Gold’s role as the centrepiece currency of global markets is undisputed. Its legacy position the world over means that no matter who you are, or what country you are from, gold retains its lustre. Gold’s enduring legacy across eras as the ultimate failsafe currency makes it attractive to everyone, with its role in this process only set to increase as increased tokenization of real world assets occurs.

Tokenized Gold’s Use in International Trade

Gold is great at facilitating international transactions. Yet international transactions are expensive, bureaucratic and complex. Settlement risk means all international trade experiences a mark up by sheer necessity, as the banking bureaucracies charge a fee for holding risk on their books. What’s more, banking opening hours means international exchange is not as fluent as it could be. Gold’s frequent use in international exchange is no different.

By tokenizing gold, however, its use as a payment and settlement currency in international trade would be greatly magnified and considerably more efficient than it is currently, unleashing liquidity cross border in hitherto impossible ways. This would be particularly true for gold exporting nations, who regularly deal in the international flow of gold.

Tokenizing gold lets these nations more quickly get their product into the international commercial pipeline. Countries who are used to dealing in gold imports and exports and whose GDP is relatively reliant on gold may well find that the tokenization of gold leads to a rapid increase in their global importance.

Tokenized gold could also power up trade financing, making it faster, more efficient, and – crucially – make it more accessible to small and medium-sized enterprises (SMEs). SMEs could post tokenized gold as collateral. SMEs in developing countries, whose access to traditional banking systems can otherwise be limited, with stringent credit controls and expensive bureaucratic obstacles, can use on-chain gold as a way to engage in cross-border financial activity.

Why Tokenized Gold Could Underpin Global Trade

Fiat currencies, in 2023, underwent a torrid time. As such, enterprises who deal with international trade have to remain constantly vigilant that the value of their cash reserves – or the value of the cash they are receiving – doesn’t precipitously drop. When dealing with large-scale international financing, even a few basis points can annihilate margins and bankrupt companies involved in international trade. It is becoming more attractive, therefore, for companies to consider holding their cash reserves in gold, and use it to trade internationally to ensure that they are not crippled by fluctuations in the Forex market.

Forex as a whole is an expensive process, marred by byzantine layers of administration and powerful intermediaries whose stranglehold on international trade is a nasty expense for countries and corporations a lot. Mass tokenization of both national currencies and real world assets will lead to a more fluid, liquid international market and gold will become the premier asset – as it always have been – for such trade. Whereas gold, till now, has had its own expensive maintenance costs that somewhat inhibit its use as an intermediate currency, with the tokenization of gold, the obstacles in international trade will erode away, and its usage will therefore increase.

Why Gold for International Trade Needs Premium Quality

Of course, the sanctity and reputation of the token posted in such international financing agreements will be paramount. Shoddy,  partially backed, fractionally-reserved gold tokens will have no value in this new economic world order. Gold tokens that are 100% backed by the most premium gold on the market will not only retain their value, but could even be worth more than the face value of the gold itself due to their composite nature, efficiency, and utility in international trade.

This is where Kinka Gold’s $XNK token could have a powerful impact on the world of global international trade. Kinka’s $XNK is issued by a subsidiary of UNBANKED, INC., a Japanese trading company that has been dealing in gold for over 40 years. The gold bullion backing the $XNK is designated for use on the Osaka Exchange, which is under the jurisdiction of the Japanese Financial Services Agency, and is of the highest grade of value. Holders of $XNK above a certain amount can exchange it for warehoused gold bullion at any time.

The $XNK token would, therefore, be an outstanding liquidity token for trade on international markets, should any country, corporation, or individual user wish to use it as such. Although crypto adoption needs to continue in order to see regular use of tokenized gold on international markets, it is the successful issuance of such premium-backed gold like $XNK that will allow this to happen. It won’t be long before the blockchain is frequently used as a settlement layer for international trade by major clearing houses and, when it does, tokenized gold like Kinka’s will spearhead adoption.

Kinka’s gold has multiple uses. It lets retail investors gain access to gold exposure in their portfolios when they would otherwise struggle to, it creates efficient storage and liquidity for gold currently in the market, it acts as a stable token when fiat currencies are struggling to retain their value and, in time, it will be a powerful tool for international trade, even as a stablecoin. When that time comes, only the most premium, certified, reliable gold will be valid for such global finance – and $XNK offers everyone, from countries to individual citizens, exactly that.