While the health crisis is still far from over, all asset classes are already experiencing the first devastating effects of the global recession that awaits us. All of them? Not sure … It’s time to look at what is called “alternative investments” … Interview with Jean-François Faure, CEO of AuCoffre.com
JP Morgan did not think so well. In a communication followed by a report published in September 2018, the finance giant predicted a major financial crisis by 2020. The feeling was good, but reality as often today obviously exceeds all predictions: boosted by the impromptu coronavirus, the looming global recession is already hitting far beyond the liquidity crisis spotted by JP Morgan and its estimate of a 20% correction in the equity market: the action of the bank itself unscrewed more than 40% since the end of February.
In this context, the questions that are on everyone’s lips all revolve around two subjects:
- Towards which safe haven (s) to turn to in the face of oil at the lowest, stocks that are screwing up everywhere, a retail in agony, a real estate promised to a historic fall, and currencies that print by the ton and distribute “by heylicoptère ”(with reference to the expression used by Milton Friedman in 1969)?
- What alternative investments should we study in order to quickly and effectively diversify our portfolio in the face of a company, and therefore an economy soon to be deeply rethought along the lines of a pandemic axis which we know will now unfortunately be recurrent?
Some have already replied that gold will once again become the refuge standard, as it has already been during several crises (and war). Others will soon be announcing the heyday of cryptocurrencies, Bitcoin in mind, in which the long-awaited general public is now starting to pay close attention, worried that the health crisis will be doubled by a fall in “classic” currencies ”.
Others, very wise, have been reaping the fruits of a just vision for weeks, supported by a value proposition that is timely in today’s environment. This is the case of Jean-François Faure, CEO of the AuCoffre group, which offers the “best of both worlds” with its cryptocurrency VeraOne, a “stablecoin” backed by physical gold.
I asked him about his analysis of the current situation from an investor perspective, and asked him to detail what makes his value proposition unique.
When and how did you “fall” into crypto assets?
I first met the people from the House of Bitcoin (Ledger, CoinHouse) in June 2014 to offer them to see if something could be done between them and us, for example from the BTC cold guard. No follow-up and we left the idea dormant (the BTC House, however, they launched the ledger in late 2014 …). In parallel, since 2012 we already had a payment system based on a MasterCard card backed by gold coins, the VeraValors. It worked so well that we detached this activity that we transformed into a form of neobank where the only currency used, the VeraCash, is backed by precious metals. It seemed quite logical to converge this on the crypto universe. In 2016 we made a (successful) poc of management of our police register. We felt walled to go further. So in 2018 will to make a ICO but we conclude that this is not an idea because the only viable economic model was that of selling physical gold to the people who responded to the operation. So the ICO made no sense. It then became a project to sell a paid token with common cryptos. Independent project from VeraCash finally. VeraOne was born. Why VeraOne? Because in parallel it is also a 1 gram coin that it is possible to receive if you want to change your tokens into physical gold delivered to the house. The 1 gram of physical gold is the basic unit, 1 VRO = 1 gram of pure gold.
Do you consider yourself “lucky” or do you claim to have received the fruits of a precise strategic positioning at the right time on cryptoactive assets?
– A boost no, it’s rather the opposite. For example, the original activity was hit hard in 2017 by the soaring price of cryptos. On the other hand, it gave us a great kick to tell us that what we thought we were doing in 2014, what others were doing on the same date, it was not too late to act on our side and take advantage from our experience. Gold, we know by heart, its conservation the same, and the crypto / blockchain skill we have always maintained to know at least what we were talking about. Anyway, the tempo was still good to get started, we did it. Today, the fact that gold is in the spotlight as it was 12 years ago when AuCoffre was launched is indeed a promising context. Then launching new services at the time might suggest that we have a little idea of the price or people’s appetite for gold in advance. This is not the case. On the other hand, we know that gold is cyclical, that it is over-reactive to crises, that an upcoming crisis was obvious to us (just as in 2006 I was thinking of an upcoming crisis). That it came from a virus was unpredictable but precipitated certain things that had to happen sooner or later.
Are you also involved in Blockchain and its applications?
We have been involved in blockchain projects since 2016 and we are currently building a blockchain for consortia that require this type of consortium. techno.
What is the benefit of a stablecoin such as VeraOne?
As a reminder, a stablecoin is a crypto-asset whose price is linked to a stable asset. They were created to be able to exchange cryptocurrencies for stable assets without having to leave the blockchain (originally for high-frequency trading).
The company issuing such a crypto-asset therefore undertakes to own the entire underlying asset in private reserves. Without it, the “stablecoin” would only be the result of an artificial token creation which has no guarantee of value.
It seems relevant here to look at the case of Tether, the main and most famous stablecoin, surpassing Bitcoin since 2019 in terms of daily transaction volume. If the counterpart with the dollar (1: 1) was at the origin of the project, a modification of its backing was made on May 14, 2019, now including loans to affiliated companies. In this regard, if historically the company claimed that each corner was backed by a US dollar, the lawyer for Tether Limited admits on April 30, 2019 that the parity is really only 0.74 €, i.e. (0.74: 1). This radical change is to be put in perspective with the various scandals that have splashed Tether Limited, in particular on the audit of its reserves. Tether’s management had therefore demanded, as early as 2017, that the audit procedure initiated be terminated prematurely because it was judged “Too long and too complex” .
