The ultimate goal
If you have browsed the website up until this point you may be a little confused. I started off saying the goal of Kinesis is to bring back a sound monetary system, yet to date have shown how it can be used by distinct groups – individuals, businesses, precious metal and crypto investors and traders.
However to see what Kinesis could ultimately achieve we must look to what I think is it’s crown jewel project – Indonesia.
The Indonesia project
Kinesis has made the soft launches of it’s Indonesian PosPay Gold, JFX GOLD X, and MetalGo projects. In partnership with the government run postal service PT POS, PosPay Gold is a feature of the PosPay app allowing for payments, savings and financing in KAU.
JFX GOLD X is a desktop application for the Jakata Futures Exchange (JFX) that will allow the institutional members of the JFX and their millions of clients to trade spot physical gold in the form of KAU via the Kinesis Monetary System. MetalGo is an application that allows individuals to invest in and trade gold.
With approval now received from the national regulator, PosPay Gold has launched to staff and families of some of the 70,000 strong postal service. A public launch will begin later in 2023 or early 2024 making the platform instantly available to the 1 million plus existing PosPay accounts and the entire Indonesian population. A cross border remittance solution is expected to be rolled out as well.
Beyond this, the Shariah-compliant gold savings application NUGold will become available to the 100 million plus members of Nahdlatul Ulama (NU), while the stand alone MetalGO app is live as of October 2022.
More information can be found in Kinesis’ recently updated Indonesia Case Study.
Indonesia is the perfect place to test the scalability of Kinesis as a monetary system for a number of unique reasons:
Massive unbanked or underbanked population – despite being the 4th most populous country in the world with some 270+ million people, approximately 80% have little if any access to banking. This makes it hard to receive, spend and save. Distance from financial institutions and cost of opening and maintaining bank accounts are cited as main reasons for this. As a mobile app, PosPay Gold is instantly accessible and has no fees for opening or maintaining an account and comes with access to an online bank account application.
Widespread access to smartphones and internet – over 70%+ of the population have an active smartphone meaning a majority of the population will be able to access and utilise the app.
Predominately Muslim population – with more the 85% of the population being Muslim PosPay Gold offers a debt and interest free way to save. Under Islamic law charging or paying interest is not allowed. Kinesis’ fee sharing rather than debt yield is an ideal alternative to allow saving.
Large migrant workforce – more than 6 million local migrant workers remit more than $1.5 billion per month back to Indonesia. At present typical options to remit money such as Western Union and Money Gram charge 5%+ in fees compared to Kinesis’ flat 0.45%. This makes Kinesis the logical option and will save locals hundreds of millions in fees annually.
Economic size – In addition to a large population, Indonesia is one of the wealthiest countries in Asia. It is also one of the largest economies in the world. With a GDP of over $1 trillion annually, being successful in Indonesia will mean proof of concept as Kinesis as a monetary system and a profitable business model to fund aggressive expansion.
Government backing – payment and savings will be integrated into the PT Pos (Indonesian government postal service) system. This will allow access to those who do not have internet or a smartphone via the 24,000 postal service points and payment of the 70,000 postal employees in KAU. The government will also be entitled to a share of every app users transaction fees via yields incentivising it to promote mass adoption. In fact an official launch by the Indonesian President is set for August 2023.
Acceptance as payment – as PosPay Gold is included in the PosPay app it is already integrated with numerous local banks and e-wallet and service providers such that more than 80% of merchants in Indonesia accept payment from at least one of these services.
More information can be found in Kinesis’ recently updated Indonesia Country Profile.
As you can see from the above, it is clear that the Indonesian project has obvious and, perhaps more importantly for adoption, significant financial benefits for all parties involved. For this reason I personally cannot see it being anything other than a success.
The official launches in Indonesia are underway and with the government’s desire to launch PosPay Gold countrywide significant uptake could occur in a very short period of time.
Beyond the initial countrywide launch, Kinesis is already in discussions to extend the use case of it’s system including:
- Migrant worker remittance facilities
- Pawning and financing of KAU gold holdings
- Government employee pension fund holdings of KAU
- Extending integration into other areas of the economy including healthcare, insurance and utilities
Outside of the Indonesian project Kinesis has also been busy and we can expect to see rapid developments in a number of key areas.
- Debit cards – roll out of the virtual debit to more regions (62 countries covered at the time of writing) and then issuance of region specific physical cards for the US, UK and Europe
- Yields – completion of yield payments in the form of KVT yields. This is now live and all yields are being paid out monthly
- Onboarding – easy onboarding for Europe (SEPA) and UK (Faster Payments) accounts as well as other region specific deposit solutions
- Partnerships – we can expect to see new regional partnerships, particularly in areas of the world Kinesis will look to target. We have recently seen this through the partnering with Atlas Vault and Atlas Brokers based in Panama.
- Addition of more crypto pairs – Kinesis’ latest additions include Stellar (XLM), XDC and USD Coin (USDC). Various cryptos have been added consistently and we can expect this to continue
- Kinesis Pay payment method – a plug in for existing businesses allowing customers to pay instantly in KAU and KAG. This too is now live
- US cashback program – allowing US customers to save 3% on in app KAU and KAG purchases made at major retailers, more than negating fees on purchase. This is now live!
- Kinesis Pro – an advanced, high speed, high liquidity crypto trading platform expected in Q3 2023. Set to bring volume to the kinesis exchange and additional users in the form of crypto enthusiasts
- Listings on CoinGecko and CoinMarketCap – these have now been completed
Perhaps even more exciting will be to see where Kinesis targets it’s monetary system next. In the past they have discussed Africa and Latin America as many economies in these parts of the world face similar issues to Indonesia. In addition these regions are prone to hyperinflation. The rapid devaluation of local currencies is in stark contrast to a gold backed currency as gold has traditionally been a store of value and a hedge against inflation.
My best guess will be a similar project to Indonesia in a country in Latin America. The recent partnership with Atlas and the release of a Spanish version of the full Kinesis Money website bodes well for this. With El Salvador introducing Bitcoin as legal tender, we can see a clear intent for governments to look at digital assets as solution for the shortcomings of fiat currencies. Success in Indonesia will prove scalability, and the knowledge gained in the process will make implementing a similar system in another country much more efficient.
In it’s Q4 2022 update, Kinesis confirmed it has secured another government project set to be announced shortly. The project looks set to see Kinesis partner with a Latin American government to introduce a gold backed currency that will will be accepted as legal tender. From hints given to date, the most likely candidate is Panama.
It’s free to sign up to the Kinesis platform and see exactly how it works. You can use my referral link to get started.