- Through its app, Troygold allows owners of Krugerrands to access cash instantly, using their coins as security without relinquishing ownership.
- Users have access to up to 75% of the gold value as a loan.
- The loan is an interest-only loan, which essentially means users repay 1.25% interest on the loan.
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In a matter of seconds, fintech platform Troygold allows owners of Krugerrands, and other forms of bullion, to convert them into cash that they can spend anywhere in the world, without having to sell their assets.
The Cape Town-based fintech, which began operating in 2019, was launched by brothers Bastiat and Dane Vijoen's and inspired by their ambitions to make gold liquid and function like money in today's modern financial system, Bastiat told Business Insider South Africa.
"There's still about R300 billion worth of Krugerrands sitting in the drawers and safes of average South Africans; that is very illiquid capital, it's unsafe, but most importantly it's lying in the dark, completely disconnected from the modern financial system," Bastiat said.
"We want to take that idle capital in the form of gold and really make it money again and activate it," he said.
The platform allows Krugerrand holders to store their coins on the Troygold app by delivering them at a Scoin store, South Africa's largest distributor of gold coins. The value of the coins then gets stored on its in-app wallet, linked to a Troygold Mastercard that is tied to an account from the company's sponsoring bank, Access Bank.
"We then also send you a Troygold Mastercard. Our Mastercard is sponsored by Access Bank, so behind your Troygold wallet, you actually have a fully-fledged bank account, and it is what powers our Mastercard," he said.
Once loaded on the app, users have access to up to 75% of their gold's value in the form of a loan.
"If you've got gold in your app, effectively you instantly have 75% of the value of that gold available in your currency wallet, so you can effectively take your Troygold Mastercard and instantly spend the value of that gold anywhere in the world," he said.
While the Troygold account charges no monthly account fees, it has standard transactional fees, and its loan interest rate is set at 1.25%. Bastiat said the company is in talks to get the interest rate even lower to be more competitive.
Users who want to sell the Kruggerands and aren't interested in taking out the loan can do so.
"Say… you do want to sell your gold, you don't want to make use of the loan facility, then you sell your gold and then immediately, a second later, those funds are deposited in a currency wallet, and you can spend the proceeds of [the sale of] your gold anywhere in the world," he said.
Troygold, which is also financially backed by another local fintech, Crossfin Ventures, is currently only available in South Africa, but the company plans to spread its operations internationally.