main difference or our proposition is the fractionalized amount mimicking it should currency is fully backed by an intrinsic product or commodity and gold and silver. Unlike a digital currency basically has virtually no backing.
Rachel:
I see. So can you tell us what kind of demand you’ve seen since launch? How much has been traded so far?
Victor:
This platform has been around actually for the last four years. But we just officially launched it. Mainly our volume comes from the US and Europe. So we’ve onboarded over 100,000 new customers just from the beginning of this year.
Rachel:
100,000, did you say?
Victor:
Yes, new customers. Why this sudden surge of people is because as I mentioned, the minimum trade size now has been reduced to just US$1. So this basically has opened up opportunities to basically everyone what about demand from Singapore investors. So the launch from US has now ripple just to Singapore. That’s why we’re having this discussion. And we foresee that many more people are going to come onboard one or the main attraction. As you know, Singaporeans basically like a good bargain. The storage fees are free. So one of the pain points of buying physical bullion is storage fees or finding somewhere safe to store it because you need insurance, you need support, security. So this is a first time offer where one in Singapore could have their bullion store in the state-of-the-art storage Freeport and pay no fees.
Rachel:
Very interesting. So walk us through. I’ve just got a quick question on gold prices. So how does it work then? I buy a piece of gold and the price goes up–that’s great. I make some money but what happens if I lose money on your exchange?
Victor:
In the exchange, as I mentioned we don’t take positions. You as the investor that buy your gold and silver–you take positions. So gold price will go up, gold price may come down. As the owner of that fraction of that bar, you can basically choose when to buy itself, and if the prices is low, you could hold it on or redeem it physically and hold it in your hand.
Timothy:
Well, SGPMX turns 10 this month. What are the lessons that you’ve learned in past 10 years?
Victor:
So starting from the onset this was basically in 2009 just after the global financial crisis, we basically wanted to give a physical value proposition to our customers. So over the last ten years we’ve seen gold prices rise to its all-time high to about $1,900, and then dropping down $1,050 and last year all time high breaking $2,000 levels and now at about $1,800.
We’ve seen a trend of clients customers coming on board because of the global uncertainties, geopolitical traits in USA and China. So people are coming to us as a hitch, as a safe haven.
Rachel:
Congratulations again on that 10 year milestone. That’s quite a significant one. I’m just curious though how are you gonna be celebrating?
Victor:
The biggest celebration was the launch of this new platform–Stacker Market. Because after 10 years, we felt that we wanted to give back to the community or globally, where one can now have an opportunity. So this $1 minimum is basically our gift back to the world.
Timothy:
That’s good. All right, moving forward. Any major projects in the pipeline that you can share with us?
Rachel:
Yes, what did the next 10 years hold for you?
Victor:
So we believe that we’ve all this uncertainties happening around the world, everybody wants to have a good deal. Every wants to be able to save or accumulate in something that is safe. So we believe with this new program through Stacker Market, we will be launching more initiatives. One of it is we have partnered with Visa and Master through a local company where we will be able to run by selling their bullion; will be able to link their proceeds of sale into the Visa prepaid card. So which means now you can buy a cup of coffee with your gold.
Rachel:
When you’re launching that, Victor?
Victor:
That’s already launched actually, together with the Stacker Market. So you can just download your prepaid card and use it.
Rachel:
I see. Well Victor, thank you so much for sharing all those updates with us and all the best for the next decade.
Victor:
Thank you.
Rachel:
We’ve been speaking with Victor Foo, CEO and Co Founder of Singapore Precious Metals Exchange right here on Money FM 89.3.
Source: MoneyFM 89.3, July 9, 2021