Furthermore, the GTC even mention that Tether Limited does not guarantee “No right to redeem or exchange Tether for money”. Beyond the GTC, it is also Tether Limited which declares that the holders of Tether have no contractual right, no legal remedy or guarantee that the Tether will be in fine indeed exchanged according to their parity.
Similarly, since it is subject to US law, the PAX token (guaranteed 1: 1 with the dollar) has introduced a “setLawEnforcementRole” function allowing the authorities (or anyone who has access to the function) to manipulate any what portfolio.
It is all of these considerations, in terms of consideration, audit and regulation, that lead us to consider VeraOne as one of the only secure solutions on the market. In addition to the various recurring audits, controls and insurance mechanisms in place, detailed earlier, the VeraOne token can exercise an immediate right of exchange and redemption and a proven legal foundation.
Furthermore, the GTC even mention that Tether Limited does not guarantee “no right to redeem or exchange Tether for money”. ButDespite this, they continue to issue hundreds of billions of USDT to the market.
On the other side of the spectrum, VeraOne, it is the expertise of a ten-year leader in the sale of physical gold that has been taken and put on the blockchain, for its practical, fast and immutable aspect. Because the major advantage of blockchain is to have a permanent and tamper-proof register of the property register and the transaction history of the members.
In addition, the audits carried out every year by the company ALS (Australian Laboratory Services) and by the AMUAC (Association of User Members of AuCoffre) certify that 100% of the assets in circulation (emanating from AuCoffre, VeraCash and VeraOne) are beautiful and well kept in physical format (and not paper) in safes at the Ports -Francs of Geneva.
What is the market reaction to your offers?
We post a turnover of 70M euros on the AuCoffre group in 2019, with a clientele composed 90% of French citizens (lforeigners mainly buying our VeraCash offer).
What is your “macro” vision of the crypto phenomenon (adoption, societal change, etc.)?
We are convinced that cryptocurrencies are not intended to replace sovereign currencies, but rather to facilitate their use and complete their failures. The future of cryptocurrencies therefore does not lie in their universalization, but in their concrete application on specific uses. Exchanging instruments par excellence, they are intended to replace traditional markets (like FOREX) in which a trusted third party has hitherto been necessary.
To do this, the latter must above all free themselves from their speculative nature, which skews its purpose and diverts its uses. The speculative bubble at the end of 2017 eroded the confidence of many players in a technology that was nevertheless innovative, and diverted attention from the real innovations carried by the blockchain. However, it has enabled us to understand that the general public’s confidence in cryptocurrencies, and by extension their adoption, will necessarily be progressive and linked to confidence in what appears at first glance to be “intangible”. The Internet, anonymity and the ease of exchanging information, first appeared as a fashion, before being considered the third industrial revolution. It will be the same for the blockchain.
What type of digital asset is most likely to convince users that stablecoins, these intangible assets having a counterpart on assets with stable values? Building on the already mature market liquidity, stablecoins constitute an exceptional new tool in the creation of exchange or reserve portfolios.
There remains the choice of the underlying. Different experiences of stablecoins based on public currencies (like Tether), or even on reference crypto-assets have revealed certain risks, largely due to ambiguities in the management of the counterparty, and we’ve seen prices go below their underlying.
We have chosen, with a conviction supported by years of experience and activity in this sector, to back VeraOne to physical gold. Precious fungible metal par excellence, whose value is timeless, gold is the ideal counterpart to a secure and stable means of exchange. The VeraOne project, far beyond a simple digitization of gold, thus carries with it a vision – that of exchange.
We therefore fully subscribe to the vision of Christine Lagarde, President of the ECB and former Managing Director of the IMF, who already replied in March 2017: ” Whether the value of bitcoin increases or decreases, everyone is asking the same question: what exactly is the potential of crypto-assets? The technology behind these assets, including blockchain, is an exciting advancement that could help revolutionize areas other than finance. It could, for example, strengthen financial inclusion by providing new low-cost payment methods to those without an account. banking and, at the same time, empower millions of people in low-income countries. ”
A final word…
Diversification of crypto wallet: On the cryptocurrency market, have a stablecoin allows you to diversify your portfolio and reduce the risk of global volatility by wallet composed of Ethereum or Bitcoin. If the cryptocurrency market has experienced high volatilities, stable corners are now taking over the market with capitalization going from 1.4 to 3 billion dollars in less than 12 months. Investors do not have an alternative to protect themselves from price fluctuations, it becomes essential that a stablecoin whose underlying is 100% guaranteed to emerge.
Money change : Unlike the usual value transfer systems for individuals, like Western Union whose limits are limited and exorbitant fees, but also for companies, which operate in areas where currencies are not convertible or highly volatile, VeraOne allows instant value transfers at reduced costs.
Blanket : A stablecoin can also hedge positions and hedge market volatility pending the transaction.
<<< Also read: 2020, the year of Bitcoin recovery? >>>
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