Digital Gold "Gifting" Gains Popularity In China

JulieW

JulieW

Well-Known Member
Silver Stacker
Oh dear!

China's virtual gifting market, typically the domain of plugged-in young consumers celebrating special occasions or flirting, is luring major financial institutions keen to boost trade of another auspicious commodity: gold.

Tencent's digital gold packets, known as "microgold", are backed by the country's biggest bank, Industrial and Commercial Bank of China (ICBC). They allow users to send funds that track the real-time value of gold to friends over the firm's popular messaging platform WeChat.

It's a financial innovation on the concept of virtual gifts, such as digital roses and chocolates, more commonly used in online communities and which have more sentimental value than any tangible economic worth.

For financial institutions, China's booming virtual goods and smartphone-driven exchanges offer new markets to boost trading volumes in everything from banking services to gems.

ICBC, in an internal memo seen by Reuters and sent to staff on Friday, said the WeChat microgold platform had helped drive "explosive growth" in new gold accounts.

Over the recent Lunar New Year period, WeChat users sent 70,000 microgold packets worth just under 100 million yuan ($14.51 million) across the chat platform, the ICBC document said. It expects over 300,000 new gold accounts to be opened as a result of the Tencent tie-up. Neither ICBC nor Tencent were immediately available for comment.

While the volumes are relatively small, the take-up of similar virtual products on the WeChat platform suggests room for growth.

Kong Lingxin, a 20-year-old student from the northern city of Tianjin, uses her smartphone to buy, gift and hoard gold online.

Kong has spent 10,000 yuan ($1,452.88) of her savings on gold derivative products this year on Alibaba Group Holding Ltd-linked platform "Cun Jinbao" literally "store golden treasure".

"My family has a history of collecting gold bars, which influenced my choice of investment," said Kong. "I chose an internet platform because it's easy to track gold prices, see your profits and make trades."

Gold analysts said the push by tech firms into the sector, though still at an early stage, had potential longer-term to stir up a sluggish Asian market if it caught on.

"It will become a support for gold demand and the gold price if WeChat gold packets become popular, considering the amount of traditional red envelopes users send," said Guotai Junan gold analyst Xie Qingpeng.

Beijing has taken note of the trend. The Ministry of Industry and Information Technology (MIIT) issued a guideline last week, calling for tech to play a bigger role in gold trading.

http://www.zerohedge.com/news/2017-...–-digital-gold-gifting-gains-popularity-china
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I look at it this way....

1 the next leader in gold will be china and Chinese metal exchange will set the price.
2 much better than bitcoin etc, where the backing is well even less than Venezuelan currency. Bear in mind other than speculators, no one advocates digital currency (ps I have a sizable amount as a speculation buy)
 
Presuming it isn't fractional gold in a paper market. I assume that the Chinese would have a physical backing to it but you never know. They did invent paper money.

From another angle, it's an interesting way to store your gold - lend it to your population with a paper promise so grabbing it back is super easy.
 
JulieW said:
Presuming it isn't fractional gold in a paper market. I assume that the Chinese would have a physical backing to it but you never know. They did invent paper money.

From another angle, it's an interesting way to store your gold - lend it to your population with a paper promise so grabbing it back is super easy.
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Let make a few distinction here, this isnt a Chinese government product, this is tencents product, for all its worth it might not even be gold backed.

I dont trust any Bitcoin exchange
I trust Tencents more than any Bitcoin exchange -> BUT Tencents is just a mixture of Facebook, Steam, Ebay and Paypal combined into one, I wouldnt use any of them for my saving lol.
ICBC - is government backed, so I trust it.

Just my2cents :)
 
Can any body tell me ,What colour is digital gold?
How many bits of binary code gold can be held in your hand?
How do you cash in a micro ounce? (My dealer hasn't yet begun distributing these quantities.)
Seriously though,so if gifted in micro ounces when it finally rreaches a couple of troy ounces,do you just go to the bank and withdraw it?
 
Rad Dood said:
Can any body tell me ,What colour is digital gold?
How many bits of binary code gold can be held in your hand?
How do you cash in a micro ounce? (My dealer hasn't yet begun distributing these quantities.)
Seriously though,so if gifted in micro ounces when it finally rreaches a couple of troy ounces,do you just go to the bank and withdraw it?
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Just like Perth Mint program, I presume you can walk into any or designated branches of icbc and take gold or cash when you want to cash out or just have cash transferred to ones bank account.
 
I see it...I hear it... but I dooon't believe it.
It's quite a different concept and sounds pretty cool if that's how the system actually worked.( walking in and simply withdrawing gifted PMs)
 
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