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The legendary gold bug will be digitized.
Billionaire precious metals miner and bullion investor Eric Sprott, his family company, and long-time colleague Peter Grosskopf are collaborating with crypto entrepreneurs to create a new generation of crypto entrepreneurs. is launching Argo Digital Gold, a platform designed to provide an avenue for investors in own physical gold.
Toronto-based Argo will compete with existing bullion funds, including products offered by Mr. Sprott’s former company, Sprott Inc. SII-T, which managed $28.7 billion. Sprott retired from the company in 2017 and now supports his daughter Larissa Sprott in a precious metals sales and storage business called Sprott Money.
Argo differentiates its products by offering 24-hour trading, low fees, and fractional ownership of gold bars stored at the Royal Mint of Canada. Most existing gold-based securities are exchange-traded funds (ETFs), which can only be bought and sold when the stock market is open.
“This digital platform will make precious metals more accessible to a younger generation of tech-savvy investors who want to own and store gold,” said Sprott Money President and Argo Board Member. member Sprott said in a press release.
Argo’s products, such as cryptocurrencies, are outside the traditional financial ecosystem of banks, stock exchanges and investment dealers.
“If you’re buying gold to offset the risk of financial system failure, why would you need to own gold in the financial system?” Argo chairman Grosskopf said in an interview.
Argo has been building the system and working with regulators over the past year, and Grosskopf said the company plans to launch the product by this summer. The company plans to pitch its concept to gold miners and other industry players this week at the Canadian Prospectors and Developers Association annual conference in Toronto.
Mr. Grosskopf spent 12 years as chief executive officer at Sprott Inc. before spinning out the company’s mining-focused investment dealer division in 2023 and branding it as SCP Resource Finance LP. “It’s great to be partnering with Eric Sprott again,” said Grosskopf, now his CEO of SCP Resource Finance.
Mr. Sprott founded his eponymous asset management company in 1981 and pioneered an industry that offers investors ownership of publicly traded securities backed by physical gold and precious metals such as silver and platinum. Investors currently hold US$210 billion in gold ETFs, according to the World Gold Council, an industry group backed by 32 mining companies.
The largest ETFs in this sector include SPDR Gold Shares, which is listed on the New York Stock Exchange; This equates to US$54.3 billion in bullion, with Sprott’s flagship physical gold trust worth $6.5 billion and also holding gold at the Royal Canadian Mint.
Argo’s management team includes President Michael Petch, who previously worked at CoinShares International, Inc. to create a digital Launched gold products. In an interview with CNSRF, Petch said the combination of cryptocurrency markets, blockchain technology and bullion is “groundbreaking.” This is a turning point for the gold industry. ”
“The tokenization of gold provides an opportunity for the industry to successfully market gold to investors,” Petch said. He said Argo plans to introduce additional products backed by other precious metals such as silver in the future. The company also plans to secure storage space in other vaults outside the Ottawa-based Royal Canadian Mint.
In addition to the Sprott family and Mr. Grosskopf, Argo’s investors include Robbie Pride, former vice chairman and head of global equities at TD Securities, the investment dealer arm of Toronto-Dominion Bank TD-T.
HSBC Holdings PLC HSBC-N, one of the world’s largest banks, also plans to launch a digital gold product this year. Each HSBC gold token represents 0.001 troy ounce of precious metal, which becomes part of a 400 troy ounce gold bar held in the vault.
When the London-based bank announced the project in November, John O’Neill, HSBC’s global head of digital asset strategy, said in a press release that the product would be a “real-world asset,” such as gold linked to tokens. “This reflects investor demand for assets,” he said. Even “native digital assets” such as cryptocurrencies.
In 2022, the World Gold Council and the London Bullion Market Association will ensure the integrity of the industry, including measures to ensure that gold bars are authentic and responsibly sourced. We collaborated on a project aimed at The initiative, branded as Gold247, is also developing ledger blockchain technology to provide a secure digital supply chain for the gold industry.
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