According to a reputable news source (well, the Daily Mail) the Royal Mint is casting (sic) around to find things to do when the Treasury caves to the inevitable and tells them to quit wasting everyone’s time and money by minting coins. They’ve come up with the idea of making a credit card out of real gold. They are apparently working on ways to get 18-carat gold cards to work in ATMs and, of course, at contactless terminals.
The cards will have the owners signature engraved on the back (I’ve no idea why, since the card schemes are discontinuing the use of the pointless signature panels on cards) and will apparently be worth $3,000 each which (as a number of Twitterwags immediately pointed out) will greatly increase the number of fake ATMs in the streets around Belgravia after midnight.
This isn’t the Royal Mint’s idea, of course. They stole it wholesale from 30 Rock a few years ago.
There’s another kind of gold card that is worth considering: not one that is made of gold, but one that is backed by gold. I wrote about this idea more than a decade ago, using the example of an Islamic electronic gold card, saying…
“Given the desire to transact with the convenience of a card but in a non-interest bearing currency, it would seem to be a straightforward proposition to offer a gold card that is actually denominated in gold. An Islamic person tenders their chip & PIN gold card in Oxford Street to buy a pair of shoes: to the system it’s just another foreign currency transaction that is translated into grams of gold on the statement. If, at the end of the month, the person has used more gold than they have in their account then they can use some of the bank’s gold for a time at a fee. Hey presto, no interest. And if said Islamic person wants their gold then they can, in principle, go to the relevant depository and draw it out (minus a handling fee, naturally). Would interested credit card issuers form an orderly queue, please?”
Nowadays you’d implement the gold card as a cryptoasset that is institutionally linked to gold in a depository I suppose, but the idea of a turning store-of-value gold into means-of-exchange e-gold remains interesting: there are a great many people around the world who would prefer to pay and save in gold rather than any more modern medium. As it happens, the Royal Mint were go to have a go at this too with their RMG blockchain-based crypto asset until the spoilsports at the Treasury told them to knock it off and get back to making commemorative Brexit 50p coins.
So gold cards, or cards backed by gold or cards backed by assets backed by gold? My bet is that in the long run regulated token markets will win out but I’m genuinely curious as to your opinions on this.
[updated 29th October 2018 to include the government tell Royal Mint to stop crypto asset development.]